In New York, Too Much of a Good Thing?
New York’s new upstate casinos are likely to end their first year as decided underachievers.
A new analysis by USA Today Network of gaming revenue tallies compiled by the state show the three resorts could miss their 2017 projections by more than $200 million combined, if current trends continue.
It’s a gap that appears to point to a statewide market overloaded with gambling options, not to mention a licensing process that rewarded developers for an optimism that in hindsight looks to have been misplaced.
Tioga Downs in the Southern Tier, the first of the three to open in the form of an existing racino converted to a full-scale casino, predicted $103 million in gaming revenue its first year. Through August, it has generated $52 million and is on track for $70 million for the year.
Rivers Casino & Resort, which opened in Schenectady in February, expected to win $222 million. It has brought in $82 million through July and could finish the year short by $80 million.
del Lago Resort & Casino, which opened in February near Syracuse in the Finger Lakes region, is on track to miss its $263 million forecast by at least $100 million.
“The projections we had were wrong,” Tioga Downs owner Jeff Gural acknowledged.
State and local officials are now wondering about the impacts on projected tax revenues and jobs―the two biggest selling points when New York voters approved the licensing of as many as seven full-scale casinos under private ownership, all with house-banked table games, in a 2013 referendum.
The state currently is home to seven full-scale casinos owned by Indian tribes, with an eighth set to open next year, plus nine machine gaming venues at racetracks. A fourth commercial casino, the largest to date, the $1 billion Resorts World Catskills, slated to open next March 90 miles north of New York City.
“I always thought that we were oversaturating the central part of the state,” said Assemblyman Gary Pretlow, who chairs the Gaming Committee in the lower chamber.
Operators, however, respond that with their resorts still in the process of adding hotel rooms and other attractions, such assessments are premature.
“It’s much too early to make any judgment on gaming performance,” a spokesman for the state Gaming Commission said recently.
In support of that the commission notes that the state’s share of casino revenues is up nearly $200 million since the expansion, with most of those funds designated to support education.
“The truth is, from an economic development standpoint, it’s been a huge success,” said Gural.
“We are filling rooms with tourists who are visiting the attractions and businesses throughout the Finger Lakes,” said del Lago General Manager Jeff Babinski. “While our revenue in the first eight months has been below projections, we are confident that we are moving in the right direction.”
“The variance with the projections doesn’t bother me that much,” said Gov. Andrew Cuomo, who pushed for the expansion five years ago. “They have all been wildly successful in creating jobs and building beautiful complexes. Now they have actual data, and they’ll adjust.”
The price has been steep, though. This year alone it may cost the state and a slew of local communities more than $100 million in funding from the Seneca Indian Nation, which has halted payments from the slot revenues of its three casinos in protest over the expansion, which the tribe sees as a violation of the regional exclusivity it was promised when the payments were contracted.
Pretlow, meanwhile, expects the casinos, at least one if not more, will petition Albany for relief, as the racinos are doing. And he won’t be happy about it, he said.
“My prediction is they’ll be coming back and asking for tax breaks to take money out of education again, and I’m going to have to fight it. Because it’s not right.”