What Happens in Upstate New York, Stays in Upstate New York – While it might not have the same ring to it as “what happens in Vegas, stays in Vegas,” on December 21, 2015, the New York State Gaming Commission (the “Gaming Commission”) awarded licenses to three (3) Las Vegas-style destination resort casinos pursuant to The Upstate New York Gaming Act of 2013 (the “Gaming Act”). With the stated purposes of job growth and increased funding to local schools and municipalities for tax relief, the Gaming Act and its streamlined competitive application and land use development processes represent an effort by New York State to remove the red tape and other barriers that often inhibit doing business in New York.

Now only four (4) years after Governor Andrew M. Cuomo proposed an amendment to the state constitution to permit casino gaming, these licenses are the “golden tickets” for three (3) casino operators that hit the jackpot in a crowded pool of applicants that competed for a license in the first wave of new casino developments in New York State. With a fourth license anticipated for a casino in the Southern Tier, and the potential for three (3) additional casinos that could find their way into Westchester County and New York City (amongst other regions in New York) after a seven-year exclusivity period,1 the Gaming Act is an example of legislation that streamlines development in New York State – emphasizing the importance of speed to market.

The Gaming Act 

Signed into law on July 30, 2013, by Governor Andrew M. Cuomo, the Gaming Act authorized up to four (4) gaming resorts in three (3) defined regions of upstate New York: Hudson Valley/Catskill area, Capital Region, and Eastern Southern Tier.2 While the proposed amendment to Section 9 of Article 1 of the New York State Constitution permitted the state Legislature to authorize up to seven (7) total casinos in the state, under the Gaming Act, the Commission was only authorized to license up to four (4) casinos in the three (3) defined upstate regions – at least for now.

In a competitive market, with adjoining states adding casinos to keep gambling dollars within their borders and online/internet gaming and fantasy sports providing new avenues for gambling, speed to market will play a critical role in the next round of licensing in New York State.

The first three (3) of four (4) licenses were awarded on December 21, 2015, and a fourth license is anticipated for a casino in the Southern Tier, for applicant Tioga Downs, through a second round of bidding. While a series of lawsuits have been filed by the Oneida Indian Nation against one (1) licensee, Lago Resort & Casino in Tyre, Seneca County, a judge recently dismissed the latest action pursuant to the State Environmental Quality Review Act (“SEQR”), finding that the Town of Tyre properly considered the impacts to the community in compliance with SEQR.

A Full-Scale Casino Development in Westchester? 

After a seven-year exclusivity period, the New York State Legislature can reopen the process to permit the expansion of commercial gambling for up to three (3) more casinos in accordance with the constitutional amendment. Although significant amendments to the Gaming Act will likely be required, provided the Zones and Regions in the existing legislation, these casinos could find their way into areas including Westchester County and New York City.

Whether the residents of Westchester County and the communities that comprise Zone One will get the chance to consider a proposed full-table gaming casino development within their borders may be a story for another day.

During the first rush for casino licenses, officials and business leaders in Westchester County were quick to point out the potential impact that a new casino in Orange County (in the Hudson Valley/Catskill region) might have on a casino like Empire City Casino in Yonkers. While the Gaming Commission ultimately did not award a casino license to a facility in Orange County, citing amongst other concerns potential speed to market issues, including the SEQR process, Westchester and its “downstate” competitors will be keeping a close eye on the opportunity to permit full table gaming in the future.

In a competitive market, with adjoining states adding casinos to keep gambling dollars within their borders and online/internet gaming and fantasy sports providing new avenues for gambling, speed to market will play a critical role in the next round of licensing in New York State. While New York State initially bet big on its upstate casinos, it might not be long before the State doubles down to include similar licensing opportunities for downstate developments.

  1. See Racing, Pari-Mutuel Wagering and Breeding Law § 1310(1) (Zone One consists of Long Island, New York City, and Westchester, Rockland and Putnam Counties); see also Racing, Pari-Mutuel Wagering and Breeding Law § 1311(1) (prohibiting any casinos from opening in Zone One).
  2. The Gaming Act (Chapters 174 and 175 of the Laws of 2013) outlines the procedure and process for siting destination gaming resorts in New York State. The primary provisions of the Act are included in Article 13 of New York’s Racing, Pari-Mutuel Wagering and Breeding Law.
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