SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK

_________________________________________________
In the matter of the application of

Index No:
VERIFIED PETITION

ONEIDA NATION OF NEW YORK, TURNING STONE

RESORT CASINO, LLC, CASINO FREE TYRE, BY
ITS PRESIDENT JAMES DAWLEY, III, DESIREE
DAWLEY, JAMES DAWLEY, III, LYNN BARBUTO,
ROBERT BARBUTO, JONATHAN MORELLI, JANE
MORELLI, ASTRID NEARPASS, JAMES NEARPASS,
LAURA WORDEN, TODD WORDEN, and DAGMAR
NEARPASS,
Petitioners,
v.
NEW YORK STATE GAMING COMMISSION, NEW
YORK STATE GAMING FACILITY LOCATION
BOARD, LAGO RESORT & CASINO, LLC,
WILPAC HOLDINGS, LLC, WILMOT GAMING, LLC,
WILPAC FUNDING, LLC, THOMAS C. WILMOT,
SR., M. BRENT STEVENS, WILMORITE, INC., and
PGP INVESTORS, LLC,
Respondents.
For a Judgment Pursuant to Article 78 of the Civil
Practice Law and Rules.
_________________________________________________
TO: SUPREME COURT OF THE STATE OF NEW YORK FOR THE COUNTY OF
NEW YORK:
The Verified Petition of Oneida Nation of New York, Turning Stone Resort Casino, LLC,
Casino Free Tyre, Dagmar Nearpass, Desiree Dawley, James Dawley, III, Lynn Barbuto, Robert
Barbuto, Jonathan Morelli, Jane Morelli, Astrid Nearpass, James Nearpass, Laura Worden, and
Todd Worden (collectively, Petitioners), for judgment pursuant to Article 78 of the New York

Civil Practice Law and Rules (CPLR), by their attorneys, respectfully alleges and states as
follows:
PRELIMINARY STATEMENT
1.

On June 21, 2013, the New York State legislature passed the Upstate New York

Gaming & Economic Development Act, and on July 30, 2013, the Governor signed the Act into
law. See N.Y. Rac., Pari-Mut. Wag. & Breed. Law 1300 et seq. (Gaming Act).
2.

The Gaming Act has several stated purposes, including to boost economic

development, create thousands of well-paying jobs and provide added revenue to the state,
Gaming Act 1300(5), and to attract non-New York residents and bring downstate New
Yorkers to upstate, Gaming Act 1300(6). The Gaming Act requires consideration of a
proposed casinos impact on the local and regional economy before a license is awarded under
the statute. Gaming Act 1313(1)(l)(3). It also requires an evaluation of applicants ability to
achieve the goal of maximizing revenues received by the state and localities, Gaming Act
1320(1)(b), and an evaluation of applicants estimated recapture rate of gaming-related
spending by residents travelling to an out-of-state gaming facility, Gaming Act 1320(1)(f).
3.

The Gaming Act expressly requires consideration of mitigating potential impacts

on host and nearby municipalities in determining whether to approve an application for a

gaming license. Gaming Act 1320(2)(a).
4.

Notwithstanding the express purposes of the Gaming Act, on December 21, 2015,

Respondent New York State Gaming Commission (the Gaming Commission or

Commission), an agency of the State of New York, awarded a license to Respondent Lago
Resort & Casino LLC (Lago) to operate a commercial casino in the Town of Tyre, New York.
See Ex. 1 (Lago Gaming License Award). By Lagos own admission, the proposed Lago casino

will cannibalize the majority of its business from existing New York gaming facilities, Ex. 2
(Lago Application Executive Summary) at 3, contrary to the Gaming Acts objective to boost
economic development through new (rather than transferred) revenue and to create (rather than
siphon) thousands of new jobs.
5.

Lagos license was the culmination of a two-step selection process that was

riddled with legal errors by the Gaming Commission and the Gaming Facility Location Board
(the Location Board or Board) it appointed. Both bodies failed to fulfill their statutory
duties by ignoring the fact that Lago was not an eligible applicant. Moreover, the Location
Board unlawfully used a subjective qualitative analysis rather than the objective weighting
analysis mandated by the Gaming Act, effectively ignored the Gaming Acts central goal of
recapturing out-of-state spending, made grossly inconsistent findings, and arbitrarily and
capriciously treated similarly situated parties differently. For its part, the Gaming Commission
unlawfully rubber-stamped the Location Boards recommendations, making no factual findings
whatsoever in support of its license award to Lago and refusing to consider the reasonableness
and lawfulness of the Location Boards recommendation.
6.

For the reasons set forth in this petition, the Gaming Commissions grant of a

license to Lago should be nullified.

PETITIONERS
Oneida Nation and Turning Stone
7.

Petitioner Oneida Nation of New York (Oneida Nation or Nation) is a

federally-recognized Indian tribe, see 80 Fed. Reg. 1942, 1945 (2015), with a federallyrecognized tribal government that is located in the State of New York.

8.

Petitioner Turning Stone Resort Casino, LLC (Turning Stone), is a

governmental instrumentality organized by and existing under the laws of the Oneida Nation of
New York, a sovereign Indian nation, with a principal office located in the State of New York.
Turning Stone owns and operates the Turning Stone Resort Casino in Verona, NY.
9.

In 1993, the Nation and the State of New York entered into a gaming Compact

under the authority of the Indian Gaming Regulatory Gaming Act (IGRA), 25 U.S.C. 2701 et
seq. The principal objectives of IGRA and the Compact include promot[ing] tribal economic
development, tribal self-sufficiency, and strong tribal government and protect[ing] the health,
welfare and safety of the citizens of the Nation and the State. 25 U.S.C. 2701; Ex. 3 (NationState Compact Between the Oneida Nation of New York and the State of New York (appendices
omitted)) at 2.
10.

Pursuant to the Compact, the Nation built the Turning Stone Resort Casino at its

own considerable risk and expense.

11.

Since opening in 1993, Turning Stone has been the economic engine of the Nation

and an economic boon to central New York as a whole, with the Nation infusing more than $6
billion in direct spending to support the struggling regional economy. Ex. 4 (Oneida Nation Fact
Sheet) at 2. The success of Turning Stone has been critical to an area hard hit by Air Force base
closures and plant closings.
12.

Turning Stone also is a leading employer in the region, with nearly 4,000

employeesmost of whom are non-Native-American. Ex. 5 (Oneida Nation Economic Impact

Fact Sheet) at 1. Turning Stone paid wages and benefits exceeding $125 million in 2014. Ex. 4
(Oneida Nation Fact Sheet) at 2. In 2014, Nation employees paid $19 million in federal payroll

taxes and $4.3 million in state income taxes, as well as millions of dollars in local sales taxes and
property taxes. Ex. 5 (Oneida Nation Economic Impact Fact Sheet) at 1.
13.

The revenue generated by Turning Stone has allowed the Nation to fund vital

governmental services for Nation memberssuch as a comprehensive health clinic, affordable

housing, education scholarships, tuition assistance programs, cultural education initiatives, and
numerous programs benefitting Nation children and Eldersat a time when many other Native
American tribes are mired in poverty. Ex. 4 (Oneida Nation Fact Sheet) at 2-3.
14.

The Oneida Nation supported passage of the Gaming Act because it has

experienced firsthand how responsible gaming can provide vital financial support for
communities, create good-paying jobs and provide opportunities for young adults to move back
home for career advancement.
15.

The proposed Lago site is just 75 miles away (nine exits on the New York State

Thruway) from the Turning Stone Resort Casino, and only 45 miles from Syracuse, Turning
Stones largest market. Lago will undermine the shared prosperity that both the Nation and the
State have worked so hard to cultivate in central New York, and will have a significant adverse
effect on the Nation and Turning Stone.
16.

Lago itself asserts that its financial model is predicated on cannibalizing the

majority of its business from existing New York gaming facilities such as the Turning Stone
Resort Casino, rather than fulfilling the purpose of the Gaming Act to boost economic
development, create good jobs, provide added revenue to the State, attract non-New York
residents to upstate New York, and bring downstate New Yorkers to upstate. See 127-150,
infra.

17.

The Nations and Turning Stones injuries fall within the zone of interests of the

Gaming Act, which is intended to protect against the cannibalization of revenue from existing instate gaming facilities. See, e.g., Gaming Act 1300(5), 1300(6), 1313 (form of application
must require an examination of economic benefits to the region and the state as well as
impact on the local and regional economy), 1320(1)(b) & (f), 1320(2) (requiring 20% weight
to be given to local impact and siting factors including mitigating potential impacts on host and
nearby municipalities).
Individual Petitioners
18.

Petitioners Desiree Dawley, James Dawley, III, Lynn Barbuto, Robert Barbuto,

Jonathan Morelli, Jane Morelli, Astrid Nearpass, James Nearpass, Laura Worden, Todd Worden,
and Dagmar Nearpass (collectively with Casino Free Tyre, the Individual Petitioners) all live
adjacent to or near the proposed Lago casino site. They have lived in Tyre for hundreds of years
collectively.
19.

By virtue of their close proximity to the Lago site and their direct exposure to its

many resulting environmental, social, and local impacts, the Individual Petitioners will be
harmed in a manner different in kind and degree than the community and public at large as a
result of the construction and operation of Lago.
20.

Petitioners James and Desiree Dawley live in the house they built, largely by their

own hands, on an 18.6 acre lot they own at 1938 Chase Road in Tyre. James Dawley was born
and raised in Tyre.
21.

The Dawleys have owned their property in Tyre for more than 30 years. Their

home is located directly adjacent to and north of the proposed Lago casino site. Because their
property and residence is in close proximity to the Lago site, the Dawleys will experience direct

impacts caused by the casino that are different from those of the public at large, including a
significant increase in traffic in and around their neighborhood, noise from the casinos
construction and operation, dust from construction, nighttime lighting and sky glow, and odors.
22.

The Dawleys fear that the casino will reduce the number of birds and other

wildlife they presently enjoy watching on their property, increase the amount of trash and litter in
and around their property and neighborhood, result in trespassers entering their property,
increase their and their childrens risk for personal injury or bodily harm, destroy or degrade the
scenic views their property currently enjoys, and substantially and permanently alter the
character of their rural and agricultural community.
23.

Construction of the casino already has adversely impacted the Dawleys in the

form of loud noise disturbances and earth-shaking reverberations from heavy construction
machinery, increased traffic congestion near the site, and air pollution from dust kicked up by the
construction.
24.

Petitioners Robert and Lynn Barbuto own and reside in a house at 1843 Chase

Road, which is approximately one-quarter mile north of the proposed casino site. They have
lived in Tyre for over 26 years. The White Brook, which begins on the Lago site, flows over the
Barbutos property.
25.

Lynn Barbuto is a member of the clergy and maintains a chapel and sanctuary on

their property. Construction and operation of the casino will forever destroy the existing peace
and tranquility of their property, her chapel, and her sanctuary.
26.

Because of the close proximity of their property and residence to the Lago site,

the Barbutos will experience direct impacts that are different from those of the public at large,
including noise from the casinos construction and operation, dust from construction, and odors.

27.

The Barbutos fear the casino will light up their nighttime sky, disrupt their sleep,

cause increased traffic, make local roads more dangerous to traverse, destroy or degrade the
scenic views currently enjoyed from their property (although to a lesser extent than prior to the
construction), and substantially and permanently alter the character of their rural and agricultural
community.
28.

Construction of the casino already has adversely impacted the Barbutos in the

form of construction dust and dirt, unpleasant odors such as tar and diesel, noise including
booms from construction equipment, degraded scenic views due to the clearing of trees on the
construction site, increased traffic, and dirty water containing debris and silt running from the
casino site into wetlands on their property.
29.

Petitioners Jonathan and Jane Morelli own the house they have lived in for the

past 43 years at 1077 Route 414 in Tyre. Their home is located directly adjacent to the proposed
Lago casino site to the north, and their residence is located only several hundred feet from the
proposed entrance to the casino complex.
30.

Because their property and residence is in close proximity to the Lago site, the

Morellis will experience direct harms that are different from those of the public at large,
including a significant increase in traffic in and around their neighborhood, noise from the
casinos construction and operation, dust from construction, and odors.
31.

The Morellis fear that the casino will contaminate their groundwater and drinking

water via runoff from the nearby stormwater management facility, impair their safety as they
walk on the road in front of their house, increase crime in the area, destroy or degrade the scenic
views their property currently enjoys, and substantially and permanently alter the character of
their rural and agricultural community.

32.

Petitioners James and Astrid Nearpass live in the retirement home they own at

1987 Chase Road in Tyre. Now 81 years old, James Nearpass was born and raised in Tyre.
James and Astrid farmed for several decades in Tyre and Junius (just over two miles from the
proposed casino site). Their current home is directly adjacent to the proposed Lago casino site.
33.

Because of the close proximity of their property and residence to the Lago site,

the Nearpasses would experience direct harms caused by the casino that are different from those
of the public at large, including a significant increase in traffic in and around their neighborhood,
noise from the casinos construction and operation, dust from construction, nighttime lighting
and sky glow, and odors.
34.

The Nearpasses fear that the casino will increase crime in the area, destroy or

degrade the scenic views from their property, and substantially and permanently alter the
character of their rural and agricultural community.
35.

