Implications of the upstate NY gaming expansion
- Voters approved Proposal 1
- The proposed amendment to section 9 of article 1 of the Constitution would allow the Legislature to authorize up to seven casinos in New York State for the legislated purposes of promoting job growth, increasing aid to schools, and permitting local governments to lower property taxes through revenues generated.
- 4 casinos in 3 upstate locations: Catskills (2 casinos likely), Albany/Saratoga Springs, Southern Tier near Binghamton
- The location for the other three casino licenses has not yet been determined, but upcoming legislation prohibits the award of a license in New York City for at least 7 years
- 2 slots parlours on Long Island (up to 1,000 VLTs each)
- Legislation allows for two struggling Long Island offtrack betting companies in Nassau and Suffolk to each open slot parlors with as many as 1,000 machines
- Catskills: CZR, Empire Resorts, Mohegan Sun, Foxwoods, Navegante, Louis Capelli, Genting partnership
- Albany/Saratoga Springs: CZR, Saratoga ((VLT expansion into full-scale casinos
- Southern Tier near Binghamton: Tioga Downs (VLT expansion into full-scale casino)
What’s the opportunity?
- 1,000-1,500 slots at 4 casino locations plus up to 1,000 slots at 2 slot parlors, translates into roughly 6,000-8,000 new slots between mid 2015 through 2017
- Slot parlors will be regulated by the NY Lottery and should come online first in mid-2015
- Slot operators will benefit from this expansion, especially Bally’s who will also benefit from the table placements due to the SHFL acquisition. An incremental 1,000 units has about 14 cents of impact on BYI’s EPS. Currently, BYI has north of 50% share in New York and it's likely that the new parlors will be tacked onto the existing agreement for ship share.
What are the obstacles?
- Given that the legislation has passed the NY legislature and the voters have approved the legislation, it will be implemented.
- 5 current NY full-scale casinos operated by Native American tribes
- 9 slot-machine parlors operated by racetracks.
- Atlantic City/Pennsylvania/Connecticut markets
- The next step in the process is for NY State Gaming Commission to form a five-member Facilities Location Board that will decide where casinos go.
- The board cannot be legally seated until the proposal above becomes law on Jan 1, 2014. Once a three-person majority has been named, the Location Board has 90 days to issue a request for applications from potential casino operators.