The day before he was sworn in, New York Governor Kathy Hochul signed an unusual opt-out policy that prohibited him from using his position to assist Delaware North, a global giant in entertainment and hospitality services.
The private company – which owns or manages 11 gaming venues and numerous hotels, and handles concessions at many stadiums, airports and parks – employs Ms. Hochul, William Hochul, as senior vice president and top attorney.
But the refusal of Ms. Hochul, and the even broader addendum he signed two months later, did not stop the governor from taking actions that could benefit Delaware North or hurt its competitors, especially near Buffalo, the governor's hometown.
There is no evidence that Ms. Hochul has used his influence to help Delaware North. But in three recent cases involving gambling or concessions, the state took action in the interests of the husband's company.
Seven months after Ms. Hochul becomes governor, he says it's time for the state to do it playing “hardball” with the Seneca Nation of Indians, Delaware North's largest competitor in the Buffalo gambling market. Country froze the Senecas bank account to force the tribe to surrender $564 million in gambling revenue — money that has been in dispute for four years.
He then directed $418 million of that money toward new home financing for the Buffalo Bills. The move raises questions about whether governors should subsidize football stadiums for the team's billionaire owners, especially since the bill has more than three decades of ties to Delaware North, as their concessionaire. (The team has since announced it has selected Legends Hospitality to run its concession starting in 2026.)
Then last month, Ms. Hochul agreed to an 11 hour stipulation for a state budget deal that called for a restructuring of the quasi-governmental board that oversees the lucrative Batavia Downs Gaming & Hotel in western New York, another direct competitor of Delaware North. The restructuring could make it easier for Delaware North to try to acquire Batavia Downs, which sits between Delaware North's two gambling facilities.
Now, as the 2023 legislative session is due to conclude next month, Ms. Hochul will be watched again.
At issue is the renewal of the Seneca Nation game compact, with billions of dollars at stake. Senecas and state officials must cut state gambling revenue at three Nation casinos, and designate areas in western New York where Senecas have exclusive casino rights – a decision that will affect Delaware North's share of the gambling market in those areas.
The governor said he's resigned from the matter, as is his husband, whose $650,000 compensation last year helped push Hochul's combined income to just under $1 million. Mr. Hochul has entered into his own disclaimer policy with Delaware North on matters relating to the company's New York operations.
“Governor Hochul has taken unprecedented steps to restore confidence in government, including releasing his denial policy, and seeking to avoid the appearance of conflict while carrying out the duties New Yorkers have chosen for him to do,” said Hazel Crampton-Hays, spokesperson for Talk to Hochul.
The dispute over the casino Seneca ran highlighted how difficult it was for Ms. Hochul to create an inviolable dividing wall between his duties as governor and the interests of Delaware North as it relates to the regulation or management of the state.
Delaware North was founded over a century ago in Buffalo, starting as a bean stand run by LM Jacobs and his brothers, and eventually growing into stadiums and horse and dog trails across the country.
The growth of the family company was accompanied by some controversy. In 1972, a Los Angeles federal court convicted the company, then known as Emprise, on felony charges of conspiring with well-known Mafia figures to hide their holdings in a Las Vegas hotel and casino. The founder's children, reeling from the stigma of the Emprise's reported association with organized crime, eventually reorganized their holdings under the name Delaware North, originating from its location at the time on Delaware Avenue and North Street in downtown Buffalo.
The company, which reported $4 billion in revenue last year, describes its New York operations as a relatively small part of a large corporate empire. Even so, it operates more than 2,000 state-regulated slot machines (technically known as video lottery terminals) in western New York; running concessions at Buffalo and Syracuse airports; and operates the hotel and spa for Saratoga State Park and various visitor services at Niagara Falls State Park.
It also has about 20 liquor licenses in various establishments and through the Patina Restaurant Group, which operates many New York establishments, including two in Manhattan's Lincoln Center.
The company regularly spends $275,000 a year on lobbyists to try to influence state officials to ensure that its interests in New York are protected.
Under the governor's refusal memorandum, Delaware North cannot donate to Ms. Hochul and must have executive clearance from the company to lobby the executive suite, which has happened at least once since Ms. Hochul served. They have also sent lobbyists to other top administration officials, including Robert Williams, executive director of the State Gambling Commission and a member of the state team that negotiated the Seneca agreement, according to state records and interviews.
