July 7, 2016
Tom Precious, Blood-Horse
A recent move by New York legislators to scare off investors in possible future casinos in New Jersey could backfire, according to the operator of Meadowlands Racetrack.
“If anything, it helps the effort in New Jersey,” said Jeff Gural, who runs Meadowlands and is pushing for it to be the location of a full-blown casino, if New Jersey voters this fall legalize up to two casinos for the first time beyond Atlantic City.
The New York Legislature last month adopted a non-binding resolution warning that New York will consider all options, including speeding up its casino development efforts in the downstate area, if New Jersey permits casino development expansion into northern New Jersey in an area close to the border with the Empire State. Legislators at the time said the resolution was not meant to try to influence the November casino referendum in New Jersey, but to serve as a warning to potential New Jersey casino investors that New York could permit expanded casino development in the New York City area. Such a threat, New York officials believe, could make investors see that New Jersey casinos would be less profitable if new casinos were permitted in the larger population of New York City or its suburbs.
“I don’t think anyone would have trouble investing in a casino in the Meadowlands. I’m 100% sure if we get a (casino) license at Meadowlands, we’d have no trouble getting financing,” Gural said.
Besides his operation at Meadowlands, Gural, a Manhattan real estate developer, owns Tioga Downs and Vernon Downs in upstate New York. Both of those tracks have racino operations, and Gural has an application pending with the state Gaming Commission to become the fourth casino license issued to an upstate location since New York voters in 2013 approved up to seven new casinos. A state law from 2013 said possible downstate casinos, such as in New York City or its suburbs, will have to wait seven years in order to give the new upstate casinos time to get on their feet. That law, however, can be changed, and New York lawmakers suggested as much when both the Senate and Assembly adopted the resolution meant to be heard in New Jersey.
“I certainly understand New York’s position, (but) it really doesn’t affect my plans in New Jersey. I think a casino at the Meadowlands would be very successful,” Gural said.
Gural said he expects New York will, at some point, permit Aqueduct Racetrack and Yonkers Racetrack to become full-blown casinos instead of awarding a casino license to a developer, say, in Manhattan.
“I’d be surprised if New York ever legalized casinos in Manhattan, because that would put Yonkers and Aqueduct out of business,” he added.
The two tracks now have “racino operations,” and are restricted to offering betting slot-like video lottery terminals run through the state Lottery Division. The three full casino licenses so far granted in New York—in the southern Catskills near Monticello, in Schenectady, and in Seneca County between Rochester and Syracuse—allow those future casinos to offer real slot machines as well as table games, such as poker.
If casinos are allowed to expand into northern New Jersey and Gural wins one of the licenses, he said he expects much of his business to come from New Jersey residents, who would choose Meadowlands for its convenience and being able to avoid high toll rates to make their way to Aqueduct in Queens or Yonkers in Westchester County. Meadowlands, located in East Rutherford, is one of several sites being eyed for the two licenses that would be available if New Jersey residents approve the casino expansion referendum.
Any move by New York to hurry up the schedule for new casinos downstate would come with costs. The state would have to pay $50 million apiece to three upstate casinos, and slightly less to a fourth, if the legally required seven-year ban on additional casino license awards is broken. A new downstate casino before the seven-year prohibition ends could also dent the finances of the Montreign Resort Casino, the southern Catskills facility under construction about 90 minutes from Manhattan.
“I’m not so sure all you do is pass a law and give everybody back their license fees,” Gural said of the $50 million per casino payment made in New York. He said he’d expect a lawsuit from at least one of the upstate casinos now under construction with the assumption that they’d face no further in-state competition for seven years.
Besides preserving revenues the state gets from its casinos, the New York resolution adopted last month is especially aimed—given their locations—at protecting the financial futures of Aqueduct, Yonkers, and Montreign. Genting Americas runs the Aqueduct casino and has a major share in the Catskills casino that is due to open in 2018. Genting last month praised New York lawmakers “for sending a clear signal that they will stand with us and protect New York revenues and workers.”