Petitioners Todd and Laura Worden own two houses on Chase Road in Tyre,

including their personal residence on 1891 Chase Road. Todd Worden was born and raised in
Tyre. The Wordens home is in close proximity to the proposed Lago casino site, approximately
one-quarter of a mile away.
36.

Because their property and residence is in close proximity to the Lago site, the

Wordens will experience direct harms caused by the casino that are different from those of the
public at large, including a significant increase in traffic in and around their neighborhood, noise
from the casinos construction and operation, dust from construction, nighttime lighting and sky
glow, and odors.

37.

The Wordens fear that the casino will increase crime in the area, destroy or

degrade the scenic views from their property, and substantially and permanently alter the
character of their rural and agricultural community.
38.

Construction at the Lago site has already negatively impacted the Wordens. Their

home has been covered by dust, dirt, and other pollutants resulting from construction activities at
the Lago site.
39.

Further, the Wordens enjoy spending time in the outdoors, but air pollution from

the casino has significantly curtailed their ability to go outside on their property for extended
periods of time, and they have had to install room darkening shades in anticipation of the casino
lights that will shine into their expected daughters bedroom.
40.

Petitioner Dagmar Nearpass lives at and owns a life estate in 765 Black Brook

Road in the Town of Tyre, County of Seneca. Ms. Nearpasss home is located in close proximity
to the proposed Lago casino site, approximately 1.2 miles away. The White Brook, which
begins on the Lago site, flows over Ms. Nearpasss property.
41.

Because her residence is in close proximity to the Lago site, Ms. Nearpass will

experience direct harms that are different from those of the public at large, including a significant
increase in traffic in and around her neighborhood, noise from the casinos construction and
operation, dust from construction, nighttime lighting and sky glow, and odors.
42.

Ms. Nearpass fears that the casino will contribute to flooding on her property as a

result of stormwater runoff from the site into the White Brook, contaminate her groundwater and
drinking water, destroy or degrade the scenic views from her property, and substantially and
permanently alter the character of her rural and agricultural community.

10

43.

Petitioner Casino Free Tyre, suing by its president, James Dawley, III, is an

unincorporated association with approximately 40 of its active members residing in Tyre, New
York. Petitioners Dagmar Nearpass, Desiree Dawley, and James Dawley are members and
officers of Casino Free Tyre authorized to commence this action on Casino Free Tyres behalf
pursuant to General Associations Law Section 12. Formed in response to Lagos proposal to site
its destination casino and resort in Tyre, Casino Free Tyre has an interest in safeguarding the
natural resources and community character of Tyre.
44.

The Town of Tyre describes itself as a place of homes, fields, marshes, and

geese that strives to maintain its rural flavor as the world passes by along the NYS Thruway.
Ex. 6 (Tyre Town Web Site). Its entire population totals approximately 950 residents.
45.

Lagos proposed casino site sits within a County-adopted, State-certified

Agricultural District. Ex. 7 (Seneca County Agricultural District Map). Prior to Lagos clearing
and grading work, the site consisted of approximately 45 acres of active prime agricultural land,
10 acres of wetlands, and 30 acres of woodlands. Ex. 8 (2014 EAF Part 1) at 9.
46.

Lago seeks to build a massive destination-resort of more than 730,000 square feet,

Ex. 9 (2015 SEQRA Statement of Reasons Excerpt) at 1,1 that its DirectorTom Wilmot
proclaims will be comparable to what you will see in Las Vegas. Ex. 10 (Teri Weaver,
Wilmot: Digging to begin on Lago casino site on Friday, Syracuse.com (Dec. 18, 2014)) at 1.
Lago claims its sprawling complex will attract approximately 3.3 million visitors per year to
Tyre, Ex. 11 (Lago Application Exhibit VIII.C.4.c), or approximately 9,000 vehicle trips per day,
Ex. 12 (Traffic Impact Study Excerpt) at 21.
1

The full 2015 SEQRA Statement of Reasons is available at

http://www.tyreny.com/pdfs/laws/2015_resolution__Making_determination_of_significance_with_Completed_Full_EAF_with_written_summary.p
df.
11

47.

The Individual Petitioners and their injuries fall within the zone of interests of the

Gaming Act, as the Gaming Act expressly provides that local impacts must be considered in the
casino evaluation process. See, e.g., Gaming Act 1300(8) (Local impact of the casino sites
will be considered in the casino evaluation process.), 1313(1)(l)(2) (requiring form of
application to include studies and reports regarding, inter alia, local and regional social,
environmental, traffic and infrastructure impacts), 1320(2) (requiring 20% weight to local
impact and siting factors when applicants are evaluated).
48.

By virtue of their close physical proximity to the proposed casino site, the

Individual Petitioners also have standing to assert claims that the license award violates the State
Environmental Quality Review Act (SEQRA) and is invalid as a result of Lagos noncompliance with SEQRA.
RESPONDENTS
49.

Respondent New York State Gaming Commission is a body or officer within

the meaning of CPLR 7802(a). Upon information and belief, the Gaming Commissions office
and principal place of business is located at One Broadway Center, Schenectady, New York,
12305.
50.

Respondent New York State Gaming Facility Location Board is a body or

officer within the meaning of CPLR 7802(a). Upon information and belief, the Location
Boards office and principal place of business is located at One Broadway Center, Schenectady,
New York, 12305.
51.

Upon information and belief, Respondent Lago Resort & Casino, LLC is a foreign

limited liability company, organized under the laws of the State of Delaware, that is registered to

12

do business in the State of New York, with a principal office at 1265 Scottsville Road,
Rochester, New York 14624.
52.

Upon information and belief, Respondent Wilpac Holdings, LLC, is a foreign

limited liability company, organized under the laws of the State of Delaware, that is registered to
do business in the State of New York, and that owns a 100% interest in Lago.
53.

Upon information and belief, Respondent Wilmot Gaming, LLC, is a foreign

limited liability company, organized under the laws of the State of Delaware, that is registered to
do business in the State of New York, with a principal office at 1265 Scottsville Road,
Rochester, New York 14624, and that owns a 50% interest in Wilpac Holdings, LLC.
54.

Upon information and belief, Respondent Wilpac Funding, LLC is a foreign

limited liability company, organized under the laws of the State of Delaware, and that owns a
50% interest in Wilpac Holdings, LLC.
55.

Upon information and belief, Respondent Thomas C. Wilmot, Sr. has a

controlling interest in Wilmot Gaming, LLC.

56.

Upon information and belief, Respondent M. Brent Stevens has a controlling

interest in Wilpac Funding, LLC.

57.

Upon information and belief, Respondent Wilmorite, Inc. is a domestic limited

liability company, organized under the laws of the State of New York, with a principal office at
1265 Scottsville Road, Rochester, New York 14624, and that has an ownership interest in
Wilpac Holdings, LLC.
58.

Upon information and belief, Respondent PGP Investors, LLC, d/b/a Peninsula

Pacific, is a foreign limited liability company, organized under the laws of the State of Delaware,

13

with a principal office at 10250 Constellation Blvd., Suite 2230, Los Angeles, CA 90067, and
that has an ownership interest in Wilpac Holdings, LLC.
JURISDICTION AND VENUE
59.

This Court has jurisdiction over this matter pursuant to Article 78 of the New

York CPLR because the Gaming Commissions license award to Lago was affected by an error
of law, was made in violation of lawful procedure, was arbitrary and capricious, lacked a rational
basis, and was an abuse of discretion.
60.

Pursuant to CPLR 506(b) and 7804(b), venue is proper in New York County

because the Gaming Commission made the determination complained ofthe award of a
gaming facility license to Lagoin the First Judicial District, which includes New York County.
STATEMENT OF FACTS
A.

The Gaming Acts Objectives and the Roles of the Location Board and
Gaming Commission Thereunder.

61.

The purposes of the Gaming Act include boost[ing] economic development,

creat[ing] thousands of well-paying jobs, provid[ing] added revenue to the state, and
attract[ing] non-New York residents and bring[ing] downstate New Yorkers to upstate.
Gaming Act 1300(5), (6).
62.

To accomplish those objectives, the Gaming Act authorizes up to four new

destination casinos in three specified regions in upstate New York, with no more than two
casinos in any one region. Gaming Act 1311(1). The three regions are Region 1
(Catskill/Hudson Valley), Region 2 (Capital Region), and Region 5 (Eastern Southern
Tier/Finger Lakes). Id.; see also id. 1310(2)(b).
63.

Pursuant to the Gaming Act, the Gaming Commission formed the Location Board

and selected its members. See N.Y. Rac., Pari-Mut. Wag. & Breed. Law 109-a.

14

64.

The Location Boards role was limited to soliciting and reviewing applications

and recommending up to four applicants to apply to the Gaming Commission for a license.
Gaming Act 1306.
65.

In making its recommendations, the Gaming Act mandated that the Location

Board shall consider enumerated statutory selection criteria and apply a statutory weighting
scheme with respect to three general categories of selection factors: economic activity and
business development factors (70%); local impact and siting factors (20%); and workforce
enhancement factors (10%). Gaming Act 1320. Within each general category of factors, the
Location Board was required to consider a number of specified statutory factors and issue a
finding of how each applicant proposes to advance the enumerated statutory objectives. Id.
66.

The Location Board did not have the power to grant gaming licenses; that power

belongs only to the Gaming Commission. Gaming Act 1311(1); see id. 1305(3) (recognizing
Gaming Commissions power to approve or disapprove license applications).
67.

The factual allegations that follow trace the relevant events at each stage of the

process from Lagos application to the Gaming Commissions award.

B.
68.

Lagos Application to the Location Board.

On March 31, 2014, the Location Board issued a Request for Applications

(RFA) to develop and operate the upstate destination resort casinos authorized by the Gaming
Act. See Ex. 13 (Board Report Excerpt) at 4.2 The Location Board established June 30, 2014 as
the application deadline. Id.
69.

The Gaming Act mandates full and accurate disclosure. It provides that the

Commission shall deny a license, subject to notice and an opportunity to be heard, when an
2

The full Board Report is available at

http://www.gaming.ny.gov/pdf/02.27.15.GFLBFinalAppendicesWebSmall.pdf.
15

applicant fails to provide information, documentation and assurances required by this article or
requested by the commission or to reveal any fact material to qualification, or when an
applicant provides information which is untrue or misleading as to a material fact pertaining to
the qualification criteria. Gaming Act 1318(1)(b) (emphasis added).
70.

The Gaming Act also required the Location Board to establish deadlines for the

receipt of all applications and provided that [a]pplications received after the deadline shall not
be reviewed by the board. Gaming Act 1312(4).
71.

On June 30, 2014, the Location Board received seventeen applications. Ex. 13

(Board Report Excerpt) at 4. On August 7, 2014, following a unanimous vote, the Location
Board declined to review one application because it was substantially non-responsive to the
RFA. Id. The Location Board concluded that [i]t is simply not feasible or fair to alter any
provision of the RFA or make concessions at the request of a bidder. To do so would create an
unfair bidding process for every other potential bidder and invalidate the RFA. Ex. 14
(Disqualification of Florida Acquisition Corporation) at 1 (emphasis added).
72.

The Gaming Act and RFA set forth several requirements that Lago needed to

satisfy in connection with its application.

1.
73.

The Requirement that Lago Demonstrate Local Support as a

Condition of Filing an Application.

The Gaming Act required that, [a]s a condition of filing, each potential license

applicant must demonstrate to the boards satisfaction that local support has been demonstrated.
Gaming Act 1314(2).
74.

Similarly, 9 N.Y.C.R.R. 5301.1(g) provides that an applicant shall . . .

demonstrate local support by submitting to the Gaming Facility Location Board a resolution

16

passed after a date announced by such board by a majority of the membership of the local
legislative body of the host community supporting the application. Id.
75.

Section IX.A.1.a of the Location Boards RFA required that, as a condition of

acceptance of this Application, local support must be demonstrated through a post-November

5, 2013 vote of the local legislative body of each Host Municipality. Ex. 15 (RFA) IX.A.1, at
58 (emphasis added).
76.

The Location Boards June 10, 2014 Questions and Answers for Applicants made

clear that a condition of filing an Application is that each Applicant submit to the Board a postNovember 5, 2013 resolution passed by the local legislative body of the Host Municipality that
supports the Applicants proposed Gaming Facility within their jurisdiction. Ex. 66
(Resolutions of Support Q&A) at 1, Question 208 (emphasis added).
77.

To satisfy the requirement that it demonstrate local support, Lagos application

relied on a June 12, 2014 resolution of support from the Town of Tyre. Ex. 16 (Lago
Application Exhibit IX.A.1.a); Ex. 18 (Town of Tyre Lago Resolution of Support).
2.
78.

The Requirement that Lago Include a Mitigation Commitment as

Part of its Application.

Under the Gaming Act, Lago also was required to clearly state[] as part of an

application how it will mitigate potential impacts on its host municipality and commit to a
community mitigation plan for the host municipality. Gaming Act 1316(5), (6), (7) (emphasis
added).
79.

Similarly, the governing regulations required Lago to provide plans for

mitigating potential impacts on host municipality and nearby municipalities that might result
from the development or operation of the gaming facility. 9 N.Y.C.R.R. 5301.1(g)(3).

17

80.