A little over a year ago, the Delaware North lobby went into overdrive. When the representative pressured Mr. With Williams on the Seneca compact, the company also lobbied on behalf of so-called racinos – racetracks equipped with video lottery terminals – in Western New York and “additional casino licenses”, according to a state lobbying disclosure. The company has also repeatedly lobbied executives in the Budget Division of Ms. Strong Hochul, regarding the Seneca deal and other matters, according to the records.
Senecas had noticed Delaware North's apparent influence with the state, and pushed lawmakers to approve it new bill that would allow them to sue the state if negotiations on their agreement fail, or if they believe the state is not negotiating in good faith. The state is currently protected from such lawsuits under the principle of sovereign immunity.
“They are our direct competitors,” said Rickey L. Armstrong Sr., president of Seneca, in an interview, referring to Delaware North. “They seek control over what we do and don't do.”
He added that the ability to sue over bad faith negotiations, enjoyed by California's proper tribes and considered in federal law, “will give us a tool to address that issue.” The Nation also employs its own lobbying team; last year, the tribe spent more than $300,000 on lobbying efforts in New York, according to state records.
Outside Senecas, that is moved recently by the state to dissolve the quasi-governmental council that oversees Batavia Downs—a harness lane that now houses a racino and hotel—also pushed oversight of Delaware North's ties to the Hochul family.
The hastily approved act, which, like the stadium deal, never received a public hearing, reorganized the leadership of OTB West Regional, the public interest corporation that controls Batavia and is overseen by West New York's 15 counties and the cities of Buffalo and Rochester.
According to State Senator Tim Kennedy, the Buffalo Democrat pushing for reform, Ms. Hochul personally signed the measure to include a reshuffle in the state budget.
He told the senator “he recognizes that changes need to be made and will support the legislation in the budget, and he – at his word,” Mr. Kennedy.
Both Mr.'s office Kennedy and Ms. Hochul says there are good reasons to support the change—namely an active investigation into the potential financial abuse and corruption under existing boards. According to news reports and government auditorspart-time board members take advantage of it expensive health insurance without clear permission, and some of their family members got it free ticket to sporting events, including Buffalo Bills games.
Under the old structure, Republican-run counties dominated the council. The changes ensured that Democrats in the Rochester and Buffalo counties would command about two-thirds of the vote.
Mr. Kennedy and the governor's office say the move has nothing to do with Delaware North, but Henry Wojtaszek, current president of OTB Western Regional, believes otherwise.
“I believe it is a power play for the Democrats to take over the board of directors with the goal of changing the management structure at Western OTB — and replacing it with Delaware North,” said Mr. Wojtaszek. “They benefited the most from the change in management.”
Mr Wojtaszek, a Republican, said Ms Hochul should have resigned from the West Regional OTB issue because the company was in competition with her husband's employer.
In fact, a decade ago, Delaware North attempted to buy or manage OTB West Regional, records show.
In September 2012, Rajat Shah, vice president of Delaware North, emailed Mr. Wojtaszek to explore various “acquisition scenarios”, including a “100 percent equity buy”. Mr Shah did not respond to emails and voicemails.
Mr. Kennedy said critics of OTB West's changes, including Mr. Wojtaszek, who had to refund $3,500 to the company after an internal audit found he failed to provide reimbursement for the personal use of his company's cars, “grabbed at straws. ”
Delaware North said it is no longer interested in acquiring Western OTB.
“The historic interest in doing so does not necessarily reflect our current interest,” said company spokesman Glen White.
Experts contacted by The Times could find no precedent for such a massive rejection by a New York governor. Years ago, criticism accused former Republican Governor George E. Pataki, whose wife consulted for clients related to her husband's friends and donors, did nothing to address the perceived conflict from her partner's job.
Blair Horner, director of the New York Public Interest Research Group, said questions would continue to be raised about Ms. Hochul because there is no disinterested third party responsible for enforcing it. Although the original agreement was supposed to be approved by the country's ethics board, Ms Hochul's aides could find no record of the office requesting or accepting it.
University of Washington law professor and ethics expert Kathleen Clark, who reviews refusal agreements for The Times, credits the detailed procedures put in place to identify conflicts and Delaware North's separate agreement to prevent Mr. Hochul quit the company's New York operations.
But one area of concern cited by Professor Clark and other ethicists is how the refusal policy empowers the governor's chief advisor, Liz Fine, to help determine when Ms. Hochul had to resign. In that situation, Ms. Fine would then step in and act on the governor's behalf—an arrangement the professor characterized as a “significant weak link” because the governor could so easily sway Ms. Fine if he wants.
“Too much is at stake to leave for effective informal agreements with subordinates,” said Mr. horner.