Caesars Entertainment Seeks New York License to Build Casino in Woodbury
Caesars Entertainment submitted an application with the New York State Gaming Commission for one of the four available licenses to operate a land-based casino in the state. If approved, Caesars appears ready to build a casino in Woodbury, Orange County. The development would be under the control of David Flaum.
Caesars Entertainment has reached a preliminary agreement for a ground lease in Woodbury, which is located 50 miles north of Manhattan in Orange county, in the Mid-Hudson Region of the Hudson Valley. Its proximity to New York City would make the casino a prime location for New Yorkers wanting to get out of the city for a gamble, while undermining the business of big Connecticut casinos like Foxwoods and Mohegan Sun, as well as any potential New Jersey casinos placed in the northern part of the state (in 2016 or beyond).
Woodbury, New York Casino Project
Caesars Entertainment CEO Gary Loveman praised Woodbury as an ideal location for a New York casino: “Woodbury is already a well-known destination thanks to the world-class shopping at Woodbury Common. The site is ideally suited for the development of a resort casino given its proximity to transportation and other attractions.”
The location in Woodbury spans approximately 121 acres. Caesars Entertainment and David Flaum are finalizing agreements, in which the two parties agree to work together in securing permits and approvals for the development. The next step is for Caesars to secure financing for the project–always an issue with an estimated $22 billion in debt. Financing may come in part from the Caesars Growth Partners, which is a joint venture between Caesars Entertainment and the Caesars Acquisition Company.
If Caesars Growth Partners make the capital investment associated with the project, Caesars Entertainment will act as operator for the project, and share in the management fee.
Flaum Management Company of Rochester
Gary Lovemen went on to praise David Flaum, whose role in the Woodbury development is crucial. Loveman said, “We are delighted to be collaborating with David Flaum, whose vision and experience, will play a crucial role as we work to design and develop a project that fits well with the surrounding community.”
Flaum Management Company is headquartered in Rochester. Flaum’s business has been in operation since 1985. He serves on the board of directors for 45 corporations, including the US LEC Corp. and U.S. Telepacific Corp. For the past 30 years, he has been active in developing retail centers and office buildings throughout the eastern United States. Given Flaum’s experience and connections in the state of New York, Caesars Entertainment could not have found a better partner for the Woodbury project.
David Flaum released his own statement on the announcement, which said, “Our shared goal is to create the most successful project possible to generate a strong and steady stream of funding for our schools and communities.”
Andrew Cuomo Supports Land-Based Gaming
New York Governor Andrew Cuomo has sought to expand gambling in Upstate New York communities, hoping to build the economy in select communities north of New York City. Cuomo has argued the building of casinos would not only help boost the fortunes of several cities in Upstate New York, but would also create new jobs in the state and generate tax revenue for the state government.
The Orange County project could face widespread opposition in the state government, though. When David Flaum bought land in Orange County in March 2014, several state legislators spoke out against a casino project in the area. If Orange County received a casino, the chances of Sullivan County or Ulster County receiving one would be squelched. The question New York City gamblers would ask: why drive further to play in those casinos?
Trouble for Regional Gaming Operations
The same could be said for other casino operations surrounding New York State. At present, 38 U.S. states have brick-and-mortar casino operations, up from only two states in 1988. Bloomberg Businessweek recently reported that land-based casinos across the USA are struggling to remain viable, as the American land casino market gets further saturated. The New York casinos could be a serious blow to casino gaming in nearby Pennsylvania, New Jersey, and Connecticut–which rely on New Yorkers for revenue.
Increasingly, it appears Foxwoods is looking to the Boston gaming market as its future, as it tries to seek a Massachusetts operating license. Meanwhile, Pennsylvania recently reported a yearly decline in slot machine revenues, while the Las Vegas Sands Corp., the largest gaming company in the world, appears ready to sell its Bethlehem, Pennsylvania casino and get out of the Pennsylvania market altogether.