Three New York Casino Licenses Established, Controversy Ensues

The Lago Resort and Casino in Tyre, Montreign in Catskills, and Rivers Casino and Resort at Mohawk Harbor in Schenectady (l.) have been named as the three casinos to be granted licenses from the state board. Local Indian casinos may feel a swift blow to their revenue, and one has responded with an expansion of its own. But the Southern Tier has been left out and officials are not happy.

After months of deliberations, the Gaming Facility Location Review Board in New York announced the three casinos granted licenses, while a fourth may or may not be granted. The three winners are Montreign Resort Casino in the Catskills town of Thompson, in Sullivan County; the Lago Resort and Casino in the Finger Lakes town of Tyre in Seneca County; and Rivers Casino and Resort at Mohawk Harbor in Schenectady. The three casinos are projected to create over 3,200 full time jobs, 5 million in taxes, in addition to 6 million in licensing fees.

Of the three, the largest is the $630 million Montreign Resort and Casino, set to include an 18-story casino and hotel complex, complete with meeting spaces and in indoor water park. The second largest is Lago Resort and Casino, which will end up costing $425 to build. The facility will come equipped with a lavish spa, 207-room hotel, several restaurants, 2,0000 slot machines, and 85 gaming tables. Rounding out the group is the Rivers Casino and Resort at Mohawk Harbor, set to cost $300 million. It is part of a redevelopment of a former riverfront site, which will include a hotel, high-end steakhouse, 1,100 slot machines, and 66 gaming tables.

The board held off on awarding a fourth license, citing the possibility of over-saturation, which may severely cripple existing casinos. One of the largest groups to be impacted by this decision are the state’s racetrack casinos, or “racinos” as they are referred to. Jeff Gural, who operates Vernon Downs racino, says point blank the Lago resort could put him out of business. James Featherstonhaugh, a well-connected lobbyist from Albany, and partner in the Saratoga Casino and Raceway, said this increased competition could very well lead to “significant downsizing” at his facility.

In addition to racinos, Native American casinos will also feel pressure, as the Lago facility will be nestled near the Seneca Nation of Indians’ three casinos in western New York, and may impact their potential plans to move into Monroe County. The Lago Casino and Resort will be roughly 10 miles east of the border of the Senecas’ exclusive gaming rights.

The Oneida Nation, which operates Turning Stone, responded with their newly planned Wizard of Oz themed casino. The Yellow Brick Road Casino will be based in Chittenango, just 14 miles east of Syracuse, which happens to be the birthplace of Oz author, L. Frank Baum.

The Oneida Nation has exclusive rights to gambling activity in a 10-county area, which surrounds their Turning Stone Casino in Verona. Due to a gaming compact with the state from 1993, and a 2013 compact, the Oneidas require no permission from a state or federal level to operate casinos, nor is there any limit to how many they can operate on their land. They will, however, be required to apply for a liquor license. The only caveat is that the Oneidas must give 25 percent of slot revenue to local and state governments, estimated at nearly $50 million annually, which will cement their exclusive 10 county rights for gaming.

The casino will cost roughly $20 million, contain over 67,000 square feet, which will be filled with more than 430 slot machines, a bingo hall, two casual restaurants, and a western bar, which will feature live entertainment from local musicians. Spokesmen from the tribe claim the casino will provide jobs to local construction companies, and employ 250 people once opened.

Just 42 miles west of Syracuse, outside the 10 county jurisdiction, Rochester developer Thomas Wilmot is planning on building the massive $425 million Lago Resort and Casino. Wilmot promises the casino will have 85 table games and 2,000 slot machines. Announcement of the Yellow Brick Road Casino came only four days after Wilmot announced plans for his casino.

Oneida Nation representative and CEO Ray Halbritter claims this had no effect on their decision, and their plan of attack has always been to “make your decisions as if a competing casino was right across the street.” Wilmot will pay $35 million for his license, and also be required to pay an annual tax to New York, which is estimated at $79 million the first year.

Keith Foley, a gaming analyst with Moody’s investment has concerns of his own, and stated, “If you have a limited amount of people and you’re putting in more supply, everybody is going to have to share more,” with regards to the revenue. Saturation is a big concern, and something the Senecas will have to study, as they determine whether or not they can compete in Monroe County. However, Thomas Wilmot Sr., Lago’s director said in a statement, “The competition will push every casino to do a better job for the customers, and that’s good.”

