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What you need to know for 01/17/2018

Mom-and-pop players compete for New York casinos

Mom-and-pop players compete for New York casinos

The contenders vying to build a Las Vegas-style casino in upstate New York include the gambling gian
Mom-and-pop players compete for New York casinos
A view from the main lodge at Howe Caverns is seen on Thursday, May 1, 2014, in Howes Cave, N.Y. A handful of local business owners are vying to build casinos in upstate New York, joining a bidding competition that includes gambling giants like Caesars...

HOWES CAVE — The contenders vying to build a Las Vegas-style casino in upstate New York include the gambling giants you would expect: Caesars Entertainment, Mohegan Sun, Foxwoods. But there are also a few mom-and-pop players that believe they, too, deserve a piece of the action.

Among them is Howe Caverns, a family-owned roadside attraction that bills itself as the Northeast's largest show cave, with boats that take visitors through the natural catacombs 15 stories beneath the earth's surface. Owner Emil Galasso acknowledges he doesn't know much about running a casino but argues local developers like him should get a chance to deliver an economic boost to the places where they live.

"This is an economically depressed area — just what the law was designed for," said Galasso, whose cave about an hour west of Albany in Schoharie County attracts 150,000 visitors annually. "We have 330 acres that are shovel-ready. We're really a diamond in the rough."

A state constitutional amendment passed last year authorizes as many as seven full-scale, non-Indian casinos. The state is starting with four in three upstate regions: the Catskills and mid-Hudson River Valley, the Albany-Saratoga area or the Southern Tier-Finger Lakes region. No more than two casinos may be located in any single region.

Just getting in the running doesn't come cheap — $1 million to cover the cost of background investigations. Some of that money would be returned if a contender drops out or is eliminated.

For Galasso, it's a gamble that's worth it. His vision calls for a "boutique" resort casino near the cave — not inside it — along with a waterpark, an RV park and a "Dinosaur Canyon" filled with lifelike animatronic versions of the scaly beasts. He calls it a perfect fit for an area with an unemployment rate that's 2 percentage points above the state average.

Other homegrown, local business owners in the mix include Wilmorite, a Rochester-based real estate firm, which has plans for a $350 million facility in Tyre. The Walsh family, owners of Traditions at the Glen resort and conference center in Broome County, is pitching a $150 million casino in the Southern Tier-Finger Lakes region.

"We know this community," Bill Walsh said. "We have a great project that would really benefit the area."

Most of those bidding for a license, however, come to the competition with significant casino experience. Saratoga Casino and Raceway and Tioga Downs operate slot parlors and racetracks. Cordish Companies has built large casinos in Maryland, Florida and elsewhere. Caesars operates more than 50 casinos. Genting Group is a Malaysian conglomerate that owns Norwegian Cruise Lines and operates the Resort World Casino New York City at the Aqueduct Racetrack.

"Destination resorts are our specialty," said Christian Goode, senior vice president of Genting Americas.

With their proximity to New York City, the Catskills and mid-Hudson Valley have attracted the most interest, with at least 10 development groups proposing casinos. Bidders for Orange County — just an hour north of the city — include Genting, Caesars, the Saratoga Casino and Raceway, the Cordish Companies and Greenetrack, the owners of an electronic gambling hall in Alabama.

A mix of global gambling giants and mom-and-pop developers isn't unusual, according to William Thompson, a University of Nevada-Las Vegas professor who studies the gambling industry. He said well-heeled local business owners and real estate developers often pitch proposals when a state authorizes new casinos.

But while local contenders may have some built-in goodwill from a community, they often struggle to compete with big companies that have casino experience and — more importantly — deep pockets.

"You get some small operators that will try to sell the mom-and-pop idea, but usually they'll get a place nobody else wants," Thompson said. "This is a business that needs capital, and that's where the smaller operations miss out."

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