Likewise, the RFA required Lago to [s]ubmit . . . a description of Applicants

commitments to mitigate impacts of the proposed Gaming Facility (during construction and
operation) on each Host Municipality and the nearby municipalities including for traffic
mitigation, infrastructure costs, costs of increased emergency services and the other impacts
identified in the [required] studies and [p]rovide copies of any contracts, agreements or other
understandings evidencing such mitigation commitments. Ex. 15 (RFA) IX.A.3, at 59
(emphasis added).
81.

To make the required mitigation showing, Lago relied exclusively on the terms of

a June 12, 2014 Host Community Agreement with the Town of Tyre; that agreement was the
only mitigation plan submitted by Lago in its application. See Ex. 17 (Lago Application Exhibit
IX.A.3).
3.
82.

Lagos Obligation to Disclose Pending Litigation.

Lago also was required to disclose any pending litigation involving Lago to the

Location Board and Gaming Commission and to update that disclosure (as with all disclosures)
with new material information. 9 N.Y.C.R.R. 5301.1(c)(5)(i); id. 5301.1(l)(1).
83.

The Location Board emphasized the importance of providing information about

lawsuits in its Questions and Answers: [t]he Board may consider pending or threatened
litigation in its siting evaluation. Once the Board selects an applicant to present to the
Commission for licensure, the Commission may consider pending or threatened litigation in its
suitability determination. Ex. 19 (Round 1 Q&A Excerpt) at 48, Question 167.3
84.

On June 12, 2014, approximately three weeks before Lago submitted its

application, the Town of Tyre issued a negative declaration under SEQRA, declaring that Lago
3

The full Round 1 Q&A document is available at

https://gaming.ny.gov/pdf/FirstRoundQuestionsAnswersApril232014.pdf.
18

would not cause any significant adverse impact to the environment. Ex. 20 (June 2014 Negative
Declaration) at 4.
85.

On or about July 11, 2014, shortly after Lago filed its application with the

Location Board, Lago was served with an Article 78 petition challenging that negative
declaration under SEQRA. Ex. 21 (Verified Petition, Dawley v. Whitetail 414, LLC, Index No.
48435 (Sup. Ct., Seneca Cnty. July 11, 2014)).
86.

The governing regulations concerning applications for a casino license provide

that, [u]pon completion of an application prescribed in [this regulation] and prior to the award
of a gaming facility license, an applicant has a continuing duty to disclose to the New York
Gaming Facility Location Board promptly, in writing (and electronically), any changes or
updates to the information submitted in the application or any related materials submitted in
connection therewith. 9 N.Y.C.R.R. 5301.1(l)(1) (emphasis added).
87.

The Location Boards RFA likewise provided that [a]fter the submission of an

Application and prior to the award of the Licenses, each Applicant has a continuing duty to
disclose to the Board promptly, in writing (and electronically), any changes or updates to the
information submitted in its Application or any related materials submitted in connection
therewith. Ex. 15 (RFA) III.I, at 16. The supplemental RFA for Region 5 applications
reiterated the importance of updating applications: [a]s a general rule, it is better to err on the
side of over-reporting changes than to fail to report a change. Ex. 22 (Region 5 RFA Excerpt)
at 17.4
88.

Lago does not appear to have updated its application to disclose the SEQRA

lawsuit to the Location Board.

4

The full Region 5 RFA is available at https://gaming.ny.gov/pdf/03.23.15.RFA.PDF.

19

89.

The SEQRA lawsuit raised issues of significance to the Gaming Commission and

Location Boards consideration of Lagos application for a gaming license.

90.

As the Location Board Chair said when announcing its recommendations at a

December 17, 2014 press conference, SEQRA was very important because it goes to the
speed to market. Because theres one thing any developer will tell you that will slow down the
development process for any type of project, its getting snagged in the SEQRA process. Aff.
of Edward C. Barnidge in Supp. of Mem. (Barnidge Aff.) 5.
91.

Satisfying SEQRA is a precondition for an applicant to obtain a gaming license.

See Ex. 23 (Applicant Conference Q&A) at 4, Question 339.

92.

The Gaming Commission stated in writing that it expected that each applicant

would complete an environmental impact statement, which Lago did not do because of the
negative declaration issued by the Town of Tyre. See Ex. 24 (Gaming Commission SEQR EIS
Guidance) at 1.
93.

The Location Boards treatment of other applicants that disclosed pending

litigation highlights the significance of Lagos failure to disclose the SEQRA action to the
Location Board. With respect to three applications that the Location Board rejected, the Board
cited litigation risk as a serious concern. See Ex. 13 (Board Report Excerpt) at 18, 23-24, 27
(Caesars, Sterling Forest, and Capital View). In two instances, the litigation about which the
Location Board expressed concern involved environmental issues. See id. at 23 (expressing
concern that the potential litigation risk over environmental issues would jeopardize the
realization of the project); id. at 27 ([T]he Board notes that due to legal and environmental
challenges there might have been delays in this timeline.).

20

94.

In evaluating applicants, the Location Board expressly relied on the

commitments, assurances, representations, and other statements the Applicants made in their
applications, any updates thereto, and their public presentations. Ex. 13 (Board Report Excerpt)
Disclaimer.
4.
95.

Lagos Nondisclosure of IDA Benefits to the Location Board.

Based on the information publicly disclosed by the Location Board, it appears that

Lago also failed to inform the Location Board that it would seek millions of dollars of tax relief
from the Seneca County Industrial Development Agency (Seneca IDA).
96.

Lagos application to the Location Board made no reference to Lagos intention to

seek IDA benefits.

97.

A Host Community Agreement that Lago submitted as an attachment to its

application merely recited that Lago may, in its discretion, apply to the [IDA] for a tax
agreement with respect to the Project. Ex. 17 (Lago Application Exhibit IX.A.3) at 12
(emphasis added).
98.

On October 2, 2014, Lago filed an application with the Seneca IDA to obtain

sizeable tax breaks in connection with the proposed casino. Ex. 25 (Lago 2014 IDA
Application).
99.

Lago apparently did not inform the Location Board of either its October 2014

application to the Seneca IDA for tax relief or the Seneca IDAs February 2015 award of such
relief to Lago.5

Although the February 2014 resolution awarding those benefits was later nullified, Lago
subsequently re-applied to the Seneca IDA for the same benefits, Ex. 26 (Lago 2015 IDA
Application), which were re-approved in December 2015, Ex. 27 (December 2015 Lago IDA
Award).
21

100.

Lago admits that the sales tax and mortgage recording tax abatements that it

received from the Seneca IDA are worth approximately $20 million. See Ex. 25 (Lago 2014
IDA Application) at 2; Ex. 26 (Lago 2015 IDA Application) at 2.
101.

Lago knew that the Location Board would look critically at any tax breaks it

102.

The governing regulation required applicants to provide significant evidence of

sought.

the economic benefit their proposed casino would bring to the State. 9 N.Y.C.R.R. 5301.1(d).
103.

The Location Board explained in its Questions and Answers for Applicants that a

factor for the graded RFA evaluation is economic impact and a subsidized application will likely
illustrate diminished economic impacts when competitively evaluated. Ex. 19 (Round 1 Q&A
Excerpt) at 39, Question 139(b) (emphasis added).
104.

The application completed by Lago expressly required applicants under penalty of

perjury to disclose any financing contingencies. Ex. 15 (RFA) VIII.A.6.b, at 37; id. at 76.
5.
105.

Lagos Inconsistent Representations Concerning the Status of Its

Financing.

Lago made contradictory representations to the Location Board and to the IDA on

a critical issue: the status of its financing.

106.

Lago categorically represented to the Location Board in its June 2014 application

that 100 percent of financing for construction and operations [is] fully in place. Ex. 2 (Lago
Application Executive Summary) at 2 (emphasis added). In a presentation to the Location Board
on September 8, 2014, Lago again represented that its financing was secured. Ex. 28 (Lago
PowerPoint Presentation to Location Board Excerpt (Sept. 8, 2014)) at 6, 17.6

The full presentation is available at https://gaming.ny.gov/media/LAGO9.8presentation.mp4.

22

107.

Those representations were important, as a significant selection factor under the

Gaming Act was demonstrating the ability to fully finance the gaming facility. Gaming Act
1320(h). Indeed, the Board Report raised concerns about proposed financing with respect to a
number of applicants that were not recommended by the Location Board, including Mohegan
Sun, Nevele, Grand Hudson, Howe Caverns, and Tioga Downs. Ex. 13 (Board Report Excerpt)
at 15, 17, 19, 30, 34.
108.

Contrary to Lagos representations to the Location Board, Lago had been actively

planning for several months prior to its casino application to secure a PILOT agreement from the
Seneca County IDA. See Ex. 29 (Email from Shawn Griffin to Ron McGreevy, et al., dated
February 12, 2014); Ex. 30 (Email from Shawn Griffin to Ron McGreevy, et al., (Apr. 22,
2014)); Ex. 31 (Email from Towns outside counsel, Virginia Robbins, to Shawn Griffin (Feb.
14, 2014)); Ex. 32 (Meeting Agenda for Wilmot Casino and Resort (Mar. 3, 2014)) (agenda for
Town meeting regarding IDA benefits); Ex. 33 (Email from Virginia Robbins to Shawn Griffin,
et al., (Apr. 17, 2014)) (asking whether developer funding for sewer improvements and upgrades
would supplement the PILOT payments).
109.

Directly contrary to its representations to the Location Board, Lago claimed in its

October 2014 application to the Seneca IDA that an IDA Tax Agreement is a critical path item
for financing. Ex. 25 (Lago 2014 IDA Application) at 8 (emphasis added). And a Lago
representative asserted that [n]ot getting the incentives would change the structure of what we
build. Ex. 34 (David L. Shaw, Casino Foes Blast IDA Aid Package, Finger Lakes Times (Jan.
30, 2015)) (emphasis added).
110.

Lago apparently never updated its Location Board application to correct its

representation to the Location Board that its financing was fully in place.

23

C.

The Location Boards Recommendation of Lago.

111.

On December 17, 2014, the Location Board recommend three proposed casinos

Lago in Tyre, New York (Region 5), Rivers Casino & Resort at Mohawk Harbor (Rivers) in
Schenectady, New York (Region 2), and Montreign Resort Casino (Montreign) in Thompson,
New York (Region 1)to apply to the Gaming Commission for gaming facility licenses. See
Ex. 35 (Location Board Decision) at 8.
112.

On February 27, 2015, the Location Board issued a report that explains the

reasons for the Location Boards recommendations (Board Report). The Board Report was
prepared by Gaming Commission staff, see Ex. 13 (Board Report Excerpt), Disclaimer, but
was adopted by the Location Board at a February 27, 2015 meeting, Ex. 36 (Location Board
Meeting Transcript (Feb. 27, 2015)) at 2-3. The Board Report shows that the Location Boards
analysis was contrary to law in numerous respects.
1.
113.

The Location Board Violated Its Statutory Duty to Weight Its

Analysis of Specified Factors.

The Location Board failed to undertake the quantitative weighting of statutory

selection criteria that the State legislature mandated in the Gaming Act. The Location Board
lacked any discretion to ignore the statutorily mandated system for analyzing applicants.
114.

Section 1320 of the Gaming Act is absolute in its mandate: the Location Boards

siting decisions shall be weighted by 70% for economic activity and business development
factors, 20% for local impact and siting factors, and 10% for workforce enhancement factors.
Gaming Act 1320 (emphasis added).
115.

Consistent with its statutory mandate, the Location Board assured the public in

writing that it would score applicants based on the statutorily mandated factors. See Ex. 37
(Round 2 Q&A Excerpt) at 11, Question 370(c) (answering Yes to the question whether the

24

Boards analysis and scoring of the factors included within the evaluation Criteria [will] be
made public (emphasis added)); id. at 18, Question 384 (asserting that [a]pplicants will be
scored based upon the total revenue generated by the gaming operation).7
116.

The Location Boards March 2014 RFA also stated that the Location Board would

apply the required statutory weighting. See Ex. 15 (RFA) VII.A, at 30 (The decision by the
Board to select an Applicant shall be weighted by seventy (70) percent based on economic
activity and business development factors . . . .); id. VII.B, at 31 (The decision by the Board
to select an Applicant shall be weighted by twenty (20) percent based on local impact and siting
factors . . . .); id. II.C, at 31 (The decision by the Board to select an Applicant shall be
weighted by ten (10) percent based on workforce enhancement factors . . . .).
117.

In its Board Report supporting its final recommendations, however, the Location

Board reversed its position and asserted that it had opted not to score applicants pursuant to the
statutory criteria.
118.

The Location Board asserted that it did not create numerical scores with regard

to the [statutory] criteria but elected instead to reach[] its conclusions based on a qualitative
judgment, giving a qualitative weight to categories of factors. Ex. 13 (Board Report Excerpt)
at 8-9.
119.

The Board Report does not weight the statutory categories of enumerated factors

pursuant to the Gaming Acts 70/20/10 weighting scheme. Instead, it contains only narrative,
purely subjective explanations for the Location Boards recommendations and appears to treat
each selection factor equally, in violation of the Gaming Act.

The full Round 2 Q&A document is available at

https://gaming.ny.gov/pdf/SecondRoundQuestionsandAnswersMay142014.pdf.
25

120.