Many were surprised when the New York State Gaming Commission only approved three casino bids after saying four could be approved. This was due to a few reasons, the primary being a fear of market over-saturation. Some feel this was also done to allow the board some time to evaluate the market before determining who exactly should receive the fourth, if it were to be handed out.

Governor Andrew Cuomo is convinced a fourth should be awarded, and is doing his best to convince others the same. More specifically, he feels the fourth should go to the “true Southern Tier.” Controversy ensued when the license for the Southern Tier went to the Lago Resort and Casino in Tyre. New York Senator Tom Libous, who represents the Southern Tier, has sarcastically stated, “it’s a part of the Southern Tier I’m not familiar with,” and that Tyre is closer to Canada than Binghamton.

The two losing bids from the Southern Tier were Traditions Resort and Casino, and Tioga Downs, a racino in Nichols. Tioga Downs had plans for a $34 million casino expansion, $22 million hotel, $22 million dollar amenities building, $10 million in site development, and $3 million for Tioga Country Club improvements.

If bidding in the Southern Tier gets re-opened, Traditions has declared they would back down in hopes of Tioga being approved, who at this point, are the only known applicant and would be an early favorite. However, if the bidding process does in fact become reopened, it is possible some national groups may get in on the action. Due to this possibility, Cuomo and Libous are urging the process to begin sooner rather than later, especially considering Tioga would present the same proposal as before.

Tioga expects that with an expansion, they could generate $103.7 million in gross gambling revenue in 2016, but more importantly, siphon off around $12 million in lost revenue which has trickled over to Pennsylvania. Pennsylvania and their casinos have been a thorn in the side to casinos in surrounding states, and this may be the best hope of a counter attack for the region.

Libous is, to say the least, shocked that the New York Gaming Commission chose the Lago Resort and Casino in Tyre, population 981, as the sole Southern Tier Region recipient for a casino license. Senator Libous opened his recent press conference on the matter by saying, “We were stunned by the Location Board’s decision not the pick one of the ‘true’ Southern Tier sites, Traditions at the Glen, or Tioga Downs.”

Libous feels the intent of the legislature was to grant four licenses, but only three have been granted in the state. He is urging the board to reconsider a new review of Traditions at the Glen and Tioga Downs, who are teaming up for a combined casino proposal, which would be located at Tioga Downs.

The senator explained, “But it was their decision. When we wrote the original law we left the decision making process to the commission and to the board and wanted to keep politics out of it because every other state where politics was involved, there were issues that took place that were not good and not healthy for the states or its citizens. Our intent from the beginning was to not have politics a part of this process. I assure you if it was, one of the two Southern Tier sites would have been selected.”

It was brought up that politics will be in play now, to which Senator Libous responded, “I represent the Southern Tier. This is my priority and this is what I care about and we got the short end of the stick. I think it’s that important that we put the pressure on the board.”

To add insult to injury, the Cuomo administration announced they would ban hydraulic fracking for natural gas in the Southern Tier, which many in the region felt could be an economic lifeline.

An alliance of 13 upstart arts and entertainment venues are ecstatic with the news of the licenses, due to legal contracts with all three of the winning casino projects. The contracts level the playing field, and forbid the new casinos to penetrate the market and outbid existing venues with more money offered to performers and live shows. The three casinos will put an amount smaller than 1 percent into a fund for the Upstate Theater Coalition for a Fairgame, in addition to casino auditoriums limited to less than 1,000 seats. The money from the Farigame Fund will be dispersed “in an equitable way” according to Fairgame spokesman Paul Fahey.

The alliance includes Proctor’s, Saratoga Performing Arts Center and Saratoga Springs City Center, Palace Theatre and Times Union Center in Albany, Bethel Woods Center for the Arts, Troy Savings Bank Music Hall, Ulster Performing Arts Center in Kingston, State Theatre of Ithaca, Clemens Center in Elmira, Auditorium Theatre in Rochester and the Forum Theatre in Binghamton.

“The goal of the Fairgame was to minimize the financial impact on existing theaters,” Proctor’s Chief of Staff Jean Leonard said. Proctor’s CEO Philip Morris, who serves as chairman of Fairgame, was the architect of the deal and served as a catalyst for negotiation.