The New York State Constitution bans casino gambling, but New York has: Casinos in new york state.
Lotteries, including Lotto, Lotteries, Daily Numbers, Keno and Scratch Off Tickets
Parimutuel Betting on Horse Racing
Native American Casinos
Racino’s, with casino-style slot machines and video table games that the state deems “Video Lottery Terminals”
All of these are legal through a combination of constitutional exceptions, federal policy on Native American lands and agreements negotiated solely between the Governor and tribal leaders.
As a result, our Constitutional "ban" is not really a ban at all, but merely a roadblock to having casino gambling in New York under a unified regulatory structure that ensures that New York's taxpayers are the prime beneficiaries of casino gambling in our state.
The State Contstitution could be ammended to allow for full casino gambling under state and local control.
The constitution is supposed to be the legal foundation of our state, but on casino gambling, multiple amendments and federal preemptions have all but eviscerated the original intent of the constitutional ban on gambling.
But with our state facing an ongoing budget crisis, a severe lack of jobs in many of its regions, and the need for an enhanced base for tourism from which to draw customers, it may be time to reconsider the ban overall. Could a streamlined and modernized constitutional policy keep more dollars in state, create jobs and generate much needed revenues for our schools, hospitals and other core services?
The increased state funds from gambling could allow us to again be a progressive leader on the issues that matter most to New Yorkers, including education, healthcare and environmental protection. Casino gambling could also be a shot in the arm to get our economy moving again.
In 2010, New York State’s total revenues from gaming were $2.7 billion, most of it from the lottery ($2.2 billion). Revenue estimates based upon permitting current Video Lottery Terminal locations to offer table games, or on allowing new commercial casinos altogether, range from hundreds of millions to over a billion dollars a year. In addition, increased business at state-licensed casinos could be a boon to local economies, including the Catskills and Upstate New York, where jobs and new investment continue to be scarce.
The New York State Constitution’s general prohibition against gambling provides that there be “no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling” in the state. The constitution also includes a series of exceptions to this ban to allow lotteries and horse racing, and in recent years federal preemption has allowed the development of Native American-owned casino's. This, plus the recent opening of multiple racino's which feature slot machines and video table games, has created a gambling industry the falls under multiple regulatory structures at different levels of government.
How did we get to this point in the state’s fundamental legal framework for gambling, and what is its practical effect?
Origins of Gambling Prohibitions and Constitutional Exceptions:
Constitutional gambling prohibitions in New York were established and strengthened over the course of the 19
century, and then attenuated during the 20
In early New York, lotteries were used to finance public works, private business initiatives and even church construction and repair.  Statutory prohibitions were enacted for private lotteries, not those run by the government. A general prohibition against lotteries dates to New York’s second constitution, adopted in 1821. The arguments made were familiar. Opponents said that gambling was immoral and socially pernicious. They sought a constitutional provision because they did not trust the legislature to resist the future influence of gambling proponents. Advocates stressed the value of lotteries as a relatively “painless” revenue source. They argued further that a prohibition, though denying the state resources, would be ineffective in advancing its social objectives because gambling opportunities offered by other states would still be available to New Yorkers. And there was a view expressed, too, that the regulation of gambling was a legislative matter, not a constitutional one.
The constitutional exception included in the 1821 prohibition for “lotteries previously provided for by law” was removed in 1848. The 1867 convention (the work of which failed of adoption at the polls) continued the lottery ban. The gambling prohibition was extended in the constitution adopted in 1894 to include “pool-selling,…[and]… book-making” and, most significantly, generalized to “ any other kind of gambling.”  This was explicitly targeted to ban race track betting. An accompanying directive required that the legislature “pass appropriate laws to prevent offenses against any of the provisions of this section.” 
Both before and after the adoption of the 1894 constitutional prohibition on gambling, horse racing interests battled in the legislature and the courts – mostly successfully -- to carve out an exception for themselves.  The constitutional directive to the legislature to affect the constitutional anti-gambling provision -- that made the provision non-self executing -- was employed by horse racing proponents and their legislative allies to undermine its intent. 
