Del Lago Resort in Finger Lakes Pays $50 Million Licensing Fee to New York
The Del Lago Resort & Casino submitted a $50 million licensing fee payment to the State of New York this week, despite several lawsuits against the project. Lago Resort is the Finger Lakes license in the casino licensing process which awarded 3 licenses to casino developers in three distinct regions of the state.
All three casino developers are required to pay a $50 million licensing fee by the end of March 2016. Under terms of the licensing agreement, 10% of the fee goes to the casino’s host city and county. Another 10% of the fee goes to other counties in the region, as parceled out by the state. New York state keeps the remaining 80%.
Brent Stevens, who serves as the co-chairman of the Del Lago Resort, gave a public statement about the payment. Stevens said, “We are delighted to announce that del Lago Resort & Casino has fulfilled its initial obligation to New York state and made the $50 million payment for the cost of our casino license.”
Name Change for Lago Resort
The $420 million project, which recently changed its name from “Lago” to “Del Lago”, is owned by Rochester real estate developer Thomas Wilmot. The resort is going to be located at exit 41 on the New York State Thruway. The developers hope to open the casino early in 2017.
Delaware North Lawsuit
Lawsuits could cause delays in the project, though. The resort faces legal challenges from two other local gaming entities: Finger Lakes Gaming & Racetrack and the Turning Stone Casino.
Finger Lakes Gaming & Racetrack is owned by the Buffalo-area business institution, Delaware North, which also owns racetracks in a number of states. The racetrack is located in Farmington, Ontario County, and is suing because they believe Del Lago is going to harm their business. In particular, Jeremy Jacobs — head of Delaware North and owner of the Boston Bruins — believes the process for awarding the license was unfair.
Turning Stone Lawsuit
The owners of the Turning Stone Casino in central New York are also suing. Turning Stone is a tribal casino owned by the Oneida Indian Nation, which believes Del Lago was placed too close to their gaming interests.
To protect their own gaming venture and damage Del Lago’s business, the Oneida Indian Nation announced in December 2014 they would open a $20 million casino in Chittenango: the Yellow Brick Road Casino. The satellite casino is meant to build a firewall between Del Lago and Turning Stone, in which nearby gamblers likely would go to the “slots in a box” gaming venue in Chittenago.
Market Saturation
Such actions might seem petty and greedy, but plenty of evidence suggests that market saturation has happened in the American northeast. Casinos which do not anticipate the market have been left behind in the past 10 years.
Atlantic City has seen 4 of its 12 casinos close in the past couple of years, as the market became more fractured and localized. Not enough people were going out of state to visit the Boardwalk casinos.
Tribal Gaming in Connecticut
In Connecticut, the two massive tribal casinos — Mohegan Sun and Foxwoods Casino — have fallen billions of dollars in debt. Foxwoods is said to owe about $2.3 billion and Mohegan Sun about $1.6 billion. They are facing new pressure from the MGM Springfield Casino in Western Massachusetts, or they will face such pressure when the MGM Resorts casino opens.
For New York’s tribal gaming interests, the decision announced on Dec. 17, 2014 by the state Facility Location Board was an announcement which portended an existential danger to their business. The case grew darker for the Finger Lakes operations when the New York Gaming Control Board announced in early 2015 it would reopen consideration for a 4th casino license.
Tioga Downs License
Eventually, a second casino was approved for the Southern Tier/Finger Lakes region. Tioga Downs Racetrack won the second round of bidding for a Southern Tier casino in October 2015. Instead of building a new gaming complex, Jeffrey Gural’s Tioga Downs would be converted into a casino with a massive expansion.
Tioga Downs still has not won final approval for their casino development plan. If it is approved, Jeffrey Gural’s company would pay a $20 million licensing fee, similar to the $50 million fees being paid this month.
Other New York Casinos
Two other casinos were licensed in December 2014: one in the Albany region and one in the Catskills. The Albany region casino was the $330 million Rivers Casino being built in Schenectady by Rush Street Gaming.
The Catskills Mountains casino is the Montreign Resort being built in the city of Thompson in Sullivan County.
