Bidding War: The Southern Tier and Finger Lakes Regions

Two casino licenses are being sought in the Southern Tier region and one is being pursued in the northern Finger Lakes region in Seneca County. Both bidders in the Southern Tier say the operations of a Finger Lakes casino will have a minimal effect on them, and the lone developer in Seneca agrees. While these three Western New York developers are competing head-to-head per the rules of the Upstate New York Gaming and Economic Development Act, in theory two of them could win approval to build. Both Southern Tier applicants would expand upon existing businesses and argue that they could not co-exist without some cannibalization of each other’s markets. One went so far as to say it could not continue to exist if the other is selected.


 

Traditions Resort & Casino
Broome County

The Basics 

Location: Johnson City, within the Binghamton metropolitan area, right off the Southern Tier Expressway (Route 17). The casino would be eight miles as the crow flies from the Pennsylvania border or 20 driving miles via I-81.
Applicant: Traditions Resort and Casino, LLC, an affiliate of Traditions at the Glen Resort and Conference Center
Operator: Gaming & Leisure Advisors, LLC, an affiliate of Seneca Gaming Corp., which already runs three casinos in Western New York on behalf of the Seneca Nation
of Indians

Operator Projections 

Investment: $212 million
Financing: $80 million sale-and-leaseback of property through Gaming and Leisure Properties Inc.; “highly confident” letter for a $175 million loan from global financing firm Jefferies (no commitment)
Annual Gaming Revenue:
$135 million
Employment:
Construction: 546 direct jobs, 396 indirect jobs
Permanent: 842 direct jobs, 361 indirect jobs
Annual Gaming Taxes and Fees:
$33 million

 

The Proposal:

Traditions Resort & Casino would be an expansion of the already established Traditions at the Glen Resort and Conference Center, which is adjacent to a 200-acre wildlife reserve and currently features an 18-hole golf course, 40 hotel rooms, a spa and numerous dining options. The proposed casino would feature 1,200 slot machines and 50 gaming tables, as well as 160 new hotel rooms and an outdoor entertainment venue. Traditions at the Glen owner Bill Walsh touts the area’s restaurants, theaters, museums, sports venues and wineries, and says his company has reached out to local businesses with the idea of encouraging casino goers to explore the surrounding region as well. Traditions downplays the cannibalizing effect its casino would have on the nearby Tioga Downs Racetrack, located some 30 miles west along the Southern Tier Expressway, arguing that its status as a destination resort will draw customers from Pennsylvania and Ohio. (Mohegan Sun at Pocono Downs is located in Pennsylvania 77 miles to the south.)


 

Tioga Downs Racetrack & Casino
Tioga County

The Basics

Location: Directly off the Southern
Tier Expressway (Route 17) in the Village of
Nichols, two miles north of the Pennsylvania
border
Applicant: Tioga Downs Racetrack, LLC
Operator: Same as applicant

Operator Projections

Investment: $187 million
Financing: Through EPR Properties (no
more information available)
Annual Gaming Revenue: N/A
Employment:
Construction: 1,200 jobs
Permanent: 900 direct jobs, 240 indirect jobs
Annual Gaming Taxes and Fees: N/A

 

The Proposal:

Tioga Downs has been in the racetrack gambling business since 1996, and owner Jeff Gural says the business has been profitable for the past two years. The expanded casino would be located on the current Tioga Downs property, which is a 30-minute drive to Binghamton, and Gural touts broad community support for the plan. It would feature 1,000 slot machines and 50 table games, a 136-room hotel, five restaurants, two lounges, an events center and an 18-hole golf course. The casino would be operational within 180 days of being awarded a license, according to developers, with some nongaming amenities ready within a year. In addition to the taxes and fees paid to the state, Gural has promised to donate $500 million annually to local charities through the Tioga Downs Southern Tier Charitable Foundation. In Gural’s view the Southern Tier can only support one casino; if Traditions wins, he contends, Tioga Downs will probably go out of business. Mohegan Sun in Pennsylvania is 107 miles away, but according to Gural it still cuts into Tioga Downs’ revenues.


 

Lago Resort & Casino
Seneca County

The Basics

Location: Town of Tyre, off Exit 41 of the New York State Thruway and near the northern tip of Cayuga Lake and the Montezuma National Wildlife Refuge. Lago would be a 50-minute drive from Syracuse and Rochester, and a two-hour drive from Buffalo.
Applicant: Rochester-based Wilmorite, Inc., owned by Thomas Wilmot
Operator: JNB Gaming, LLC
Financial Partners: Peninsula Pacific Strategic Partners, Beach Point Capital Management

Operator Projections

Investment: $425 million
Financing: $63 from Wilmorite Inc. and Peninsula Pacific; $27 million from Beach Point Capital Management; $335 in debt financing from Credit Suisse
Annual Gaming Revenue:
$263 million in first year; $348 million by 2026
Employment:
Construction: 1,200 direct jobs, 600 indirect jobs
Permanent: 1,230 direct, 632 indirect
Annual Gaming Taxes and Fees:
$6.4 million local, $83.9 million to New York
State

 

The Proposal:

The developers of Lago envision a true destination resort experience—an extension of the region’s tradition of tourism. The newly constructed casino, which would feature 2,000 slots and 85 table games, would also be billed as a gateway to the area’s vineyards and other man-made and natural attractions. The resort would feature a four-star hotel with 208 rooms, fine dining and a 1,700-seat entertainment venue. Buffets and other dining options would place an emphasis on locally sourced wine and food. The developers maintain that 100 percent of the financing for construction and operation is fully in place, as are the union labor agreements, and the shovel-ready project would be completed 18 months from the date a license was awarded. If they are given the go-ahead, Wilmorite and its partners plan to work with Finger Lakes Community College to devise a curriculum to train dealers, midlevel management and other positions for employment at the casino.

The company claims it will generate more money than either of the Southern Tier proposals—despite being 75 miles from the Native American-owned Turning Stone casino near Utica—because of its relative proximity to Syracuse and Buffalo, and because of area attractions such as lakes and national parks. The project also has the advantage of being relatively isolated geographically from other casino proposals.

Although the plan has broad support from local government and businesses, a group calling itself Casino-Free Tyre opposes the plan.

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