The Location Boards decision to rely exclusively on its own self-created

qualitative evaluation of applicants, rather than adhering to the specified quantitative weighting
approved by the Legislature in adopting the Gaming Act, violated the law.
121.

Notwithstanding this fundamental flaw in the selection process, the Gaming

Commission awarded a license to Lago.

2.
122.

The Location Board Rendered the Gaming Acts Recapture Factor a

Nullity.

The Gaming Act makes clear that one of its primary purposes is to recapture . . .

gaming-related spending by residents travelling to . . . out-of-state gaming facilit[ies]. Gaming

Act 1320(1)(f); see also id. 1300(6) (four upstate casinos will attract non-New York
residents). It provides that the Location Board shall evaluate and issue a finding concerning
how each applicant proposes to advance that central statutory objective. Id. 1320.
123.

The Location Board effectively wrote the critical recapture selection criterion

out of the Gaming Act by asserting in the Board Report, in almost identical language, that every
applicant anticipated a substantial recapture rate.8 Because the Location Board made the same
cursory finding almost verbatim with respect to every applicant, it effectively made no
findings on this enumerated selection factor, in plain violation of the Gaming Act.
124.

The Location Boards assertion that every applicant anticipated a substantial

recapture rate was plainly incorrect. Different applicants projected very different recapture rates,
8

See Ex. 13 (Board Report Excerpt) at 15 (Mohegan Sun at The Concord) (substantial recapture
rate); id. at 17 (Nevele Resort, Casino & Spa) (same); id. at 18 (Caesars New York) (same); id.
at 19 (The Grand Hudson Resort & Casino) (same); id. at 21 (Hudson Valley Casino & Resort)
(same); id. at 22 (The Live! Hotel and Casino New York) (same); id. at 23 (Resorts World
Hudson Valley) (same); id. at 24 (Sterling Forest Resort) (same); id. at 25 (Rivers) (same); id. at
27 (Capital View Casino & Resort) (same); id. at 29 (Hard Rock Rensselaer) (same); id. at 30
(Howe Caverns Resort & Casino) (same); id. at 32 (Lago) (same); id. at 34 (Tioga Downs
Casino, Racing & Entertainment (same); id. at 35 (Traditions Resort & Casino) (same); id. at 13
(Montreign) (recapture of a substantial amount of out-of-state gaming revenues).
26

and two applicants projected that the majority of their revenue would be recaptured from out-ofstate gaming facilities: Live! Hotel and Casino New York (projected to recapture $362.8 million
of $662 million in total revenue) and Capital View Casino & Resort (projected to recapture
$129.1 million of $227 million in total gaming revenue). See Ex. 13 (Board Report Excerpt) at
22, 27, 111, and 216.
125.

In contrast, Lago projected a very low recapture rate of 14% from out-of-state

gaming facilities. Ex. 2 (Lago Application Executive Summary) at 3. The Location Board
completely failed to address the important differences among applicants with respect to
recapturing revenue from out of state and failed to make any genuine findings on this critical
statutory selection factor, in violation of the requirements of section 1320 of the Gaming Act.
126.

Notwithstanding this fundamental flaw in the selection process, the Gaming

Commission awarded a license to Lago.

3.
127.

The Location Board Applied a Completely Different Standard to

Lago on the Issue of Cannibalization.

Consistent with the Gaming Acts objectives, the Location Boards RFA required

each applicant to describe how it planned to succeed . . . while limiting the impact on revenues
at other New York gaming establishments. Ex. 15 (RFA) VIII.B.8, at 44 (emphasis added).
128.

The Location Board stressed the importance of applicants generating new

revenue, as opposed to merely redistributing existing revenue, in its Questions and Answers for
applicants: The language that is quoted from the RFA is clear that what is required of the
Applicant is to describe how it intends to expand the relevant market by bringing in new
visitors, as opposed to merely shifting visitors from existing gaming venues in the region.
Ex. 19 (Round 1 Q&A Excerpt) at 49-50, Question 173 (emphasis added).

27

129.

During the RFA process, six parties filed applications to site a casino in Orange

County, within Region 1 (the Catskill/Hudson Valley). Ex. 13 (Board Report Excerpt) at 5.
Each Orange County applicant paid the State a $1 million application fee.
130.

Pursuant to the stated goals of the Gaming Act, the Location Board summarily

rejected all applicants from Orange County in Region 1 based on the objective of preventing
destructive competition of existing gaming facilities in downstate New York and a proposed
casino in Sullivan County. Ex. 13 (Board Report Excerpt) at 14.
131.

As justification for the categorical exclusion of all Orange County applicants, the

Location Board relied upon its concern that the Orange County applicants would cannibalize
revenue from downstate non-Native American gaming facilities located outside of Region 1. See
Ex. 13 (Board Report Excerpt) at 14 ([B]ecause of the proximity to New York City of the
Orange County proposals, each resulted in a high level of cannibalization of existing downstate
gaming facilities.). The Location Board also rejected all Orange County applicants because
they would destabilize a future casino recommended by the Board for the Catskill region,
explaining that review of various internal modeling scenarios found an additional facility in
Orange County or a second facility in Sullivan County could destabilize that single project in the
traditional Catskill area. Id.
132.

The Location Board categorically rejected all Orange County applicants based on

concerns about cannibalization, even though those applicants promised to generate significantly
higher revenues and job creation, and to recapture more out-of-state spending, than the applicant
that ultimately won the only Region 1 license, Montreign.

28

133.

Montreign was projected to generate only $301.6 million in gaming revenue and

$103.4 million in tax revenue. Ex. 13 (Board Report Excerpt) at 12. By contrast, all of the
Orange County applicants projected to generate far superior revenue figures:
a.

Caesars projected to generate $738 million in gaming revenue and $188.7

million in tax revenue;

b.

Grand Hudson projected to generate $568.9 million in gaming revenue

and $172.6 million in tax revenue;

c.

Hudson Valley projected to generate $559 million in gaming revenue and

$137.1 million in tax revenue;

d.

Live! projected to generate $662 million in gaming revenue and $149.9

million in tax revenue;

e.

Resorts World projected to generate $758 million in gaming revenue and

$201.4 million in tax revenue; and

f.

Sterling Forest projected to generate $1.133 billion in gaming revenue and

$264.1 million in tax revenue.

Id. at 18, 19, 21, 22, 23 & 24.

134.

The expected job creation at Montreign (1,209 full time and 96 part time jobs), id.

at 12, also was dwarfed by each of the Orange County casinos:

a.

Caesars projected to generate 2,129 full time and 703 part time jobs;

b.

Grand Hudson projected to generate 2,310 full time and 269 part time
jobs;

c.

Hudson Valley projected to generate 2,412 full time and 530 part time
jobs;

d.

Live! projected to generate 3,264 full time and 1,444 part time jobs;

e.

Resorts World projected to generate 2,662 full time and 765 part time
jobs; and

f.

Sterling Forest projected to generate 3,129 full time and 1,614 part time
jobs.

29

Id. at 18, 19, 21, 22, 23 & 24.

135.

The Orange County casinos also were far better positioned to recapture spending

from out-of-state casinos than Montreign; two Orange County applicants projected recapturing
hundreds of millions of dollars in revenue from New York residents currently leaving the State
to gamble. Id. at 111 (Live!) & 198 (Sterling Forest).
136.

Notwithstanding the vastly superior economic impact that the proposed Orange

County casinos would have created, the Location Board nevertheless summarily rejected those
Orange County-based applications because of the high level of cannibalization of existing
downstate gaming facilities and the legitimate concern that Orange County casinos could
destabilize that single project in the traditional Catskill area. Ex. 13 (Board Report Excerpt) at
14.
137.

In stark contrast to its treatment of all Orange County applicants, the Location

Board utterly disregarded its expressed concerns regarding cannibalization when it evaluated
Lagos application.
138.

Both the Location Board and the Gaming Commission were presented with

extensive evidence irrefutably establishing that the vast majority of Lagos revenue would be
cannibalized from existing gaming facilities in the area, including the following:

Lago itself admitted in its application that the majority of its projected gaming revenue
(approximately $134 million) will be drawn from existing New York gaming facilities,
Ex. 2 (Lago Application Executive Summary) at 3.

Lagos own market research, discussed in its application, revealed that more than $30
million of its first-year revenue will be drawn from Turning Stone alone. Ex. 38 (Lago
Application Exhibit VIII.A.3) at 61.

Lagos own market analysis also admitted that Native American gaming facilities in the
same region will be materially harmed by Lago. See, e.g., id.

30

An expert report by Union Gaming Analytics estimated that virtually allnearly

90%of Lagos gaming revenue would be cannibalized from existing New York
gaming facilities and that Lago would only grow the gaming market by $16 million.
Ex. 39 (Union Gaming Analytics Report) at 35, 36-37.

Another expert report projected a 67% cannibalization rate for Lago. Ex. 40 (Pyramid
Report) at 39.9
139.

Lagos projected cannibalization of existing facilities will be significantly greater

than that of Orange County applicants rejected by the Location Board on cannibalization
grounds. Compare Ex. 2 (Lago Application Executive Summary) at 3 (projecting 51%, or $134
million, in cannibalized revenues for Lago) with Ex. 44 (Live! Hotel & Casino Application
Exhibit VIII.A.3 Excerpt) at 60-62 (projecting $79.8 million in cannibalized revenues for Live!
by second year of operation) & Ex. 45 (Caesars New York Application Exhibit VIII.B.3.a_A1
Excerpt) at 32 (projecting that 84.9% of Caesars $694.9 million in gaming revenue would be
new gaming revenue, leaving approximately $104.6 million in cannibalized revenues).10
140.

Although all of the foregoing reports were submitted to the Location Board and

the Gaming Commission, the Location Board failed to address them in its Board Report and the
Gaming Commission made no reference to them in awarding a license to Lago.

On September 29, 2014, the Finger Lakes Racing Association submitted both the Union
Gaming Analytics Report and the Pyramid Report to the Location Board. See Ex. 41 (Finger
Lakes Racing Association Letter (Sept. 29, 2014)) at 4; see also Ex. 42 (Verified Petition, Finger
Lakes Racing Association, Inc. v. New York State Gaming Facility Location Board, et al., Index
No. 1235-15 (Sup. Ct., Albany Cnty. Mar. 6, 2015)) 48. On April 1, 2015, counsel for
Petitioners submitted both reports to the Gaming Commission. Ex. 43 (Williams & Connolly
Letter (Apr. 1, 2015)) at 7.
10

The full Live! Hotel & Casino Application Exhibit VIII.A.3 is available at
https://gaming.ny.gov/pdf/Redacted_Cordish/VIII%20A/VIII%20A%203/OC%20Market%20St
udy%20-%20Final.pdf. The full Caesars New York Application Exhibit VIII.B is available at
https://gaming.ny.gov/pdf/Redacted%20RFA%20Applications/Caesars%20New%20York/RED
ACTED/REDACTIONS/04%20-%20VIII.B.%20Economics-%20REDACTED.pdf.
31

141.

The Location Board justified its recommendation of Lago by claiming that Lago

would generate more revenue than the other applicants in the region, Ex. 13 (Board Report
Excerpt) at 32, yet the Location Board expressly rejected this exact same reasoning when it
summarily rejected all Orange County applicants in Region 1, all of which were projected to
generate far more gaming and state tax revenue than the selected applicant (Montreign).
142.

Massive shifting of revenue from existing gaming facilities to Lago contradicts a

principal goal of the Gaming Act, to boost economic development, create thousands of wellpaying jobs and provide added revenue to the state. Gaming Act 1300(5) (emphasis added).
143.

Lago would force existing facilities like Turning Stone, which have invested

hundreds of millions of dollars in the ailing central New York economy, to lay off hardworking
employees, thereby eliminating, rather than creating, jobs.
144.

The Pyramid Report estimates that existing New York gaming facilities will have

to decrease direct employment by 1,040 jobs. That is nearly as many jobs as Lago purports to
create, resulting in virtually no job creation at all. Ex. 40 (Pyramid Report) at 48, Table 19.
145.

The Pyramid Report further projects that Turning Stone alone would lose

approximately $59 million in revenue to Lago in 2018 and that 445 direct employees would lose
jobs, resulting in approximately $9.7 million in lost direct wages of workers who will suffer
layoffs as a result of the Lago award. Id.
146.

Furthermore, among the seventeen applicants for casino licenses in the State,

Lagos proposed location is the worst location to fulfill the Gaming Acts purpose of increasing
State revenues by retaining New York gamblers and attracting non-New York residents to visit.
It is more than a 90-minute drive from the nearest State border. Ex. 46 (Google Maps Lago to
Pennsylvania State Border Distance).

32

147.

Lago itself (optimistically) admits that only 14% of its revenue will be recaptured

from out-of-state gaming facilities. Ex. 2 (Lago Application Executive Summary) at 3.

148.

Lagos worst-possible location, which results in the majority of its revenues being

siphoned from existing New York casinos rather than attracting new casino business into the
State, is antithetical to the Gaming Acts goal of attract[ing] non-New York residents. Gaming
Act 1300(6).
149.

The award of a gaming license to Lago turns the objectives of the Gaming Act on

their headcannibalizing existing New York gaming facilities while attracting minimal business
from out-of-state gaming facilities.
150.

