Low $350 Million Capital Investment Required to Build Casino Close to NYC
Yesterday a New York State gaming panel announced that competitors to open a commercial casino in Orange County, just an hour from New York City, would have to invest a minimum of $350 million in capital, which industry experts have deemed a low down payment for a franchise that will cost upward of a billion dollars, reported The New York Times.
Lawmakers in Sullivan and Ulster Counties, as well as Catskills casino proponents, have said they wanted the state to set a minimum investment in Orange County as high as $1 billion to discourage developpers. The nearly dozen rivals for a gaming license in the Catskills region have voiced fears that an Orange County license could cripple their ability to get financing. Lawmakers have also argued that Gov. Andrew Cuomo's referendum to revive struggling upstate communities with seven casino licenses was originally targeted at counties with high unemployment and low median income. Orange County doesn't fit that criteria, some contend. The four new casinos the state legislature will permit this year were also supposed to be confined to three specific regions in upstate: around Albany, in the Catskills-Hudson Valley area, and in part of the Southern Tier, which borders Pennsylvania.
“I think it shows that they are rushing through this and that this has clearly not been thought out,” said Mitchell Grossinger Etess, the chief executive of the Mohegan Tribal Gaming Authority who hopes to rejuvenate his family’s Grossinger’s resort in Liberty, New York, part of Sullivan County in the Catskills region—the state's historic Borscht Belt. “The premium spot, and they are only asking $350 million? It doesn’t speak to creating economic development.”
The Mashantucket Pequot-owned Foxwoods Resort Casino also hopes to develop in Liberty, and has gone as far as to open a business headquarters in the city.
The New York Gaming Facility Location Board announced the $350 capital requirement three weeks after 22 interested parties submitted their $1 million, nonrefundable application fees each for consideration. The required investment is unlikely to disuade any developpers, particulalry Caesars Entertainment and the Genting Group, which have announced plans for Orange casinos.
All bids are due by June 30, and the board will name the winners in the fall. After selections are announced, developpers will have just two years to open their doors. While in November voters approved Cuomo's referendum to allow up to seven new casinos in the state, only four licenses will be issued this year. New York is already home to five Indian casinos upstate, as well as nine racetracks with slots.
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