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Casino investment numbers released

Tuesday, May 13, 2014 - Updated: 10:03 AM

By NICOLE ANTONUCCI

nicole.antonucci@recordernews.com

It is anticipated that an operator/developer of a new casino in the capital region will have to invest at least $182.25 million to qualify for a gaming license, state officials said Monday.

A developer is required to make a minimum capital investment of $135 million, which will be spent on a casino, at least one hotel and other amenities.

The remaining $47.25 million includes costs for the licensing fee, land acquisition, financing and certain start-up expenses.

The numbers released by the New York Gaming Facility Location Board mark the latest step in the licensing process and will determine which casino operators and developers will move forward in obtaining one of four gaming licenses.

Approximately 22 parties have expressed interest in constructing casinos in the capital region, the Catskills and the Southern Tier/Finger Lakes, but only a few have thus far revealed how serious they are in pursuing it to the end.

Casino developments are being considered in several cities and towns in the capital region, including Albany, Amsterdam, Cobleskill, East Greenbush, Rensselaer and Schenectady.

Clairvest Group Inc., which is proposing a casino site off Thruway exit 27 in the town of Florida, could not be reached for comment Monday but Montgomery County Executive Matthew Ossenfort said he is confident that the local application will be moving forward.

"I think, in my personal opinion, the minimum investment at that amount opens it up to competition and it opens it up for sites in the capital region," Ossenfort said. "Hopefully that means turning around communities in upstate New York that need help is a priority of the gaming commission and the governor."

According to a release from the gaming commission, the minimum investment amount was based on data from recently constructed and proposed gaming facilities in several states, including Massachusetts, Maryland and Ohio. In-state developments of various Native American gaming facilities were also considered.

Such data included the nearby adult population, estimated total investment and required minimum investment in these facilities. The board also reviewed economic and financial models prepared by its consultants that were developed based on estimated gross gaming revenues for likely gaming facility locations and accepted industry operating margins, debt-to-equity ratios and rates of return.

In addition, the board's determination of minimum capital investment was influenced by "its desire to balance the goal of encouraging competition in order to preserve the integrity of the selection process with the goal of maximizing the economic benefits to the state and each region that are associated with high-quality, large-scale destination resorts," according to the release.

The minimum capital investment levels established are approximately 65 percent of the total amounts of the investment that developers are expected to make.

The minimum investment was significantly higher in Dutchess and Orange counties, which are closer to New York City and will draw from a larger population base. There, the total investment is $472.5 million, though the amount is less if casinos are sited elsewhere in the Hudson Valley and Catskills.

Total investments in the Southern Tier varies from $94.5 million to $182.25 million.

Applicants have five business days to withdraw from the process and receive a full refund of the $1 million application fee. After that point, the state will only refund a portion of the fee based on the amount spent on background investigations.

Applications are due June 30.

     

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