In reaction, there were attempts at the 1915 constitutional convention by those in the state who opposed all gambling to strengthen the restriction by altering the language of the constitution. Though the 1915 constitution failed of ratification, the fact that advocates for strengthening the gambling restriction had little influence at the convention was a demonstration that the power of anti-gambling forces in the state was greatly diminished.
The capacity of anti-gambling interests to defend the general prohibition continued to diminish over the course of the 20
Directions to the nearest casino
century, giving way on four occasions to explicit constitutional recognition of arguments that gambling was a way to generate needed revenue for state government or for other organizations regarded as worthy.
After several earlier efforts failed, a constitutional amendment to permit pari-mutuel betting on horse races was adopted in 1939.
An exception authorizing certain religious and not-for-profit organizations to conduct bingo games passed in 1957.
An amendment to allow state lotteries in support of education was adopted by the voters in 1966 -- just under a century and a half after passage of the first general state constitutional prohibition of lotteries. 
A constitutional exception for games of chance to benefit religious, charitable and certain other non-profit organizations – recognizing what had become widespread practice - was approved by the voters in 1975, but only by a margin of only 5,274 of 2,981,160 votes cast. (Interestingly, religious interests had earlier been at the core of anti-gambling sentiment in New York.) However, an attempt in 1984 to remove prize limits for these games from the constitution and leave their levels to legislative determination failed. 
The state lottery has developed far beyond its original form and scope. According to a 2004 summary prepared by Frank Padavan, one of the leading opponents of the extension of gambling when he served in the New York State Senate:
In 1967, the New York State lottery was limited to a monthly drawing with a top prize of $100,000. The lottery was expanded in 1976 to include an instant lottery; Lotto was introduced in 1978; the daily "numbers" game and Win-4" were introduced in 1980 and 1981, respectively; "Pick 10" began in 1988; Take-5"was added in 1992; and Quick Draw was authorized in 1995. Quick Draw began as a game played every five minutes; currently, the game is played every four minutes. The New York State lottery is the largest lottery system in North America. The sale of instant scratch-off tickets alone means that New Yorker's have the opportunity to gamble twenty-four hours a day, seven days a week, 365 days a year. 
Extension of pari-mutuel betting: Statutory authorization of off track betting on horse racing in New York City was passed in the legislature in 1970 after decades of advocacy by city leaders. Change was resisted by track owners, who believed (correctly, as it proved) that it would seriously diminish their business. The 1970 legislation also permitted OTBs in other areas of New York. Outside of New York City, only the City of Schenectady moved ahead with a local OTB.
This blow to the long-established efforts to confine wagering to tracks alone survived a state constitutional challenge by track owners in 1972, as had other earlier challenges to legislative initiatives to bypass constitutional gambling limits.  Six other regional OTB agencies were authorized, and five established in New York in the following year. (The earlier initiated Schenectady OTB became the Capital District OTB. A Central Region OTB was never established.) An experiment with video simulcasting of horse races, began in New York in 1981, soon became fully authorized. With the internet, live streaming followed. Currently, telephone and internet betting accounts are available in the state. After several losing years, the off track betting agency in New York City was closed in 2010; the five other OTB agencies persist in business elsewhere in New York. 
Efforts to remove or alter the state constitution’s gambling limit:
The 1967 state constitutional convention. The convention’s committee on Bill of Rights – which had jurisdiction because anti-gambling provision were (curiously) moved to that location in the document in 1846 “proposed the deletion of the lengthy and contradictory section of the article dealing with divorce, gambling, pari-mutuel betting, bingo games and lotteries….” This recommendation was based upon “…overwhelming agreement that the material as clearly statutory and did not require constitutional attention.” 