Notwithstanding this fundamental flaw in Location Boards recommendation of

Lago, the Gaming Commission awarded a license to Lago.

4.
151.

The Location Board Applied a Different Standard to Lago on Other

Issues As Well.

In addition to its inconsistent treatment of cannibalization, the Location Board

minimized or outright ignored issues concerning Lago that it cited as reasons for rejecting other
applicants.
152.

As discussed above, the Location Board cited cannibalization of existing New

York gaming facilities as a compelling reason to reject applicants from Orange County, but
recommended Lago despite the certainty that it will extensively cannibalize existing New York
gaming facilities.
153.

In rejecting applicant Capital View, the Location Board noted the substantial level

of local opposition to the casino. Ex. 13 (Board Report Excerpt) at 27. Yet the Location Board
recommended Lago despite finding that there is a well-organized and community-driven grass
roots opposition to the project. Id. at 285.

33

154.

For three unsuccessful applicants, the Location Board highlighted its concern that

pending litigation threatened the realization of the project. Ex. 13 (Board Report Excerpt) at 18,
23, 24 & 27. Yet as to Lago, even though litigation brought by local opponents was disclosed in
Lagos application, the Location Board did not even mention that suit in the Board Report.11
155.

With respect to three applicants, the Location Board identified the absence of an

established player reward program and/or player database as a significant concern. Id. at 17, 19,
20, & 30. For example, the Location Board found that Grand Hudsons absence of a player
reward program would hinder the creation of a secure and robust gaming market in the Region
and State. Id. at 19. Lago lacks both a player reward program and a player database, but the
Location Board expressed no concern about those facts. Id. at 32.
156.

As the Location Board was tying itself in knots to justify the recommendation of

Lago in Region 5 in light of its different treatment of similarly situated applicants in other
regions, the Location Board revealed that it was operating under the erroneous belief that it
needed to choose at least one applicant in Region 5.
157.

The Gaming Act makes clear that the Gaming Commission has no obligation to

award a gaming license in a region if there are no qualifying bids. Gaming Act 1314(3).
158.

The Location Board erroneously concluded that the Gaming Act required it to

recommend at least one gaming facility located in each of three defined regions. Ex. 13
(Board Report Excerpt) at 4; see also Ex. 47 (Location Board Meeting Transcript (Jan. 13,
2015)) at 2 (We simply said and thought that Lago was the strongest application of the three
received, and thus I think that decision of Lago should stand as well.).

11

That suit was different from the SEQRA action discussed above that Lago did not disclose in
its application.
34

159.

The Location Boards recommendation of Lago was based upon the Locations

Board erroneous belief that it was required to recommend at least one applicant from Region 5.
160.

The Gaming Commission awarded a gaming license to Lago even though this

significant defect in the Location Boards process was brought to the attention of the Gaming
Commission before it awarded licenses. Ex. 43 (Williams & Connolly Letter (Apr. 1, 2015)) at
18 n.61.
5.
161.

The Location Board Improperly Relied on a New Selection Factor Not

Contained in the RFA.

The Location Board also added a new selection factor to its analysis that was not

contained in its RFA: namely, whether a proposal best fulfill[s] the intent of the Act to provide
economic assistance to disadvantaged areas of the State while enhancing Upstate New Yorks
tourism industry. Ex. 13 (Board Report Excerpt) at 8.
162.

The Location Board stated that it gave considerable weight to this new factor.

Id. at 14. It relied on it extensively in its Board Report. Id. at 14-15, 27, 28, 29-30, 31, 33, 35,
36-37.
163.

The Location Boards reliance on a new selection factor was not disclosed in its

164.

Notwithstanding this fundamental flaw in the selection process, the Gaming

RFA.

Commission awarded a license to Lago.

C.

The Location Boards Recommendation of a Second Applicant in Lagos

Region.

165.

On December 26, 2014, fewer than ten days after the Location Board announced

its recommendations, Governor Cuomo asserted that the intent of the Gaming Act was to site a
new casino in the depressed Southern Tier of Region 5. See Ex. 48 (Letter from Gov. Cuomo to
Gaming Commission and Location Board (Dec. 26, 2014)). The Governor characterized the
35

Location Boards recommendation of Lago in the narrow sliver of Region 5 significantly north
of the Southern Tier as an anomalous situation. Ex. 49 (Joseph Spector, Region needs better
casino plan for license, Cuomo says, Press & Sun-Bulletin (Jan. 19, 2015)) at 1.
166.

The Governor requested that the Gaming Commission and Location Board

undertake a partial do-over in Region 5 by issuing a new RFA for bids in the true Southern
Tier. See Ex. 48 (Letter from Gov. Cuomo to Gaming Commission and Location Board (Dec.
26, 2014)). The Location Board did so, and on October 14, 2015, it recommended Tioga Downs
Casino, Racing & Entertainment (Tioga) in Nichols, New York to apply for the fourth gaming
facility license. Ex. 50 (Region 5 Decision).
D.

The Dawley Decisions Effect on Lagos Application and the Location

Boards Recommendation.

167.

On July 10, 2015, the Appellate Division, Fourth Department, reversed the

Supreme Court and ruled against Lago in the SEQRA lawsuit that Lago had failed to disclose to
the Location Board. Dawley v. Whitetail 414, LLC, 130 A.D.3d 1570 (4th Dept 2015). The
Fourth Department nullified the Town of Tyres negative declaration with respect to Lago. Id. at
1571. Importantly, it also vacat[ed] [Lagos] site plan approval and all related resolutions. Id.
168.

The Towns June 12, 2014 resolutions expressing local support for the casino and

approving a Host Community Agreement with Lago were among the resolutions that were
challenged in the Dawley action and nullified by the Fourth Departments decision. Ex. 21
(SEQRA Verified Petition, Dawley v. Whitetail 414, LLC, Index No. 48435 (Sup. Ct., Seneca
Cnty. July 11, 2014)) at 22-23; Dawley, 130 A.D.3d at 1571.
169.

Dawley thus invalidated Lagos June 2014 application, which was required to

include a valid local resolution of support for the casino and a community mitigation plan.

36

170.

Rather than disqualify Lago as required by statute because its application lacked a

required element, the Gaming Commission allowed Lago to substitute a new Community
Mitigation Plan approved on October 22, 2015well after the Location Boards
recommendations had been madeto fulfill Lagos statutory requirement to provide plans for
mitigating potential impacts. Ex. 1 (Lago Gaming License Award) 7; Ex. 67 (Community
Mitigation Plan Resolution).
171.

The Community Mitigation Plan was not part of Lagos application to the

Location Board, and it was never considered by the Location Board in recommending applicants
to the Gaming Commission.
172.

The deadline for applications to the Location Board was June 30, 2014, and the

Location Board disqualified an applicant that failed to provide all required materials by that
deadline. See Ex. 14 (Disqualification of Florida Acquisition Corporation).
173.

In addition to invalidating Lagos application, Dawley had the legal effect of

nullifying the Location Boards recommendation of Lago.

174.

The Location Boards recommendation of Lago was a SEQRA action.

175.

SEQRA defines an action broadly to include:

(1) projects or physical activities, such as construction or other activities that may
affect the environment by changing the use, appearance or condition of any
natural resource or structure, that . . . require one or more . . . approvals from an
agency or agencies;
(2) agency planning and policy making activities that may affect the environment
and commit the agency to a definite course of future decisions;
(3) adoption of agency rules, regulations and procedures, including local laws,
codes, ordinances, executive orders and resolutions that may affect the
environment; and
(4) any combinations of the above.

37

6 N.Y.C.R.R. 617.2(b).
176.

Because the Location Board recommendation was a SEQRA action, compliance

with SEQRA was a necessary pre-condition. See 6 N.Y.C.R.R. 617.3 (No agency involved in
an action may undertake, fund or approve the action until it has complied with the provisions of
SEQR.).
177.

As a result, when the negative declaration was nullified in Dawley, the Location

Boards recommendation of Lago was rendered invalid as well.

178.

Because the Gaming Commissions award of a license to Lago was predicated on

an invalid Location Board recommendation, and an invalid application by Lago, the grant of a
license was unlawful.
E.

The Gaming Commissions Unquestioned Acceptance of the Location

Boards Recommendation of Lago.

179.

During the nearly ten months that elapsed between the issuance of the Board

Report on February 27, 2015, and the Gaming Commissions licensure vote on December 21,
2015, Petitioners brought to the Gaming Commissions attention numerous errors of law in the
Location Boards process and analysis, the Location Boards arbitrary and capricious reasoning
in recommending Lago, and Lagos ineligibility for licensure under the criteria enumerated in the
Gaming Act. See Exs. 43, 51-54 (Williams & Connolly Letters dated April 1, 2015, July 17,
2015, October 23, 2015, November 19, 2015, and December 18, 2015); see also Exs. 55-59
(Casino Free Tyre Submissions).
180.

The Gaming Commission was also well-apprised of these matters because its

Executive Director and other staff drafted the Board Report. Ex. 13 (Board Report Excerpt)
Disclaimer; Ex. 60 (Aff. of Robert Williams) 3-4.

38

181.

On December 21, 2015, the Gaming Commission convened in New York City to

vote on the gaming license applications of Lago, Rivers, and Montreign.12

182.

Following the Gaming Commissions unlawful award of a gaming license to

Lago, as described infra, Petitioners notified Respondents of Petitioners intent to challenge the
award in court and that, consequently, [a]ny construction by Lago on the casino is done at its
own peril. Ex. 68 (Williams & Connolly Letter (Dec. 21, 2015)).
1.
183.

The Gaming Commission Failed to Provide Any Reasons to Support

the Award of a Gaming License to Lago.

From start to finish, the licensing portion of the December 21, 2015 Gaming

Commission meeting was completely scripted. There were no questions, discussions, or debates
among the Commissioners.
184.

The Commissioners unanimously voted in lockstep to award Lago a license.

185.

The Gaming Commission articulated no rationale in support of the award of a

license to Lago.13 It did not provide any explanation for its conclusion that Lago satisfied all of
the requirements for a gaming license under the Gaming Act. Nor did it place any evidence in
the public record to support or explain the grounds for its conclusory determination that Lago
should receive a gaming license.
186.

Instead, the Commissioners simply voted, with no discussion whatsoever, that

Lago was suitable for gaming facility licensing per standards contained in sections 13[17] and
13[18] of the Gaming Act; that Lago meets the minimum licensing threshold set forth in
section 13[16] of the Gaming Act; and that that the motion to execute the gaming facility
12

Tioga Downs application for a gaming license is still pending before the Gaming
Commission.
13

Lagos license will take effect on the earlier of March 1, 2016 or the date of its payment of
certain monies owed. Ex. 1 (Lago Gaming License Award) at 1.
39

license to Lago should be approved. Ex. 61 (Gaming Commission Meeting Transcript (Dec. 21,
2015)) at 10-11.
2.
187.

The Gaming Commission Failed to Review the Propriety or

Lawfulness of the Location Boards Decisions or Selection Process.

The Commissioners were expressly instructed by the Commissions General

Counsel not to review either the Location Boards selection process or the propriety of the
Location Boards recommendations.
188.

General Counsel to the Commission instructed the Commissioners only to

consider, under sections 1316-1318 of the Gaming Act, whether each applicant (a) meets the
minimum license thresholds, (b) is suitable for licensure, and (c) is not disqualified:
I would like to take a moment to describe for you, and for the public, what
your statutory duties are in regard to licensing gaming facilities pursuant to
article 13 of the Racing Pari-Mutuel Wagering and Breeding law. It would
also be useful, I think, to clarify what is not your role or responsibility in
regard to these licensing decisions. Misperceptions abound amongst some
casino opponents, some public officials, and some in the media, in regard to
what your role is today in considering these decisions.
****
It is important to note that your role is not to reevaluate all of the
applications, compare applicants, or to consider or reconsider the selection
criteria the Gaming Facility Location Board considered and applied. Your
role is no[t] to substitute your judgment for that of the Gaming Facility
Location Board. Your role is not to decide whether you think the Gaming
Facility Location Board made the correct selections. Your role is not to
exercise any review of the selection decisions the Gaming Facility Location
Board made.
You may or may not have different views of which applicants the Gaming
Facility Location Board should have selected. That is of no matter, because
the law did not give to this commission the authority to select applicants for
gaming facility licensure consideration. The law gave the Gaming Facility
Location Board the sole power and authority to make those selections. You
are not [an] appellate body exercising review of the Gaming Facility
Location Boards processes or decision-making. Rather, your charge is to
consider only the applicants that the Gaming Facility Location Board
selected and presented to you. With respect to each of those applicants, the
40

legislature has charged you with determining whether each applicant is

qualified for licensure, is not disqualified for licensure, and has met statutory
minimum qualifications for licensure. If you conclude that those criteria are
present for an applicant, you have the power to grant a gaming facility
license to such applicant. I would like to review now, with you, those
statutory criteria.
Ex. 61 (Gaming Commission Meeting Transcript (Dec. 21, 2015)) at 6 (emphasis added).
General Counsel to the Commission also enumerated the requirements of sections 1316-1318 of
the Gaming Act and summarized the need for SEQRA compliance prior to any license award.
Id. at 6-8.
189.

