New York Bidder Faces Hurdles After Obtaining Initial License

Politicians and gaming operators wrote a letter to the state of New York on January 10 asking for the state to pull the license awarded to the Lago Resort and Casino (l.). They said the area will lose 1,100 jobs while local casinos will lose $133 million in gambling revenue.

Back in 1988, only two states featured casino gaming, and now, in 2015, that number has risen astronomically to 39 states. Casinos have been built at a rapid rate, and some politicians in New York are attempting to cut off at least one more from going up.

A January 10 letter was signed by four state senators, two state assembly members, and the president of Finger Lakes Horsemen’s Benevolent and Protective Association, David Brown, which urged the state to not issue a license to Lago. Lago was awarded a license by the Gaming Commission late in 2014.

The main argument is that a casino in Tyre in Seneca County, would cannibalize an alarming 67 percent of revenue generated by casinos between Oneida County and Buffalo, totaling $133 million of their projected $263 million in gambling revenue. In addition to revenue, some 1,100 casino jobs will be lost at Seneca casinos and Batavia Downs.

The casino will also have advantages others cannot compete with, such as slot machines and table games. “The commission would be creating an unlevel playing field by placing a casino in Tyre,” lawmakers said. Both Democratic and Republican legislators agree the area will also become too saturated if the Lago project is given a green light.

While stopping the Tyre property is looking more grim with each passing day, local officials said the next likely step is for racinos such as Hamburg, Batavia, and Delaware North’s Finger Lakes racetrack to look for reduced tax rates. The tax cuts give them the best chance to compete with the massive casino-resorts once they go up.

Beyond the numbers, some are urging gaming officials to look to into a conflict of interest that exists among all three of the New York winning casino applications. Five of the 16 total applicants, including the three winners, used Taft, Stettinius & Hollister LLP as consultants. Taft merged with law firm Shefsky & Froelich last year, and became the state board’s leading gambling consultant.

In addition, key officials in the Lago project dealt with the Shefsky & Froelich law firm for nearly over a year, according to the project’s conflict of interest document. Although Lago listed this as a conflict of interest on their gaming application, it was ruled by the Gaming Commission that was not a determining factor in the awarding of a license.

There are currently four gambling facilities within 75 miles of the proposed Lago site.