Fees rise with proximity to New York City
Gaming regulators in New York State say developers proposing casinos in Orange and Duchess counties must be willing to invest more than $350 million in their projects. But those who choose to develop in the Southern Tier near Pennsylvania may be able to invest as little as $70 million.
Up to seven casinos will be built in three regions upstate: the Catskills; the Albany-Saratoga or Capitol Region; and the Southern Tier. The Catskills are expected to get two licenses.
These minimum investments do not include costs for land acquisition, financing and licensing fees, the New York Times reported. The state’s Gaming Facility Location Board estimates the total investment for an Orange County casino will exceed $472 million.
The higher minimums reflect proximity to New York City. Orange and Duchess counties are closer to the Big Apple than other upstate areas seeking licensure, and would be likely to draw from the region’s massive, concentrated customer base. Currently there are at least five proposals for Orange County, including one 41 miles away from Manhattan in Tuxedo, according to the Elmira Star-Gazette.
The calculations also would change according to which proposal is licensed, reports the Star-Gazette. If Duchess or Orange counties gets a casino, a second one in the Catskills would require a minimum investment of $100 million. If Orange or Duchess doesn’t get one, the minimum investment for the rest of the region would be $130 million.
The minimum investment would be $135 million for a casino in the Albany area. The investment would be $85 million in Broome, Chemung, Schuyler, Tioga and Tompkins counties. But the investment would $135 million in Wayne and Seneca counties, which are closer to Rochester.
“The board’s observation is that there is a wide range of market comparables for both total investment and required minimum investment in gaming facilities,” the commission’s Facility Location Board said in a statement.
Last month, 22 bidders each submitted $1 million to apply for a potential casino license. Among the newest partnerships is Saratoga Casino and Raceway in New York and Churchill Downs Inc. The racino may have lost its bid to develop a Class III casino in its hometown, but it looks to have come up with an even better solution with this alliance. The partners want to bid for a casino license in the state’s Capital Region.
“Saratoga Casino and Raceway could not be more excited about partnering with Churchill Downs,” said James D. Featherstonhaugh, secretary of Saratoga Casino and Raceway in a statement. “Our organizations both come from a horse racing heritage and have a combined two centuries of proven gaming experience. With this partnership, we look forward to a shared future in creating jobs and growing the Capital Region economy.”
Bill Carstanjen, president and chief operating officer of Churchill Downs Inc., said the parent company of Kentucky’s famed Churchill Downs racetrack is “thrilled to expand our presence in New York State through our partnership with Saratoga Casino and Raceway. Together we’ll deliver a destination resort casino that will create reliable revenues for the entire Capital Region, generate thousands of jobs, and be best positioned to keep New York gaming dollars in New York.”
The partners say their proposed $300 million Casino at East Greenbush will create 1,700 construction jobs; 1,700 “permanent good paying jobs with benefits”; thousands of additional jobs in the community and region; and “strong, long-term opportunities for minority and women owned businesses and veterans.”
Albany lawyer Peter Moschetti, newly appointed by the legislature to serve on the state Gaming Commission, took a surprisingly cautious view of New York’s gaming expansion in a recent hearing before the Senate. “I think certainly there’s a great deal of opportunity for revenue. There’s also many pitfalls that go with that,” Moschetti said. “Certainly, there’s an opportunity for revenue raising and jobs. I don’t know if it’s the panacea that everybody thinks it is.’’
Major contenders for the seven available licenses include Malaysian casino company Genting, which is behind the Tuxedo project; tribal gaming operator Foxwoods, which hopes to build a casino at the old Grossinger’s resort in the Catskills; Penn National Gaming, which has partnered with the Cordish Companies in its proposal to build a casino in Orange County; and Caesars Entertainment, which has proposed a $750 million casino in Woodbury, also in Orange County.
License applications are due by June 30. The operators are expected to be chosen this fall.