It will cost $1 million to even apply for a license.
The license itself will cost up to $70 million.
And New York State will most likely require that each of the winning developer-operators spend hundreds of millions of dollars to build one of the shimmering casino resorts upstate that officials hope will attract tens of thousands of customers and transform the local economies.
In short, it will take a fortune just to open the doors of a full-scale casino in New York, according to the application issued on Monday by the State Gaming Commission.
As many as 20 contestants — including Hard Rock, Penn National, Empire Resorts, the Flaum family real estate company, the Mashantucket Pequot tribe and the Stockbridge-Munsee Indians — have said in recent months that they will compete for at least one of the casino licenses.
But the daunting financial requirements, starting with the nonrefundable $1 million application fee due no later than June 30, will almost certainly winnow the list.Continue reading the main story
The most intense competition is shaping up in the Catskills, the region closest to New York City and its dense mix of residents and tourists who might be attracted to gambling.
Still, there are several operators already contending for a license in a more sparsely populated region in western New York, running from Binghamton north to the Canadian border.
“You’ve got to locate where there’s a real market,” said Gordon Medenica, director of the New York State Lottery from 2007 to 2012. “This field-of-dreams strategy is out of date.”
Gambling has proliferated in the Northeast to the point where some analysts say that the market is saturated, with casinos or slot machine parlors in Connecticut, Maryland, New Jersey, New York, Pennsylvania and Rhode Island, and more to come in Massachusetts.
In New York there are now five Indian casinos upstate and electronic slot machine parlors at nine racetracks. But Gov. Andrew M. Cuomo, who led the effort to legalize casino gambling, is hoping that full-scale casino resorts will transform depressed upstate regions with jobs, tax revenues and tourists.
The newly created State Gaming Commission and its location board will assess the applications for a license based primarily on how much economic development a project would generate. But it will also take into account local impact and the project’s employment plan. Applicants will also have to demonstrate local support for their casino project.
“This marks the beginning of the bidding process for long-anticipated gaming facilities to benefit upstate New York,” said Paul Francis, a member of the location board.
The location board indicated on Monday that it would set a minimum required investment for proposed projects in each of the three regions in contention — the Catskills, western New York and the Saratoga-Albany area — after a bidders’ conference in April.
At least five rivals have been working for years on $500 million proposals in Sullivan and Ulster Counties, in the northern Catskills, where the economy has been weak since the collapse in the 1970s of the old borscht belt resorts and bungalow colonies. But in recent weeks, several casino developers have proposed sites in the southern Catskills, specifically Orange County, which is only 50 miles from Manhattan.
That has caused the Sullivan and Ulster County contestants concern that they will be unable to obtain financing for their projects. The slot parlor operator at the racetrack in Yonkers is also concerned that a full-scale casino in Orange County would undermine the slot parlor’s viability.
According to the casino application issued on Monday, a license in Orange or Dutchess County would cost a minimum of $70 million, and a license in the northern Catskills would go for a minimum of $35 million. But if no license is awarded in Orange or Dutchess, a license elsewhere in the Catskills would cost $50 million. Depending on the location, a license in western New York would cost from $20 million to $50 million. A license in the area between Saratoga and Albany would cost a minimum of $50 million.
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