Timeline Could Play Big Role In Casino Licenses

Timeline Could Play Big Role In Casino Licenses

As Potential Bidders Eye Casino Licenses, Timeline Could Play A Big Role
February 14, 2014

Gov. Andrew Cuomo wants to have casino bids in by June, the winners selected by this fall, and gamblers showing up at new or upgraded Las Vegas-style facilities in New York as soon as early next year.

“Our challenge now is to make casinos a reality, make it happen, make it happen fast and make it happen correctly,” the governor said during his State of the State address. “Our current plan is March 2014 for the RFP to go out, bids come back in June and we hope to make the selections in early fall.”

But some experts say the ambitious timeline could ultimately give a leg up to existing racetrack casinos able to quickly upgrade to a full-fledged operation—thus creating a potentially uneven playing field.

“If the governor wants the quicker revenue, the tracks certainly have plant and equipment up,” said John Sabini, the former chair of the state’s Racing and Wagering Board. “If they set a short timetable, it’s fair to say that the tracks would have the upper hand.”

If the existing racetrack casinos, or racinos, do prove to be more attractive to the committee that will be formed to weigh bids, two likely contenders that would stand to benefit are Saratoga Casino and Raceway in Saratoga Springs and Tioga Downs in Nichols, a town in Tioga County.

State legislation allows for four casinos to be licensed in three upstate zones: the Capital Region, the Southern Tier and the Catskills. Three Native American tribes have exclusivity zones in parts of upstate New York, and the downstate region is off the table for at least seven years.

While some experts view the Saratoga racino as the favorite in the Capital Region, a group of local residents has launched an effort to keep any expansion out of the community. Moreover, while the constitutional amendment legalizing full-fledged casinos with table games passed handily in the state, a majority of voters in Saratoga County voted against it. Saratoga Springs’ new mayor, Joanne Yepsen, has also said that a Las Vegas style casino “has no place” in the city.

“If there continues to be opposition in Saratoga County to the facility there, and if that becomes a political liability to the governor’s office, that could change things,” Sabini said.

Still, the Capital Region is one of the less competitive upstate regions for obtaining a full-fledged casino license. U.W. Marx Construction’s riverfront development at de Laet’s Landing in Rensselaer and the Tobin First Prize packing plant are both potential sites for casino expansion, although it is less certain that developers will make bids tied to those locations.

In the Southern Tier, which also appears to have relatively few potential bidders at this point, the Tioga Downs racino is widely seen as the front-runner. However, the owners of Traditions at the Glen, a resort and conference center in Broome County, are touting their plans for a large casino, including backing from local officials. The owner of a Holiday Inn in Binghamton is also exploring a bid.

The third region, the Catskills, has drawn far more interest. Two competing groups of investors are eyeing the old Concord hotel as a site, one headed by the owners of another existing racino, Monticello Raceway, and another that includes the owners of Mohegan Sun, a massive Native American casino in Connecticut.

Mohegan Sun’s Connecticut rival, Foxwoods Resort and Casino, is a partner with another group that wants to build a casino at the old Grossinger’s resort. Another partnership is looking at Ulster County’s the Nevele, also an old hotel from the Catskills’ Borscht Belt heyday. Other potential bidders include the Catskills Entertainment City and Casino Resort in Sullivan County and Greenetrack, an Alabama-based company that could apply for a license in the region.

State Sen. Joseph Addabbo, whose district includes the lucrative Resorts World New York Casino in Queens— which is out of the running for now— predicted the state would weigh all bids equally in deciding which ones should win licenses.

“We’ve seen where these racinos that are attached to racetracks are quite successful. I could point to Resorts World, which has been very successful—so we do have a product that has a success record. I’m sure that will be considered,” the lawmaker said. “But this is a case-by-case basis. I don’t think there’s a cookie-cutter approach that could be taken here. So I think all sites should be considered, whether they have a racetrack attached to it or not.”

If that is the case, the process will likely take longer than the governor has publicly called for, said Alan Woinski, president of Gaming USA Corp. After the siting committee, which currently has only partially been named, issues a request for proposal and selects winning bids, the state still has to set up a new system to monitor and collect revenue, table games have to be installed and workers have to be hired and licensed. If the process is rushed, the casinos could be vulnerable to savvy gamblers looking to exploit errors or confusion, Woinski added.

“If [the governor] has any hope of getting any casino revenue in the next year, he’s going to have to give it to one of the existing properties,” he said. “Doing this RFP and all this stuff, there’s going to be nothing but delays. It happens in every jurisdiction; they can say whatever they want, but there will be delays. Most likely next year at this time, we’ll be sitting there wondering when there’s going to be revenue coming in, because they may not even be able to announce it by this time next year.”

Jon Lentz
is City & State’s editor-in-chief.