However, political considerations interceded. Protestant leaders, some of whom were already disposed against the work of the 1967 convention because of its proposed repeal of the Blaine amendment banning state aid to parochial schools, feared that removal of the constitutional restriction would lead to authorization of unrestricted gambling by a legislature historically susceptible to the influence of pro-gambling interests. In this context, Harold Fisher, an influential Brooklyn Democrat delegate, convinced his colleagues that retaining existing gambling provisions was politically prudent if the constitution they planned to propose in a single question was to succeed at the polls. Fisher prevailed upon the committee to leave existing constitutional provisions concerning gambling in place. It acceded. A following proposal to strengthen restrictions on gambling by making continuation of state run lotteries subject to statewide referendum held every five years failed.  So New York’s constitutional provisions concerning gambling would have remained the same even if the proposed 1967 constitution was adopted. Of course, it was not.
The Constitutional Revision Commission created in 1993 to prepare for a potential convention call in 1997, paid no attention in its research to the gambling issue. A convention was not convened.
Abortive attempts at amendment through the legislature: In 1972 the Senate and Assembly, both in Republican hands, gave first passage to a constitutional amendment that left the prohibition in place, but devitalized it entirely by giving the legislature broad authority to legalize any form of gambling, at its discretion.  However, this measure failed to achieve second passage in the following session. In 1977 the Democratic Assembly passed a more limited amendment authorizing gambling in specified resort areas, with local approval, but this failed that year to garner support in the Republican Senate.  (One motivation was the legalization in 1976 of gambling for Atlantic City, in neighboring New Jersey.)
An unexpected consequence of the requirement for second passage of a constitutional amendment before its proposal to the people was that it diminished the pressure for compromise on key issues between the legislative houses and among interested parties before first passage. Rather than reaching agreement, concerning four core sets of issues in a single measure – casino siting, local consent for siting, public or private ownership and operation, and the locus of governmental benefit from resources generated – the legislature gave first passage to three separate amendments concerning gambling in 1978.  But this still required that one of these would gain majority backing in both houses after an intervening election if it was to be offered at the polls; a hybrid could not be constructed, as it would not have received first passage in its final form. In fact, none of the three proposed amendment passed in 1978 received second passage. Instead in 1980 the legislature passed eight separate potential amendments.  Again, second passage of an agreed amendment was not achieved by the newly elected legislature.
The effort to gain an amendment to permit casino gambling was renewed in 1994, now with strongest support in the Republican Senate, but the Assembly failed to reach agreement on this and linked matters in the session’s waning hours.  The next year the legislature did pass an amendment to permit casino gambling in certain cities and counties in New York, and “electronic games of chance and slot machines at selected racetracks” under limited conditions, again justified as a needed revenue source. But second legislative passage after a following election again was not achieved. There was deep division in the ranks of Senate Republicans and considerable influence on New York City Democratic members as a result of energetic opposition by a well-financed multi-faceted opposition coalition that included Donald Trump, acting in defense of his casino investment at Atlantic City, New Jersey. 
From this record, the core issues connected in the past with altering the state’s constitutional gambling prohibition may be deduced:
· Location – Gambling has been most often promoted as a potential economic development engine in the state’s economically rural regions, or as a path to renewal for the already established fiscally distressed racetracks. New York City mayors have said that they will oppose any constitutional change that does not bring direct benefit to the City; the focus upon existing tracks would address this. Other downstate locations – Long Beach on Long Island, for example have also in the past expressed interest
· Ownership – Earlier, a key element of the debate concerned whether gambling facilities should be owned and run by the government or by private business, under governmental regulation. In recent debates, possible because of the development over the last two decades of Native American casinos, this element of the debate has faded.
· Purpose and Limits – Gambling restrictions are grounded in the fundamental belief that this behavior is socially damaging. This has been addressed and overcome by assuring the direction of a substantial share of revenues to public purposes or social ends or organizations deemed worthy and /or by placing limits on the size scope and character of gambling activities.
The incremental development of legal gambling venues through constitutional and statutory change inside the state, and the establishment of a thriving gaming industry in adjacent states, has created an industry with a large stake in protecting its interests as state constitutional change is considered. One primary driver of these developments is the growth of Indian Gaming in accord with the Indian Casino Gaming Regulatory Act. Adopted in the wake of the U.S. Supreme Court decision in California v. Cabazon Band of Mission Indians  this federal law provides a legislative basis for the operation/regulation of Indian gaming, protects gaming as a means of generating revenue for the tribes, encourages economic development of these tribes and protects the enterprises from negative influences (such as organized crime). 