Contrary to its counsels instruction, the Commission at all times possessed the

broad power under the Gaming Act [to] deny an application . . . for any cause that the
commission deems reasonable. Gaming Act 1305(6) (emphasis added).
190.

In addition, section 1314 of the Gaming Act, entitled License applicant

eligibility, provides that [g]aming facility licenses shall only be issued to applicants who are
qualified under the criteria set forth in this article, as determined by the commission, Gaming
Act 1314(1) (emphases added), and that if the commission is not convinced that there is an
applicant that has met the eligibility criteria . . . , no gaming facility license shall be awarded,
id. 1314(3) (emphases added). Section 1320 of the Gaming Act, which concerns the Location
Boards siting evaluation of the applicants, provides that the evaluation is for the purpose of
determining whether an applicant shall be eligible for a gaming facility license. Gaming Act
1320 (emphasis added). The Gaming Commission thus had a clear statutory duty to deny a
license to any applicant that did not meet the eligibility criteria, including those set forth in
section 1320 of the Gaming Act.
191.

In instructing the Gaming Commission that it had no power to review the basis for

the Location Boards recommendations or its process, its General Counsel omitted any mention
41

of the Gaming Commissions broad statutory power to deny any application for any cause
deemed reasonable.
192.

Counsels legal instruction resulted in the Gaming Commissions blind adoption

of the Location Boards recommendation of Lago, ignoring the significant errors of law and
unsound and inconsistent reasoning that should have precluded any reliance by the Gaming
Commission on that recommendation.
193.

The Gaming Commissions blind march forward should raise eyebrows because it

occurred in the context of casino gaming, one of the most controversial industries in the country.
Officials who were statutorily obligated to protect the public did not do so.
F.

The Gaming Commissions Arbitrary and Capricious Traffic Mitigation

Conditions on Lagos Gaming License.

194.

In the gaming license awarded to Lago, the Gaming Commission identified traffic

improvements as a required condition for mitigating local impacts from the casino. Ex. 1 (Lago
Gaming License Award) 7.
195.

Because the Town of Tyres rural roads are ill-equipped to support the anticipated

3.3 million visitors per year, Ex. 11 (Lago Application Exhibit VIII.C.4.c), and 9,000 vehicle
trips per day, Ex. 12 (Traffic Impact Study Excerpt) at 21, that Lago projects to attract, the
Town, Lagos traffic expert, the New York Department of Transportation, and the New York
Thruway Authority concluded that extensive off-site road improvements were needed to mitigate
the expected traffic onslaught. Ex. 9 (2015 SEQRA Statement of Reasons Excerpt) at 49-52;
Ex. 12 (Traffic Impact Study Excerpt) at 46-47; Ex. 62 (Letter from NYSDOT to Virginia
Robbins (Apr. 23, 2014)) at 3; Ex. 63 (Letter from NYSTA to Virginia Robbins (Aug. 14, 2015))
at 1, 3.

42

196.

The Location Board emphasized in the Board Report that the Gaming

Commission should work with Lago to address potential traffic impacts of its facility on the
local community. Ex. 13 (Board Report Excerpt) at 11.
197.

When Lago obtained a second negative declaration from the Town of Tyre in

October 2015, the negative declaration and other Town resolutions required Lago to make
numerous off-site road improvements in order to mitigate the casinos impact on traffic to an
acceptable level. Ex. 9 (2015 SEQRA Statement of Reasons Excerpt) at 50-52; Ex. 64 (2015
Development Plan Resolution) at 3-4; Ex. 65 (2015 Site Plan Resolution) at 5-6, 8. The traffic
mitigation measure required by the Town include: (1) adding a dedicated right turn lane at the
intersection of NYS Routes 318 and 414, Ex. 9 (2015 SEQRA Statement of Reasons Excerpt) at
50; (2) adding a series of lanes and a new toll plaza lane at NYS Thruway exit 41, id. at 51-52;
(3) creating turn lanes at the intersection of NYS Route 5 & 20 and NYS Route 89, id. at 51-52;
(4) expanding NYS Route 414 to four lanes from the Thruway exit to the casino entrance, id. at
52; (5) adding turning lanes to the intersection of the NYS Thruway and NYS Route 414, id.;
and (6) expanding the NYS Thruway bridge on NYS Route 414, id.
198.

In contradiction of the Town of Tyres findings, however, as well as the findings

of the expert involved agencies, the license awarded by the Gaming Commission states that
Lago shall implement only a single traffic mitigation measure: [w]iden the shoulders of NYS
Route 414 and install signage. Ex. 1 (Lago Gaming License Award) 7.
199.

The Gaming Commission thus plucked out only one piece of a comprehensive

traffic mitigation plan, effectively overruling the Town of Tyre, involved agencies, and an expert
traffic study without providing any justification for doing so, rendering the license awarded to
Lago arbitrary and capricious.

43

G.

The Gaming Commissions Reliance on an Invalid Negative Declaration.

200.

As asserted previously, the Gaming Commission license award was predicated on

the satisfaction of SEQRA and requires compliance with SEQRA.

201.

Although the Town of Tyre issued a new negative declaration with respect to

Lago on October 1, 2015, that negative declaration is unlawful for the reasons set forth in a
Verified Petition filed on November 2, 2015 pending in the Seneca County Supreme Court. See
generally Ex. 69 (Verified Petition, Casino Free Tyre, et al. v. Town Board of the Town of Tyre,
et al., Index No. 49749 (Sup. Ct., Seneca Cnty. Nov. 2, 2015)).
202.

Because SEQRA still has not been satisfied, the Gaming Commissions license

award to Lago was invalid as a matter of law.

AS AND FOR A FIRST CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO WAS UNLAWFUL, LACKED A
RATIONAL BASIS, AND WAS ARBITRARY AND CAPRICIOUS BECAUSE THE
GAMING COMMISSION FAILED TO PROVIDE ANY RATIONAL BASIS FOR ITS
DECISION
203.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

204.

During the December 21, 2015 meeting at which the Gaming Commission

awarded a license to Lago, the Gaming Commission offered no explanation or reasoning

whatsoever to support its decision to award a license to Lago. Nor did it place any evidence in
the public record to support or explain the grounds for its conclusory determination that Lago
should receive a gaming license.
205.

Instead, the Commissioners simply voted, with no discussion, that Lago was

suitable for gaming facility licensing per standards contained in sections 13[17] and 13[18] of
the Gaming Act; that Lago meets the minimum licensing threshold set forth in section 13[16]

44

of the Gaming Act; and that that the motion to execute the gaming facility license to Lago should
be approved. Ex. 61 (Gaming Commission Meeting Transcript (Dec. 21, 2015)) at 10-11.
206.

The Gaming Commission did not address how Lago satisfied the requirements of

the ten subsections of section 1316 of the Gaming Act, which contain criteria that an applicant
must satisfy in order to be eligible for a gaming license. Nor did it explain how Lago satisfied
the various suitability criteria enumerated in section 1317 of the Gaming Act or why Lago was
not disqualified under the provisions of sections 1317 and/or 1318 of the Gaming Act.
207.

The Gaming Commission provided no explanation for its decision to award Lago

a license despite the fact that Petitioners presented extensive evidence to the Commission that
Lago did not satisfy the requirements of the Gaming Act, including, inter alia, evidence that
Lagos application for a gaming license was fatally defective because it lacked required elements
and evidence that Lago withheld material information from the Location Board and Gaming
Commission.
208.

In fact, the Gaming Commission failed to address any of the issues raised by

Petitioners as to why Lago should not receive a gaming license.

209.

The Gaming Commissions failure to provide any explanation or factual support

for the award of a gaming license to Lago renders the award of a license to Lago unlawful,
lacking a rational basis, arbitrary, and capricious.
AS AND FOR A SECOND CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO WAS UNLAWFUL AND
ARBITRARY AND CAPRICIOUS BECAUSE THE GAMING COMMISSION FAILED
TO EXAMINE THE LAWFULNESS AND REASONABLENESS OF THE LOCATION
BOARDS RECOMMENDATION OF LAGO BASED ON AN ERRONEOUS
INSTRUCTION FROM COUNSEL
210.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

45

211.

In determining whether to award a license to Lago, the Gaming Commission

completely renounced its statutory authority to examine the lawfulness and reasonableness of the
Location Boards selection process and recommendations.
212.

Rather than acknowledging or exercising its clear power under the Gaming Act to

deny an application . . . for any cause that the commission deems reasonable, Gaming Act
1305(6) (emphasis added), the Gaming Commission instead blindly accepted the Location
Boards recommendations as a fait accompli in awarding a gaming license to Lago.
213.

The Gaming Commission also failed to consider substantial evidence submitted

by Petitioners that demonstrated that the Location Boards selection process was unlawful and
that the Location Boards recommendation of Lago was arbitrary and capricious.
214.

Adhering to instructions from the Gaming Commissions General Counsel, the

Commissioners made no inquiry into whether the Location Boards recommendations were
based on a lawful process that complied with the Gaming Act; nor did they conduct any inquiry
concerning the basis for the Location Boards recommendations.
215.

Instead, after a script was read, the Commissioners voted in unison, with no

discussion, that Lago, Montreign, and Rivers were suitable for a license under sections 1317
and 1318 of the Gaming Act; met the minimum license thresholds in section 1316; and would
receive a gaming license.
216.

The Gaming Act confers on the Gaming Commission the broad power [to]

deny an application . . . for any cause that the commission deems reasonable. Gaming Act
1305(6) (emphasis added).
217.

In addition, section 1314 of the Gaming Act provides that [g]aming facility

licenses shall only be issued to applicants who are qualified under the criteria set forth in this

46

article, as determined by the commission, Gaming Act 1314(1) (emphasis added), and that if
the commission is not convinced that there is an applicant that has met the eligibility criteria . . . ,
no gaming facility license shall be awarded, id. 1314(3) (emphasis added).
218.

Section 1320 of the Gaming Act, which concerns the Location Boards siting

evaluation of the applicants, provides that the evaluation is for the purpose of determining
whether an applicant shall be eligible for a gaming facility license. Gaming Act 1320
(emphasis added). Accordingly, the Gaming Commission had a clearly defined statutory duty to
deny a license to any applicant that did not meet the statutory eligibility criteria, including those
set forth in section 1320 of the Act.
219.

The Commission also was required to deny [an] application if it finds any . . .

reason . . . as to why it would be injurious to the interests of the state in awarding the applicant a
gaming facility license. Gaming Act 1317(2)(c) (emphasis added).
220.

Petitioners made extensive submissions to the Gaming Commission concerning

the fundamental flaws in the Location Boards selection process and recommendation of Lago; it
was unlawful for the Gaming Commission to stick its head in the sand and refuse to consider
those issues based on erroneous advice from its counsel that it could not revisit in any respect the
Location Boards selection process or recommendations. For this reason, the Gaming
Commissions award of a license to Lago was unlawful, arbitrary, and capricious.
AS AND FOR A THIRD CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO RESULTED
FROM A LICENSURE PROCESS THAT VIOLATED THE GAMING ACT AND WAS
ARBITRARY AND CAPRICIOUS
221.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

47

222.

Section 1320 of the Gaming Act mandates that the Location Boards siting

recommendations shall be weighted by 70% for economic activity and business development
factors, 20% for local impact and siting factors, and 10% for workforce enhancement factors.
Gaming Act 1320.
223.

Consistent with this statutory requirement, the Location Board stated in its

Questions and Answers for applicants that it would score applicants based on these statutory
factors. See Ex. 37 (Round 2 Q&A Excerpt) at 11, Question 370(c) (answering Yes to the
question whether the Boards analysis and scoring of the factors included within the evaluation
criteria [will] be made public); id. at 18, Question 384 (asserting that [a]pplicants will be
scored based upon the total revenue generated by the gaming operation).
224.

The Location Boards March 2014 RFA also stated that the Location Board would

apply the required statutory weighting. See Ex. 15 (RFA) VII.A, at 30 (The decision by the
Board to select an Applicant shall be weighted by seventy (70) percent based on economic
activity and business development factors . . . .); id. VII.B, at 31 (The decision by the Board
to select an Applicant shall be weighted by twenty (20) percent based on local impact and siting
factors . . . .); id. II.C, at 31 (The decision by the Board to select an Applicant shall be
weighted by ten (10) percent based on workforce enhancement factors . . . .).
225.

The Location Board later changed its approach. Instead of engaging in the

statutorily required weighting, the Location Board decided not [to] create numerical scores with
regard to the [statutory] criteria and instead to reach[] its conclusions based on a qualitative
judgment, giving a qualitative weight to categories of factors. Ex. 13 (Board Report Excerpt)
at 8-9 (emphasis added).

48

226.

The Board Report discusses the various statutory factors with respect to each

applicant in a manner that treats each factor as having equal significance, in violation of the
Gaming Act. See generally Ex. 13 (Board Report Excerpt) at 12-37.
227.

Before the award of licenses by the Gaming Commission, Petitioners notified the

Gaming Commission that the Location Board had violated the Gaming Act by refusing to make
its recommendations based on the statutorily-required weighing of the enumerated statutory
factors. Ex. 43 (Williams & Connolly Letter (Apr. 1, 2015)) at 16. The Gaming Commission
nevertheless awarded a gaming license to Lago.
228.

The Location Board also effectively disregarded another important statutory

criterion.
229.

