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Suffolk OTB picks upstate firm to run planned casino

Suffolk County officials have picked Buffalo-based gaming company Delaware North to develop and manage a planned casino with 1,000 electronic slot machines.

Suffolk Off-Track Betting Corp. officials disclosed the selection Wednesday to federal bankruptcy Judge Carla Craig in Brooklyn, after meeting with creditors Tuesday.

Phil Nolan, Suffolk OTB president, said he hopes to finalize a contract with Delaware North and Innovation Group, a gaming consultant, within a month and that a search for a casino site is underway.

"We've been able to attract leaders in the industry with a great reputation that will help us deliver a first-rate facility for Suffolk County," he said.

Delaware North, a $2.6 billion family-owned company with 55,000 employees, runs gaming operations for several upstate casinos. The company also runs hotels and food services in national parks and at major sports venues, including MetLife Stadium in New Jersey. It also owns the NHL Boston Bruins and the NBA Boston Celtics.

OTB officials said Delaware North has committed to provide $65 million to $70 million in upfront financing for construction of an 80,000-square-foot casino, with bars, restaurants and a big-screen horse-betting area, as well as parking for 1,000 to 1,500 cars. The casino will employ about 200 full- and part-time workers. Officials say they are considering sites in western Suffolk along the Long Island Expressway, Route 110 and Veterans Memorial Highway.

Officials hope the operation will generate millions of dollars in new revenues for the county and schools, beginning next fall. OTB officials said they were unable Wednesday to detail anticipated revenues.

Past forecasts have projected a casino could generate $1 billion in wagers and between $80 million to $100 million in new revenues for the county and schools. The 2014 county budget assumes revenues of $4 million late next year.

"Clearly, this is a large player who knows how to run an operation," said Presiding Officer Wayne Horsley (D-Babylon). "Everyone believes we're going to make a lot of money for the county."

Delaware North was chosen from a field of competitors that included a joint venture of Tanger Outlets' Blumenfeld Development Group in partnership with Rush Gaming in Chicago; Penn National Gaming of Wyomissing, Pa.; Boyd Gaming of Paradise, Nev.; local developer Wilbur Breslin, and Empire City Casino, which operates at Yonkers Race Track.

The State Legislature earlier this year gave Nassau and Suffolk each the right to open separate 1,000-machine slot casinos starting next year.

Nassau County has issued its own request for qualifications for its own slot casino and gotten a half-dozen responses from potential developers, said Joseph Cairo, Nassau OTB president. He said their plan is to use the Race Palace in Plainview, which was engineered and wired a decade ago to accommodate a gambling operation. Cairo said OTB officials will make a decision by mid-December on the feasibility of the Race Palace site.

Delaware North officials see no problems in competition with neighboring Nassau. "The prospects are very high," said Brian Hansberry, Delaware North's president of gaming and entertainment. "Long Island is one of the most densely populated areas in the country. . . . The demographics are rich enough and the market large enough for all of us to achieve our goals."

Delaware North was the original 2008 winner in bidding on the 4,500-slot-machine casino at Aqueduct Race Track, but dropped out amid the Wall Street fiscal meltdown when it could not come up with the $370 million it had proposed as an upfront payment to the state. Later, Delaware North won in another round of bidding for the Aqueduct racino, but later withdrew over concerns about a nonrefundable $300 million upfront payment required by the state even if contract talks fell through.

Nolan expressed confidence that a contract with Delaware North will be finalized quickly. "By all accounts, Delaware comes with a sterling reputation," he said.

With Robert Brodsky

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