Congressional passage of the Indian Casino Gaming Regulatory Act (IGRA) in 1988 redirected the focus of the casino gambling debate in New York. This statute gave Indian tribes “the exclusive right to regulate gambling activity on Indian lands” in states that did not prohibit gambling so long as federal law was not violated.  However, tribes that sought to establish casinos (categorized as “Class III” gambling) were required to enter into compacts with the state within which the facility was to be located to negotiate the conditions under which they could be operated.
In 2003 the New York State Court of Appeals determined that a compact entered into by Governor Mario Cuomo in 1993 with the St Regis Mohawk tribe, and a subsequent agreement by Governor George Pataki in 1999, both without legislative authorization, permitting the opening of a casino in Franklin County New York violated the separation of powers requirements of the state constitution.  (This decision did not reach alleged violations of the state constitution’s gambling prohibitions.)
Between the time that this agreement was made and the court decision reached, and justified by the urgent need for revenues in the wake of the September 11 attacks on the United States in New York, the legislature authorized the governor to enter into a compact with the Seneca Indians to establish up to three casinos in western New York. The conditions set out in the law would be satisfied, it said, through certification by the governor that they were met. Up to three more casinos in Ulster and Sullivan counties in the Catskill region were also authorized under similar terms, though with unspecified tribal compact partners. Additionally, the law provided for the use of Video Lottery Terminals (VLTs) at a number of racetracks. It also permitted state participation in a multi-jurisdictional lottery. 
Regarding casinos, in Dalton v Pataki the New York State Court of Appeals determined that, notwithstanding the state constitutional prohibition of gambling, “Through IGRA, Congress has preempted the states in this area. Since New York allows some forms of class III gaming--for charitable purposes--such gaming may lawfully be conducted on Indian lands provided it is authorized by a tribal ordinance and is carried out pursuant to a tribal-state compact.”  The court found further that there was no violation of the state constitutional gambling prohibition in authorization of VLTs or the participation in an interstate lottery, as the conditions for constitutionally authorized exceptions were met.
I n September of 2011 one national web-based directory indicated nineteen different active casinos or racinos in New York and one gambling cruise operator based in the state.  Additionally, access to gambling opportunities was available to New Yorkers outside New York and electronically from anywhere in the state. And, of course, illegal gambling persisted. Clearly, the state’s constitutional gambling prohibition was not prohibitory. To be sure, the practical effect of the constitutional provisions was to determine -- if not randomly then without clear, reasoned policy or regulatory criteria -- what sorts of gambling would be permitted in different locations across the state. If justification for gambling prohibitions and limits was to regulate behavior, then this goal was not being achieved. If justification for exceptions was to provide resources to meet essential governmental needs, then this has not been maximized.
New York State Constitutional Gambling Limitations I. 1821 Constitution.
Article VII. § 11. “[Lotteries prohibited.]—No lottery shall hereafter be authorized in this state; and the legislature shall pass laws to prevent the sale of all lottery tickets within this state, except in lotteries already provided for by law.”
II. 1846 Constitution - Moved to Article I (Bill of Rights) and conflated with right to assembly and provision re: divorce:
Article I. § 10. [Right to assemble and petition; divorces; lotteries prohibited.]—No law shall be passed abridging the right of the people peaceably to assemble, and to petition the government, or any department thereof; nor shall any divorce be granted otherwise than by due judicial proceedings; nor shall any lottery hereafter be authorized, or any sale of lottery tickets allowed within this state.
III. Extended and detailed further in Constitution of 1894
Article I. § 9. [Right to assemble and petition; divorces; lotteries, pool-selling and gambling, laws to prevent.]-No law shall be passed abridging the right of the people peaceably to assemble and to petition the government, or any department thereof; nor shall any divorce be granted otherwise than by due judicial proceedings; nor shall any lottery or the sale of lottery tickets, pool-selling, book making, or any other kind of gambling hereafter be authorized or allowed within this State; and the Legislature shall pass appropriate laws to prevent offenses against any of the provisions of this section.
