Developers Draft Casino Plans, Signaling Fight for New York’s Licenses

Print
Developers Draft Casino Plans, Signaling Fight for New York’s Licenses

Three weeks after New York voters approved a constitutional amendment allowing up to seven new casinos in the state, a growing number of developers are scrutinizing locations and drafting proposals in anticipation of a bidding process that is expected to begin early next year.

The first four casinos will be permitted only north of the New York City area, and some in the gambling industry have questioned whether the upstate regions are attractive markets for resort-style casinos. But early signs suggest there will be some amount of competition — even if the scale of some of the proposals is modest, and the big companies from Las Vegas remain on the sidelines.

Gov. Andrew M. Cuomo, a Democrat who has championed expanded gambling as a way to create jobs and generate revenue in struggling parts of upstate, is looking to move quickly in awarding the new casino licenses. State officials said that bids were likely to be due by mid-2014, and that licenses could be awarded in the second half of the year.

“Now that it’s actually a reality, we’re getting a great deal of attention from really major players, so that’s exciting,” the governor said in a recent interview on “The Capitol Pressroom,” a public radio program.

The selection process will be watched closely because of the money at stake and the potential for ethical trouble. Gambling interests have spent tens of millions of dollars seeking to influence state government in recent years, and an investigation in 2010 found that a competition to install slot machines at the Aqueduct racetrack in Queens had been a “political free-for-all,” with State Senate leaders manipulating the process to help a favored bidder.

New York State already has five Indian-run casinos, all of them upstate, and nine slot machine parlors at racetracks.

The licensing of new casinos will be overseen by the State Gaming Commission, an agency assembled this year that also regulates the lottery and horse racing. Mr. Cuomo has the power to select five of its seven members, and its current chairman is one of his former aides; an administration official said on Sunday that the governor was seeking to recruit “a well-known individual with private-sector credibility” to serve in that post in the long term.

The commission has the task of creating a Gaming Facility Location Board, a five-member panel that is meant to be free from political influence. Anyone holding public office or with financial ties to the gambling industry cannot serve on the panel, and its members must have expertise in areas such as finance or commercial real estate.

“They’re going to go over the top to make sure that this whole process is honest,” said Senator John J. Bonacic, a Republican from the Hudson Valley who is chairman of the Racing, Gaming and Wagering Committee. “It’s going to be very transparent.”

The first four casinos are restricted to three parts of the state: the Catskills and Hudson Valley; the Albany and Saratoga Springs area; and a portion of the Southern Tier and Finger Lakes region. Initially, no casinos are to be allowed in the New York City area, and much of upstate is off-limits to casino developers because of exclusivity agreements between the state and Indian tribes, which operate their own casinos.

Mr. Cuomo and lawmakers agreed in June on legislation that laid out criteria for judging the bids. The biggest consideration, counting for 70 percent of the evaluation, is the projected economic impact of the proposal. Another 20 percent is based on local support, and 10 percent on other issues like hiring practices.

The Gaming Facility Location Board will have to determine how to assess local support; unlike in Massachusetts, where voters in several communities have recently rejected proposed casinos, New York does not require approval through local referendums.

Even before the constitutional amendment was approved by voters in New York, several developers said that, if the measure passed, they would seek to build casinos in the Catskills, which is expected to be the most sought-after region given its proximity to the city. Developers are particularly interested in building casinos at the sites of defunct resorts such as the Concord and Grossinger’s, both in Sullivan County, and the Nevele in Ulster County.

The combined Southern Tier and Finger Lakes region is proving unexpectedly competitive. The owner of a racetrack casino in the Southern Tier — a region along the border with Pennsylvania — is seeking to expand the racetrack for full-scale gambling. In the Binghamton area, the owners of a small resort and conference center, Traditions at the Glen, have unveiled a proposal to build a casino with 1,200 slot machines and 50 table games. They announced their plans to considerable local fanfare, complete with a pipe band that led a procession of visitors to the site where they planned to build the casino.

“We think we can further evolve our property and revitalize this whole community with what we’re about to do,” said Bill Walsh, whose family owns the property, a onetime country club for IBM employees.

In the Finger Lakes region, at least one developer is working on a proposal, said Robert W. Hayssen, the chairman of the Seneca County Board of Supervisors.

“We have so much more to offer as a tourist destination,” said Mr. Hayssen, who cited attractions like the region’s wine trails.

Las Vegas companies have indicated they are not interested in developing casinos upstate, instead holding out for the possibility of a casino in New York City that could be authorized in the future.

But they are clearly paying attention: Caesars Entertainment made a last-minute $100,000 contribution to a campaign that urged voters to approve the Nov. 5 referendum, according to state campaign finance records. And six days after it passed, Wynn Resorts announced it had decided to withdraw a proposal to develop a casino in Philadelphia, citing among its concerns the competition it would have faced from new casinos in New York.

Read more http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNFrT3HC8r0gRAcaVsMDlr6b43K5Og&url=http://www.nytimes.com/2013/11/25/nyregion/competition-is-expected-for-new-york-states-casino-licenses.html