A primary purpose of the Gaming Act is to recapture . . . gaming-related

spending by residents travelling to . . . out-of-state gaming facilit[ies]. Gaming Act

1320(1)(f).
230.

The Gaming Act provides that the Location Board shall evaluate and issue a

finding concerning how each applicant proposes to advance that central statutory objective.
Id. 1320.
231.

The Location Board effectively wrote this critical consideration out of the

Gaming Act by asserting in the Board Report, in almost identical language, that every applicant
it considered anticipated a substantial recapture rate. See n.8, supra.
232.

That assertion was plainly incorrect, as applicants differed substantially with

respect to the amount of revenue recapture they projected. For example, two applicants
projected that recapture would comprise more than 50% of their revenues. See Ex. 13 (Board
Report Excerpt) at 22, 111 (Live! Hotel and Casino New York); id. at 27, 216 (Capital View

49

Casino & Resort). In sharp contrast, Lago projected a tiny recapture rate of 14% from out-ofstate casinos. Ex. 2 (Lago Application Executive Summary) at 3.
233.

Because the award of a gaming license to Lago was based on a process that

violated the Gaming Act, the award of a gaming license to Lago was contrary to law and
arbitrary and capricious.
AS AND FOR A FOURTH CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO VIOLATED THE NATIONS
AND TURNING STONES CONSTITUTIONAL RIGHT
TO EQUAL PROTECTION UNDER THE LAW
234.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

235.

It is a violation of the Equal Protection clauses of the United States and New York

constitutions for the State of New York to treat similarly situated parties differently without a
rational basis for doing so.
236.

Turning Stone is a Native American casino in Verona, New York.

237.

The Location Board recognized in the Board Report the need to recommend

applicants that would not cannibalize existing gaming establishments in the State of New York,
consistent with the objectives of the Gaming Act. As discussed above, the Location Board
rejected all of the Orange County applicants in Region 1 based on their potential for
cannibalization of existing downstate non-Native American gaming facilities and a future nonNative American casino in Sullivan County.
238.

Contrary to the Location Boards treatment of all Orange County applicants, the

Location Board utterly disregarded Lagos significant projected cannibalization of Turning Stone
and other existing upstate gaming facilities.

50

239.

Both the Location Board and the Gaming Commission knew based on the data

available to it that Lago would cannibalize a significant amount of its projected revenue from
Turning Stone and other existing upstate gaming facilities.
240.

No rational basis exists for Respondents different treatment of existing downstate

and upstate gaming facilities regarding cannibalization, rendering the award of a license to Lago
arbitrary.
241.

Because the award of a gaming license to Lago was based on their arbitrary

treatment of similarly situated downstate and upstate gaming facilities established in New York,
Respondents violated the Oneida Nations and Turning Stones constitutional right to equal
protection of the law under both the federal and New York constitutions. Accordingly, the
license awarded to Lago should be nullified.
AS AND FOR A FIFTH CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO WAS
UNLAWFUL AND ARBITRARY AND CAPRICIOUS BECAUSE LAGO SHOULD
HAVE BEEN DISQUALIFIED FROM CONSIDERATION FOR A LICENSE UNDER
THE GAMING ACT
242.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

243.

Lago does not meet the eligibility criteria under the Gaming Act.

244.

The Gaming Act mandates that the Commission shall deny a license, subject to

notice and an opportunity to be heard, where an applicant fails to provide information,

documentation and assurances required by this article or requested by the commission or to
reveal any fact material to qualification, or provides information which is untrue or misleading
as to a material fact pertaining to the qualification criteria. Gaming Act 1318(1)(b).

51

245.

Based on publicly-available information, Lago did not disclose to the Location

Board or Gaming Commission a July 2014 lawsuit (the Dawley action) filed against Lago and
other Respondents seeking to nullify the Town of Tyres June 2014 negative declaration and
other Lago-related resolutions for failure to comply with SEQRA. That was material
information that Lago was required to disclose under the Gaming Act and its accompanying
regulations.
246.

The governing regulations required Lago to disclose any pending legal actions

. . . to which the applicant is a party and a brief description of any such actions. 9 N.Y.C.R.R.
5301.1(c)(5)(i) That duty of disclosure was a continuing one. Id. 5301.1(l)(1). The RFA
required the same information, Ex. 15 (RFA) VIII.A.10, at 39-40, and the Location Boards
Questions & Answers for applicants highlighted the importance of this information, Ex. 19
(Round 1 Q&A Excerpt) at 48, Question 167.
247.

Litigation challenging SEQRA compliance was particularly significant because

the award of a gaming license is subject to SEQRA. See Ex. 23 (Applicant Conference Q&A
(May 2, 2014)) at 4, Question 339.
248.

The Location Board cited a concern about litigation risk in rejecting several

applicants. See Ex. 13 (Board Report Excerpt) at 18, 23-24, 27 (Caesars, Sterling Forest, and
Capital View).
249.

Lago also apparently did not disclose to the Location Board or the Gaming

Commission its intention to seek tax benefits from the Seneca IDA or the fact that it had applied
for such tax benefits in October 2014 and was awarded such benefits in early 2015. That was
material information that Lago was required to disclose under the Gaming Act and its
accompanying regulations.

52

250.

In a (now-nullified) Host Community Agreement, which Lago submitted as an

attachment to its application, Lago merely recited that it may, in its discretion, apply to the
[IDA] for a tax agreement with respect to the Project. Ex. 17 (Lago Application Exhibit
IX.A.3) at 12 (emphasis added).
251.

Because a central goal of the Gaming Act is to provide added revenue to the

state, Gaming Act 1300(5), the governing regulation required applicants to provide significant
evidence of the economic benefit their proposed casino would bring to the State, 9 N.Y.C.R.R.
5301.1(d).
252.

As the Location Board explained in its Questions and Answers for Applicants, a

factor for the graded RFA evaluation is economic impact and a subsidized application will likely
illustrate diminished economic impacts when competitively evaluated. Ex. 19 (Round 1 Q&A
Excerpt) at 39, Question 139(b) (emphasis added).
253.

Because Lago failed to disclose material information to the Location Board, it did

not satisfy the eligibility criteria under the Gaming Act and should have been disqualified from
consideration for a gaming license.
254.

Lago also categorically represented to the Location Board that 100 percent of

financing for construction and operations [is] fully in place. Ex. 2 (Lago Application
Executive Summary) at 2 (emphasis added). In a subsequent presentation to the Location Board
on September 8, 2014, Lago again represented that its financing was secured. Ex. 28 (Lago
PowerPoint Presentation to Location Board Excerpt (Sept. 8, 2014)) at 6, 17.
255.

When Lago applied for IDA benefits in early October 2014, it flatly contradicted

its prior representations to the Location Board by stating that securing IDA benefits constituted
a critical path item for financing. Ex. 25 (Lago 2014 IDA Application) at 8 (emphasis

53

added). And a Lago representative asserted that [n]ot getting the incentives would change the
structure of what we build. Ex. 34 (David L. Shaw, Casino Foes Blast IDA Aid Package,
Finger Lakes Times (Jan. 30, 2015)) at 3 (emphasis added).
256.

Because of its contradictory statements to two different State agencies, Lago did

not satisfy the eligibility criteria under the Gaming Act and should have been disqualified from
consideration for a gaming license.
257.

Before the award of licenses by the Gaming Commission, Petitioners brought

these matters to the attention of the Gaming Commission. Ex. 43 (Williams & Connolly Letter
(Apr. 1, 2015)) at 10, 12 & Ex. 52 (Williams & Connolly Letter (Oct. 23, 2015)) at 1-3. The
Gaming Commission nevertheless awarded a gaming license to Lago. For all of the foregoing
reasons, the award of a gaming license to Lago was arbitrary and capricious and contrary to law.
AS AND FOR A SIXTH CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO WAS UNLAWFUL AND
ARBITRARY AND CAPRICIOUS BECAUSE LAGO FAILED TO SATISFY
STATUTORY REQUIREMENTS FOR CONSIDERATION FOR A GAMING LICENSE
258.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

259.

On July 10, 2015, the Appellate Division, Fourth Department, nullified the Town

of Tyres June 12, 2014 negative declaration with respect to Lago and vacated, among other
related resolutions, the Towns June 12, 2014 resolution of support for the casino and the Towns
June 12, 2014 resolution approving Lagos Host Community Agreement. Dawley v. Whitetail
414, LLC, 130 A.D.3d 1570, 1571 (4th Dept 2015).
260.

Because the Towns resolution of support was a statutory condition that Lago was

required to satisfy in order to be eligible for consideration for a gaming license under the Gaming

54

Act, see Gaming Act 1314(2), Lagos application to the Location Board lacked a required
element.
261.

Accordingly, Lago should have been disqualified from consideration for a

Gaming License pursuant to Section 1314 of the Gaming Act. See Gaming Act 1314(1)
(Gaming facility licenses shall only be issued to applicants who are qualified under the criteria
set forth in this article, as determined by the commission.).
262.

Likewise, Lago was required to include in its application its plan for mitigating

potential impacts of its proposed gaming facility on Tyre and nearby municipalities. 9
N.Y.C.R.R. 5301.1(g)(3). Under section 1316 of the Gaming Act, [n]o applicant shall be
eligible to receive a gaming license if the applicant fails to meet certain criteria, including
clearly demonstrating as part of [its] application how the applicant will address host and
nearby municipality impact and mitigation issues. Gaming Act 1316.
263.

The Gaming Act also required Lagos application to commit to a community

mitigation plan for the host municipality. Gaming Act 1316(6), (7).
264.

Because Lago relied on its invalid Host Community Agreement to satisfy these

requirements, Lagos application should have been disqualified under the Gaming Act for this
reason as well.
265.

The nullification of the Host Community Agreement submitted with Lagos

application also invalidated the Location Boards reliance on that agreement in its evaluation and
recommendation of Lago.
266.

Section 1320 of the Gaming Act provides that, [i]n determining whether an

applicant shall be eligible for a gaming facility license, the board shall evaluate and issue a
finding of how each applicant proposes to advance the following objectives, including

55

mitigating potential impacts on host and nearby municipalities which might result from the
development or operation of the gaming facility. Gaming Act 1320(2)(a).
267.

The Location Board relied on the June 12, 2014 Host Community Agreement in

making that finding with respect to Lago. See Ex. 13 (Board Report Excerpt) at 32 (The Board
finds that Lago presents a complete analysis of the anticipated local impacts of its facility and
provides reasonable strategies for mitigating those impacts . . .); id. at 284 (Lago has agreed to
absorb the incremental costs for municipal services incurred by the local municipalities resulting
from the proposed casinos development and operation. To that end, Lago has entered into a
host community agreement with the Town of Tyre to mitigate these impacts.); id. (detailing
terms of Host Community Agreement).
268.

Because the Dawley decision nullified the Host Community Agreement, the

Location Boards conclusion that Lago mitigated potential impacts on host and nearby
municipalities based on the Host Community Agreement was invalid, as was the Location
Boards recommendation of Lago based on the Host Community Agreement.
269.

The Gaming Commissions reliance on a Community Mitigation Plan effective on

October 22, 2015, in lieu of the Host Community Agreement, to satisfy Lagos statutory
requirements was arbitrary, capricious, and unlawful, because that document was not part of
Lagos June 2014 application to the Gaming Commission and was executed long after the
Location Board recommended Lago based on the invalid Host Community Agreement.
270.

Before the award of licenses by the Gaming Commission, Petitioners brought to

the attention of the Gaming Commission the nullification of required elements of Lagos
application. See Ex. 51 (Williams & Connolly Letter (July 17, 2015)) at 2-4. The Gaming

56

Commission nevertheless awarded a gaming license to Lago. For all of the foregoing reasons,
the award of a gaming license to Lago was arbitrary and capricious and contrary to law.
AS AND FOR A SEVENTH CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO WAS UNLAWFUL AND
ARBITRARY AND CAPRICIOUS BECAUSE THE LOCATION BOARDS
RECOMMENDATION OF LAGO WAS A SEQRA ACTION NULLIFIED BY THE
FOURTH DEPARTMENTS DECISION IN DAWLEY
271.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

272.

SEQRA defines an action broadly to include:

(1) projects or physical activities, such as construction or other activities that may
affect the environment by changing the use, appearance or condition of any
natural resource or structure, that . . . require one or more . . . approvals from an
agency or agencies;
(2) agency planning and policy making activities that may affect the environment
and commit the agency to a definite course of future decisions;
(3) adoption of agency rules, regulations and procedures, including local laws,
codes, ordinances, executive orders and resolutions that may affect the
environment; and
(4) any combinations of the above.
6 N.Y.C.R.R. 617.2(b).
273.

Significantly, [a]ctions commonly consist of a set of activities or steps. The

entire set of activities or steps must be considered the action . . . . 6 N.Y.C.R.R. 617.3(g)
(emphasis added).
274.

Because the Location Boards recommendation of Lago was a necessary step in

Lagos casino development, it was an action subject to SEQRA. See 6 N.Y.C.R.R. 617.3.
275.

As a result, the Location Board was not permitted to recommend Lago until it

complied with the provisions of SEQRA. 6 N.Y.C.R.R. 617.3(a).

57

276.