Debate 1894. 111:47-52. Gambling, IV:971-979 (VI:2517-2522); IV:1079-1088 (V1: 2581-2585); IV:1110-1131 (VI:2599-2610).
1895 Penal code amended to make bookmaking or pool selling a felony, except where “exclusive penalties were provided.” Shortly following such penalties were passed in the Percy-Gray Racing Law [BL1] constituted of “forfeiture of the amount wagered to be recovered in a civil action” unless a written token of the bet were admitted in evidence.”  Betting at horse races popular. Opposed throughout the state in huge campaign among reform organizations and churches. Both a moral and a constitutional question. James R. Keene, attorney for August Belmont: ‘ [BL2] while racing enthusiasts were concerned with improving the breed of horses, his opponents were seeking to improve the breed of men.” (p. 195) “Only God Almighty can do that.” (P. 195) Agnew-Hart Bill to effect ban on betting at horse racing defeated in the Senate 25/25 with Lt. Gov. unable to vote on substance. Passed on second effort in 1908.
In force in 1915: Same as 1894
For court decisions construing this section, see Lincoln. IV:144-147.
Note For historical sketch of the constitutional and statutory provisions in this colony and state relating to gambling cited in annotated 1915 constitution (with special reference to lotteries) from 1721 to 1894, together with historical comments on other aspects of this subject, see Lincoln III:33-52.
The adoption of this provision followed the extensive use of public and private lotteries to finance public works and other projects.
References to constitutional conventions. 1821. 1:217, 750. Debates of constitutional convention 1821. lotteries prohibited, 461 (Oct. 17), 566-572 (Oct. 30).
. Article I. §9. 1. “…except as hereinafter provided, no lottery or the sale of lottery tickets, pool-selling, book-making, or any other kind of gambling, except lotteries operated by the state and the sale of lottery tickets in connection therewith as may be authorized and prescribed by the legislature, the net proceeds of which shall be applied exclusively to or in aid or support of education in this state as the legislature may prescribe, and except pari-mutual betting on horse races as may be prescribed by the legislature and from which the state shall derive a reasonable revenue for the support of government, shall hereafter be authorized or allowed within this state; and the legislature shall pass appropriate laws to prevent offenses against any of the provisions of this section.
9. 2. Notwithstanding the foregoing provisions of this section, any city, town or village within the state may by an approving vote of the majority of the qualified electors in such municipality voting on a proposition therefor submitted at a general or special election authorize, subject to state legislative supervision and control, the conduct of one or both of the following categories of games of chance commonly known as: (a) bingo or lotto, in which prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers or symbols selected at random; (b) games in which prizes are awarded on the basis of a winning number or numbers, color or colors, or symbol or symbols determined by chance from among those previously selected or played, whether determined as the result of the spinning of a wheel, a drawing or otherwise by chance. If authorized, such games shall be subject to the following restrictions, among others which may be prescribed by the legislature: (1) only bona fide religious, charitable or non-profit organizations of veterans, volunteer firefighter and similar non-profit organizations shall be permitted to conduct such games; (2) the entire net proceeds of any game shall be exclusively devoted to the lawful purposes of such organizations; (3) no person except a bona fide member of any such organization shall participate in the management or operation of such game; and (4) no person shall receive any remuneration for participating in the management or operation of any such game. Unless otherwise provided by law, no single prize shall exceed two hundred fifty dollars, nor shall any series of prizes on one occasion aggregate more than one thousand dollars. The legislature shall pass appropriate laws to effectuate the purposes of this subdivision, ensure that such games are rigidly regulated to prevent commercialized gambling, prevent participation by criminal and other undesirable elements and the diversion of funds from the purposes authorized hereunder and establish a method by which a municipality which has authorized such games may rescind or revoke such authorization. Unless permitted by the legislature, no municipality shall have the power to pass local laws or ordinances relating to such games. Nothing in this section shall prevent the legislature from passing laws more restrictive than any of the provisions of this section. (Amendment approved by vote of the people November 7, 1939; further amended by vote of the people November 5, 1957; November 8, 1966; November 4, 1975; November 6, 1984; November 6, 2001.)
