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This architectural rendering image provided by Lago Resort and Casino, shows an exterior view of their proposed casino in Tyre, N.Y. The development in the Finger Lakes region was recommended for a casino license on Wednesday, Dec. 17, 2014. (AP Photo/Lago Resort and Casino) (Photo: AP)

ALBANY -- A new Finger Lakes casino will have an advantage over existing gambling facilities because it will have table games and a better tax rate, a report Friday from Moody's Investment Services contended.

The Lago Resort & Casino is set to open in a year in Tyre, Seneca County, just off the state Thruway at exit 41. The casino will enter an already competitive gambling market -- with Batavia Downs and Finger Lakes racetracks to the west and the Turning Stone Casino near Syracuse to the east.

The report from Moody's said the $425 million Lago will benefit from having table games -- which are banned at the racetracks -- as well as a better tax rate from the state. It said the new casino will be a "credit negative" for the existing gaming halls. There are also three casinos in the Buffalo area run by the Seneca Nation of Indians.

Peter Trombetta, a Moody's analyst, said in a statement with the five-page report that "Lago's location and product offerings uniquely position it to cannibalize gaming customers" from its competitors.

Finger Lakes, located in Farmington, Ontario County, and the Turning Stone have both opposed the Lago casino, saying it will hurt their existing operations. Finger Lakes, about 30 miles from Lago, is seeking tax parity with Lago, and Gov. Andrew Cuomo in his proposed budget Jan. 13 supported Finger Lakes' request. It would be up to the state Legislature to adopt the measure.

"This has never been about competition, but rather the inability to effectively compete, and the fact that it will not benefit the state in the end in terms of either jobs or revenue," Finger Lakes said in a statement Dec. 21 when Lago was awarded the casino license by the state Gaming Commission.

The Oneidas, the central New York tribe that owns Turning Stone, are suing the state to overturn the license to Lago and last year opened a Wizard of Oz-themed casino closer to Syracuse to bolster their presence in the region.

Last month, the Oneidas lawsuit contended that at least 50 percent of Lago's business would come from existing gaming halls in the region.

Lago, owned by Rochester developer Thomas Wilmot, has defended its plans, saying the casino would be a boost for the region and complement tourism to the Finger Lakes.

"We are excited about and focused on building the best resort and casino in upstate New York to create jobs, increase tourism and generate real economic opportunity and growth for the Finger Lakes region," Lago spokesman, Steven Greenberg, said in a statement. "We are increasing the pace of construction and look forward to opening early in 2017 as a new regional draw for visitors from near and far."

Moody's said that Lago plans to borrow $345 million for the project, as well as include $15 million of vendor financing and $110 million of cash to build the casino, which would have about 2,000 slots and 85 table games.

Moody's predicted that over the next three years, slot-machine supply will increase 30 percent in the region because of Lago and the Rivers Casino opening in Schenectady outside Albany.

Moody's also raised the issue of Lago's tax advantage over Finger Lakes and Batavia Downs. Lago will pay a a 37 percent tax rate on its slot machine revenue and a 10 percent tax rate on its table game revenue, while Finger Lakes, owned by Buffalo-based Delaware North, pays more than a 70 percent tax rate.

The report said that while Cuomo's plan would reduce Finger Lakes' rate to about 60 percent, "it would still be operating at a tax disadvantage."

Moody's also said that while the state's nine racinos had a strong year in 2015, the new Lago casino would pull from the Turning Stone, Batavia Downs and Finger Lakes. Lago will be between Rochester and Syracuse, which have a combined population of more than 1.5 million people, the report noted.

"At 50 miles, Lago will be the closest full scale casino to Rochester (Seneca’s Buffalo casino is 75 miles west of Rochester), providing stiff competition to the existing racinos closest to that city – Finger Lakes and Batavia Downs," the report said.

Moody's, however, didn't anticipate much impact from Lago on Tioga Downs in the Southern Tier, which is in the midst of getting state approval to turn its racetrack with video-lottery terminals into a full-scale casino.

The state Facility Location Board on Dec. 17, 2014, picked Lago from three projects seeking a casino license in the Southern Tier/Finger Lakes region. The bidding for a Southern Tier casino was reopened in early 2015, and the Tioga Downs was selected in October.

"We do not expect Tioga Downs to impact Lago as it is about two hours south and will be competing in different markets," the report said.

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