When the Location Board recommended Lago, it relied on the Towns 2014

negative declaration to satisfy SEQRA. Ex. 13 (Board Report Excerpt) at 282.

277.

Because the Fourth Departments decision in Dawley nullified that negative

declaration, it also nullified the Location Boards recommendation of Lago in reliance on that
negative declaration.
278.

Before the award of licenses by the Gaming Commission, Petitioners brought this

matter to the attention of the Gaming Commission. Ex. 51 (Williams & Connolly Letter (July
17, 2015)) at 5. The Gaming Commission nevertheless awarded a gaming license to Lago.
279.

Because the Location Boards recommendation of Lago was rendered a legal

nullity by virtue of the decision in Dawley, the Gaming Commissions award of a license to Lago
based on that recommendation was unlawful and arbitrary and capricious.
AS AND FOR AN EIGHTH CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO WAS UNLAWFUL AND
ARBITRARY AND CAPRICIOUS BECAUSE IT CONTAINS ARBITRARY AND
CAPRICIOUS CONDITIONS
280.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

281.

Lago projects that it will attract approximately 3.3 million annual visitors, Ex. 11

(Lago Application Exhibit VIII.C.4.c), and approximately 9,000 vehicle trips per day, Ex. 12
(Traffic Impact Study Excerpt) at 21, to the Town of Tyre. Tyre is a tiny rural community of
approximately 950 people.
282.

A critical goal of the Gaming Act is to minimize the impact of a new gaming

facility on its host municipality and nearby municipalities. See, e.g., Gaming Act 1300(8)
(Local impact of the casino sites will be considered in the casino evaluation process.),
1313(1)(l)(2) (requiring studies and reports regarding, inter alia, local and regional social,

58

environmental, traffic and infrastructure improvements), 1320(2) (requiring Location Board to

assign a 20% weight to local impact and siting factors).
283.

Reflecting the critical statutory objective of minimizing the impact of a new

gaming facility on its host municipality and nearby municipalities, the Board Report emphasized
that the Gaming Commission should work with Lago to address potential traffic impacts of its
facility on the local community. Ex. 13 (Board Report Excerpt) at 11.
284.

The gaming license awarded to Lago contains enumerated conditions to Mitigate

Impacts on Host and Nearby Municipalities. Ex. 1 (Lago Gaming License Award) 7.
285.

With respect to traffic mitigation, however, the gaming license states that Lago

shall implement only a single mitigation measure: [w]iden the shoulders of NYS Route 414
and install signage. Id.
286.

The single traffic mitigation measure required by the license was only one small

component of a much larger set of offsite road improvements that the Town of Tyre concluded
were essential to avoid a significant adverse impact on traffic caused by Lago. Ex. 9 (2015
SEQRA Statement of Reasons Excerpt) at 49-52.
287.

Lagos own traffic impact study, the Town of Tyre, and the New York

Department of Transportation and the New York Thruway Authority involved agencies under
SEQRAconcluded that the full package of road improvements contained in the Towns
negative declaration concerning Lago are essential to avoid a significant adverse impact on
traffic caused by Lago. Ex. 9 (2015 SEQRA Statement of Reasons Excerpt) at 49-52; Ex. 12
(Traffic Impact Study Excerpt) at 46-47; Ex. 62 (Letter from NYSDOT to Virginia Robbins
(Apr. 23, 2014)) at 3; Ex. 63 (Letter From NYSTA to Virginia Robbins (Aug. 14, 2015)) at 1, 3.

59

288.

The traffic mitigation measures required by the Town include: (1) adding a

dedicated right turn lane at the intersection of NYS Routes 318 and 414, Ex. 9 (2015 SEQRA
Statement of Reasons Excerpt) at 50; (2) adding a series of lanes and a new toll plaza lane at
NYS Thruway exit 41, id. at 51-52; (3) creating turn lanes at the intersection of NYS Route 5 &
20 and NYS Route 89, id. at 51-52; (4) expanding NYS Route 414 to four lanes from the
Thruway exit to the casino entrance, id. at 52; (5) adding turning lanes to the intersection of the
NYS Thruway and NYS Route 414, id.; and (6) expanding the NYS Thruway bridge on NYS
Route 414, id.
289.

Despite the Towns findings in its negative declaration, and despite the findings

of Lagos own traffic study and correspondence from the New York Department of
Transportation and the New York Thruway Authority concerning the offsite road improvements
needed to avoid Lagos significant adverse impact on traffic, the Gaming Commission failed to
require Lago to complete the offsite traffic mitigation required by the Towns negative
declaration and other Town resolutions concerning Lago. For this reason as well, the gaming
license awarded to Lago was contrary to law and arbitrary and capricious.
AS AND FOR A NINTH CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO WAS UNLAWFUL AND
ARBITRARY AND CAPRICIOUS BECAUSE IT WAS BASED ON INCONSISTENT
FINDINGS AND INCONSISTENT TREATMENT OF SIMILARLY SITUATED
PARTIES.
290.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

291.

The Location Board analysis on which the Gaming Commission relied in

awarding a gaming license to Lago was arbitrary and capricious in multiple respects.

60

292.

The Location Board analysis on which the Gaming Commission relied in

awarding a gaming license to Lago was arbitrary and capricious in its treatment of the issue of
cannibalization.
293.

Consistent with the objectives of the Gaming Act, the Location Board recognized

the importance of limiting the cannibalization of existing gaming establishments in the State. As
discussed above, the Location Board rejected all Orange County applicants in Region 1 based on
their potential for cannibalization of existing downstate gaming facilities and a future gaming
facility in Sullivan County.
294.

The Location Board relied on cannibalization as the dispositive reason to reject all

applicants from Orange County, but did not apply the same standard to Lago.
295.

Voluminous information before the Location Board demonstrated that Lago will

cannibalize the vast majority of its revenue from existing gaming facilities in the State and that
the level of cannibalization by Lago will be significantly greater than that of the Orange County
applicants rejected by the Location Board on cannibalization grounds.
296.

Contrary to its treatment of Orange County applicants and Tioga Downs, the

Location Board utterly disregarded its pronounced concerns about cannibalization with respect to
Lago.
297.

Because the Location Board applied a different standard with respect to

cannibalization when it came to Lago, its recommendation of Lago was arbitrary and capricious.
298.

The Location Boards treatment of Lago was arbitrary and capricious in other

significant respects. With respect to numerous factors considered by the Location Board, the
Board treated Lago differently than similarly situated applicants without any explanation for the
differential treatment.

61

299.

For example, the Location Board cited local opposition as a reason for rejecting

Capital Views application. But it recommended Lago for a gaming license despite finding a
well-organized and community-driven grass roots opposition to the project. Ex. 13 (Board
Report Excerpt) at 285.
300.

Similarly, the Location Board cited concerns regarding pending litigation in

rejecting three applicants. Lago also had litigation pending against it. The Location Board did
not even mention pending litigation against Lago in the Board Report, let alone explain why it
was not a basis for rejecting Lagos application.
301.

The Location Board identified the absence of an established player reward

program and/or player database as a significant concern with respect to three applicants that it
rejected. Ex. 13 (Board Report Excerpt) at 17, 19, 20, & 30. It expressed no such concern as to
Lago (which lacks both).
302.

Before the award of licenses by the Gaming Commission, Petitioners brought to

the Gaming Commissions attention, including through supporting evidence, that the Location
Board had applied its criteria inconsistently with respect to Lago and other applicants. Ex. 43
(Williams & Connolly Letter (Apr. 1, 2015)). The Gaming Commission nevertheless awarded a
gaming license to Lago. For this reason as well, the award of a gaming license to Lago was
contrary to law and arbitrary and capricious.
303.

The Location Board recommended Lago for a gaming license based on the

erroneous belief that the Gaming Act required it to award at least one gaming facility located in
each of three defined regions. Ex. 13 (Board Report Excerpt) at 4.

62

304.

Contrary to the Location Boards erroneous belief, the Gaming Act makes clear

that a gaming facility need not be authorized in a region if there are no qualifying bids. Gaming
Act 1314(3).
305.

Before the award of licenses by the Gaming Commission, Petitioners brought to

the Gaming Commissions attention that the Location Board had recommended Lago based on
the erroneous understanding of the Gaming Acts requirements. Ex. 43 (Williams & Connolly
Letter (Apr. 1, 2015)) at 18 n.61. The Gaming Commission nevertheless awarded a gaming
license to Lago. For all of the foregoing reasons, the award of a gaming license to Lago was
contrary to law and arbitrary and capricious.
AS AND FOR A TENTH CAUSE OF ACTION:
THE AWARD OF A GAMING LICENSE TO LAGO WAS UNLAWFUL, ARBITRARY,
AND CAPRICIOUS BECAUSE IT RELIED ON A NEW SELECTION CRITERION
NOT DISCLOSED IN THE REQUEST FOR APPLICATIONS
306.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

307.

The Location Board added a new selection factor to its analysis that was not

contained in the RFA: namely, whether a proposal best fulfill[s] the intent of the Act to provide
economic assistance to disadvantaged areas of the State while enhancing Upstate New Yorks
tourism industry. Ex. 13 (Board Report Excerpt) at 8.
308.

The Board Report stated that the Location Board gave considerable weight to

this new factor, and the report relied on it extensively.

309.

The Location Boards reliance on and application of a new selection factor not

disclosed in the RFA was unlawful and arbitrary and capricious.

310.

The Gaming Commissions award of a license to Lago based on the Location

Boards flawed selection process also was unlawful, arbitrary, and capricious.
63

AS AND FOR AN ELEVENTH CAUSE OF ACTION:

THE AWARD OF A GAMING LICENSE TO LAGO WAS UNLAWFUL, ARBITRARY,
AND CAPRICIOUS BECAUSE SEQRA HAS NOT BEEN SATISFIED
311.

Petitioners repeat and reallege each of the foregoing paragraphs as though fully

set forth herein.

312.

The Gaming Commissions award of a gaming license to Lago constituted an

action under SEQRA that required compliance with SEQRA. See 6 N.Y.C.R.R. 617.3.
313.

Lago was not in compliance with SEQRA at the time of the Gaming

Commissions award of a gaming license to Lago.

314.

As discussed above, the Fourth Department nullified the Towns June 2014

negative declaration with respect to Lago on July 10, 2015 because it violated SEQRA.
315.

The Towns October 1, 2015 negative declaration for the Lago project also

violated SEQRA for the reasons set forth in the Verified Petition filed on November 2, 2015 in
Casino Free Tyre, et al. v. Town Board of the Town of Tyre, et al., Index No. 49749 (Sup. Ct.,
Seneca Cnty.). See Ex. 69.
316.

Before the award of licenses by the Gaming Commission, Petitioners brought this

matter to the attention of the Gaming Commission. Ex. 53 (Williams & Connolly Letter (Nov.
19, 2015)) at 1. The Gaming Commission nevertheless awarded a gaming license to Lago.
317.

Because Lago was not in compliance with SEQRA at the time of the Gaming

Commissions award of a gaming license to Lago, the Gaming Commissions award of a license
to Lago was unlawful, arbitrary, and capricious.

64

WHEREFORE, Petitioners respectfully demand:

(1)

on all of its Causes of Action (One through Eleven), an Order and Judgment

pursuant to CPLR Article 78 adjudging and decreeing that the award of a gaming facility license
to Lago on December 21, 2015, exceeded the Gaming Commissions lawful authority and
jurisdiction, was made in violation of lawful procedure, was affected by an error of law, lacked a
rational basis, and was arbitrary, capricious, and an abuse of discretion, and determining,
adjudging, and decreeing that said license award is unlawful, null, void, invalid, and
unenforceable;
(2)

such other and further relief as the Court, may deem just, proper, and equitable.

Dated: New York, New York

January 15, 2016

RICHARDS KIBBE & ORBE LLP

By:_________________________
Daniel C. Zinman
Matthew M. Riccardi
Alex M. Solomon
200 Liberty Street
New York, NY 10281-1003
Telephone: 212-530-1800
Facsimile: 212-530-1801
WILLIAMS & CONNOLLY LLP14
Daniel F. Katz
Marcie R. Ziegler
Edward C. Barnidge
725 12th St. NW
Washington, DC 20005
Telephone: 202-434-5000
Facsimile: 202-434-5029
Attorneys for Petitioners

14

Pro hac vice applications for counsel from Williams & Connolly LLP will be submitted
forthwith.
65

TO:
New York State Gaming Commission
One Broadway Center
Schenectady, New York 12305
New York State Gaming Facility Location Board
One Broadway Center
Schenectady, New York 12305
Lago Resort & Casino, LLC
1265 Scottsville Road
Rochester, New York 14624
Wilpac Holdings, LLC
C/O Ct Corporation System
111 Eighth Avenue
New York, New York, 10011
Wilmot Gaming, LLC
1265 Scottsville Road
Rochester, New York 14624
Wilpac Funding, LLC
C/O Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
Thomas C. Wilmot, Sr.
217 Smith Road
Pittsford, New York 14534
M. Brent Stevens
320 The Strand
Manhattan Beach, CA 90266
Wilmorite, Inc.
1265 Scottsville Road
Rochester, New York 14624
PGP Investors, LLC d/b/a Peninsula Pacific
10250 Constellation Blvd., Suite 2230
Los Angeles, CA 90067