A Clouded First Year for N.Y. Casinos
It was a disappointing first year for New York’s fledgling commercial casino industry.
Rivers Casino in Schenectady, del Lago Casino in Finger Lakes and Tioga Downs Casino in the Southern Tier collectively missed their first-year revenue forecasts by approximately $230 million, 39 percent below what they told the state to expect in 2014 when they beat out 11 other proposed casino projects in a highly competitive bidding process in which only four licenses were awarded.
The shortfall came as no surprise. It’s been heavily reported when it became apparent after a few months of operations that Tioga Downs, which opened in December 2016 as a converted racino, and del Lago and Rivers, which opened the following February, were not attracting gamblers in New York’s crowded gaming market in the numbers they expected.
To be fair, neither del Lago nor Rivers had hotels until last summer, and at Tioga Downs not until December, six months behind schedule.
“Our projections assumed the hotel. That would skew the numbers pretty dramatically,” said owner Jeff Gural.
In the final tally, Tioga Downs generated $74 million on the casino floor, 28 percent shy of the $103 million initially forecast. Rivers Casino projected $222 million and delivered $139 million, a 37 percent difference. del Lago was off by 44 percent, ending its first year at about $147 million, more than $115 million below its forecast.
Analysts expect the shortfalls to continue, with Standard & Poor’s questioning the properties’ “long-term revenue stability,” and Moody’s issuing a report last month cautioning that while the new casinos juiced total state gambling revenues by 30 percent the increase largely came at the expense of existing operators.
“This trend, where newcomers are stealing share from incumbents, is consistent with what has been occurring throughout U.S. gaming markets, particularly in the Northeastern portion of the U.S.,” the agency said.
Earlier this month, New York hosted the opening of the largest of the state’s new commercial casinos, and the closest of the four to New York City