 This summary relies upon New York State Constitutional Convention Committee. Problems Relating to Legislative Organization and Powers (Albany: J.B. Lyon Co., 1938) Chapter XV.
Online poker rooms
 New York State Constitutional Convention Committee.(1938) p.421
 New York State Constitutional Convention Committee.(1938) p.421
. See for example the Ives Pool Law of 1887. For a discussion of the attempts to ban or limit betting on horse racing see Bennett Liebman “Horseracing in New York in the Progressive Era” Gaming Law Review and Economics. (December 2008) Vol. 12, No. 6. See also Robert F. Wesser. Charles Evans Hughes: Politics and Reform in New York, 1905-1910 (Ithaca: Cornell University press, 1967) p. 189 ff.
. Peter Galie. Ordered Liberty: A Constitutional History of New York. (New York: Fordham University Press, 1996) p. 162
. In 1984 Governor Mario Cuomo made an abortive attempt to advance sports betting with funds dedicated to broadly defined educational purposes (libraries, a teacher corps) in New York under the aegis of this lottery provision. Edward A. Gargan. “Cuomo Figures Odds on Sports Betting” The New York Times January 15, 1994, p. E9. The office of Attorney General Robert Abrams argued, however, that such an initiative would require a constitutional amendment. Edward A. Gargan. “Abrams Aide Casts Doubt on Betting Plan” The New York Times January 17, 1984, p. B5. See also Edward A. Gargan. “Cuomo To Propose Legalized Betting On Sports Events: Funds To Aid Education State Lottery Would Supervise -- Revenues Of $100 Million Annually Are Expected” The New York Times Jan. 9, 1984 p. 1. and Edward A. Gargan, Cuomo's Betting Plan Is Illegal, Abrams Says The New York Times Jan 27, 1984, p. B 8.
. “Changes in Terms of Office and Gambling on Ballot” The New York Times October 28, 1984 p. 57.
. Finger Lakes Racing Association, Inc. v. New York State Off-Track Pari-Mutual Betting Commission, et. al. 30 N.Y.2d 207 (1972)
. Henrik N. Dullea. Charter Revision in the Empire State: The Politics of New York’s 1967 Constitutional Convention (Albany: Rockefeller Institute Press, 1997) p. 263.
 For text of proposed amendments see Senate 10465-A, 10467-A and Assembly 9306 (1978).
 For text of proposed amendments see Assembly 12206- A, 12207-A, 12208-A, 12209, 12210, 12210 and Senate 10227 and 10189 (1980)
. James Dao. “Cuomo, Facing Election Year, Seems to Have Little Left to Show on Crime Plan The New York Times July 4, 1994, p. 1 ff.
. James Dao. “New York Senate Roundly Rejects Casino Gambling” The New York Times January 29, 1997, p. 1.; James Dao. “The Bill That Fell From Grace: Casino Measure Seemed a Winner, Till an Alliance Dug In,” The New York Times Feb 3, 1997, p. B1. For further background see New York State Task Force on Casino Gambling. Report to the Governor. August 30, 1996, p. 3.
. Saratoga County Chamber of Commerce v Pataki 100 N.Y. 2
 New York Casino Directory. (n.d.). Casino Guide 2. Retrieved September 20, 2011, from http://newyorkcasinodirectory.com/ (Of these, five were class III Indian casinos and nine were racinos. Numerous off track betting facilities are not included in this count.)
. Robert F. Wesser. Charles Evans Hughes: Politics and Reform in New York, 1905-1910 (Ithaca: Cornell University press, 1967) p. 189 ff.
[BL1] Probably need citation to the legislation.
[BL2] I doubt that Keene was an attorney. He was a financier/ stock market speculator.