Tuesday August 20, 2013

PAUL POST

The Saratogian

SARATOGA SPRINGS, N.Y. -- Construction on the state’s first Las Vegas-style casino could be under way a year from now if voters approve a proposition allowing for such gaming.

Dozens of racing, gaming and state officials gathered recently at the Gideon Putnam Hotel for a program about the future of casino gambling in New York.

In November, a constitutional amendment will be put before voters statewide that would permit full-scale casino gaming at four upstate locations, including one in the Capital Region.

"I think it’s likely to pass," said Daniel Gerrity, Saratoga Casino & Raceway president.

The local harness track is considered a leading candidate to get one of the four licenses and has a $30 million expansion planned, including a five-story, 120-room hotel, event space and fine-dining restaurant.

Tioga Downs owner Jeff Gural said he, too, plans to submit an application for his harness track casino and doubts there will be much competition in his region.

"Plus, we’re near the Pennsylvania border, so we’d get some of those people," he said. "That’s what the state wants."

Both Saratoga and Tioga have existing facilities that simply need upgrading, meaning they could start generating revenue for the state more quickly than a new casino that has to be built from scratch.


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"That gives us an advantage," Gural said.

While it hasn’t been officially decided, the two remaining casinos will most likely be in the southern Catskills. In a state where politics weigh heavily, this economically depressed region has a strong advocate in state Sen. John Bonacic, R-Mt. Hope, the senate’s Racing, Gaming & Wagering Committee chairman.

"We’re so desperate that now we need a game-changer," he said. "Gaming is a vehicle. This is an opportunity to bring private-sector money in. There is an interest in the Catskills and the New York market because of proximity to 10 million people." Bonacic said he expects large, non-New York gaming companies such as MGM, Caesars and Foxwoods to at least consider such opportunities.

The Genting Group, which runs Aqueduct Racetrack’s new casino -- Resorts World New York -- has an interest in Monticello Raceway’s casino and is seen as a likely applicant for a full-fledged casino there, too.

New destination casino resorts would return the Catskills to its Borscht Belt heyday of the early- and mid-20th Century, when places such as Grossinger’s and The Concord were world-famous vacation spots, Bonacic said.

The Nevele hotel group wants to put a casino at the site of the former Nevele Grande, near Ellenville in southern Ulster County. Plans call for a casino, hotel and championship golf course along with extensive retail, dining and entertainment.

However, not everyone welcomes the prospect of expanded gaming with open arms. Two casinos in the Catskills and another at Tioga, near Binghamton, would seriously impact Catskill Regional Off Track Betting, said Donald Groth, the firm’s president and chief executive officer.

"It could put us out of business," he said.

Groth said he’s hopeful the state will allow upstate OTB companies to compete with casinos by putting video gaming machines in some of their betting facilities.

"That’s the current elixir," he said.

At present, only slot-like video gaming machines and some electronic table games are allowed at New York’s racetrack casinos. Las Vegas-style, full-scale casinos have live dealers and attendants for games such as poker, baccarat, craps and roulette.

If the proposition is approved, casinos would only be allowed in three regions -- the Capital District, Southern Tier and Catskills. Native Americans have exclusive rights for their casinos in three other upstate areas -- the North Country, Central New York and the Buffalo/ Niagara region.

The bill does not allow for a new casino in metropolitan New York or Long Island.

It’s estimated that New York residents spend at least $3 billion annually at out-of-state casinos, from Connecticut to Las Vegas. One of the state’s goals is to keep that money in New York.

The Northeast is becoming increasingly saturated with gaming. Vermont is the only state or Canadian province bordering New York without casinos, or plans for some. Massachusetts has approved legislation allowing for three facilities, including one near Springfield that’s expected to have a major impact on Foxwoods and Mohegan Sun in Connecticut.

"We have reached a point where, except in New York Š that the profitability of most of these facilities is going down," said James Featherstonhaugh, New York Gaming Association president. "There are only so many gamers to go around," said Richard Baldwin of Union Gaming Group LLC, an industry consulting firm.

In New York, revenues keep going up because money that previously went out of state is staying home as more facilities open, said J. Gary Pretlow, D-Yonkers, Assembly Racing, Wagering & Gaming committee chairman.

Aqueduct’s casino in Queens, which opened in late 2011, hurt Foxwoods, Mohegan Sun and Atlantic City considerably. Applications for new casinos in New York will be reviewed by a five-member siting panel, yet to be named, comprised of leading accountants.

Panel members will be appointed by the New York Gaming Commission that regulates the state’s racing and gaming operations.

The siting panel will award casino licenses based on three main criteria.

They are:

* Economic (70 percent) -- This includes the casino company’s own financial stability, ability to generate revenue and the amount it’s willing to give the state as an up-front payment in return for a license.

* Local issues (20 percent) -- Community support and impacts.

* Labor (10 percent) -- Relationship with labor groups and number of jobs created.

For all of this to occur, first the proposition must pass, and then the state must issue a request for proposals, stating specifically what it’s looking for from applicants, who also have to conduct their own market analysis and consider potential casino locations.

"The next couple of years are going to be an interesting time for all of us," Featherstonhaugh said.