12/17/2014 4:29PM

Three locations in upstate New York approved for casinos


New York regulators on Wednesday tabbed three casino proposals in upstate locations for licensing while rejecting all applications for a casino in the location approved by legislators that was closest to New York City.

The five members of the New York Gaming Facility Location Board voted unanimously to approve the casinos in Seneca, Sullivan, and Ulster Counties. The board had the authority to approve another project in Orange County, approximately 50 miles northwest of New York City, but they rejected the idea, saying that another casino in the area would cannibalize the existing slot-machine operations at racetracks to the south, including the Genting casino adjacent to Aqueduct and a casino at Yonkers Raceway.

Voters in New York State authorized the awarding of up to seven new casinos licenses in the state in a referendum last year, with the first four to be reserved for upstate locations. Initially, 22 companies applied for consideration, a list that was winnowed down to 16 by the time the board began soliciting detailed proposals for the project.

The vote on Wednesday is only a beginning step. The approved companies now must undergo detailed background checks and the sites have to be reviewed for environmental impact. In addition, losing bidders and local groups opposed to the projects are expected to at least explore challenges to the board’s decision.

Among the proposals that were passed over by the board was an application filed by a partnership of Churchill Downs Inc. and Saratoga Casino and Raceway. The partnership was seeking a license for a site in Albany, approximately 30 miles south of Saratoga Springs, where a slot-machine casino operates alongside the city’s harness track.

The board did approve a casino in Schenectady, just northwest of Albany, the state’s capital. The casino is being developed by the Galesi Group and Rush Street Gaming, a firm based in Chicago. The casino is planned for a brownfield site on the banks of the Mohawk River.

Another of the projects approved by the board was a casino in Tyre in Seneca County, in the Finger Lakes region of western New York, at a location just off I-90 between Syracuse and Rochester. The casino is being developed by Rochester-based Wilmorite Inc.

The third project will be located in Thompson, and will be developed by Empire City Resorts, the owner and operator of a Monticello harness track that receives statutorily required subsidies from an attached slot-machine parlor. Thompson is near both Monticello and the borders of northern New Jersey and eastern Pennsylvania.

While the casinos are not expected to open for several years, they have the potential to disrupt the casino market on the Northeast seaboard. Slot-machines parlors already in New York are expected to suffer due to the new licensees’ ability to offer table games, while casinos in adjacent states like Pennsylvania are also expected to lose some customers that traveled from locations in central or western New York.

Saratoga Racecourse, operated by the New York Racing Association, has not suffered any significant handle declines in the decade since the slot-machine parlor opened at the nearby harness track, and it is not expected to be significantly impacted by a casino near Albany. However, that is not necessarily the case with the casino at the harness track, which will now face competition from a full casino that is a 30-minute drive away.

The law authorizing the casinos does not reserve a portion of the gambling revenues for racing subsidies, unlike the 13-year-old law that authorized slot machines at racetracks. The casinos will also pay a lower tax rate on their gambling revenues than the existing slot-machine operations.

The law prevents the state from authorizing any licenses in the New York City area for seven years.