Gaming flatlined nationally in 2013??
As New York State gaming officials prepare to grant four new casino licenses and developers regale their proposed host communities with the benefits casinos will bring even before they open, Moody’s Investors Service downgraded the national industry from “stable” to “negative.” According to a report in the New York Times, the Empire State would be wise not to rely on gaming to solve its financial problems.
??The excitement in New York has played out against the debacle in Atlantic City, where the market has lost almost half its value since 2006. The multibillion-dollar Revel resort recently filed for bankruptcy?for the second time since it opened in April 2012?and Trump Plaza announced plans to shut down in September. Also on the ropes in AC: Showboat, one of four Caesars Entertainment properties in the seaside town. Caesars recently closed its Harrah’s Tunica resort in Mississippi, and New York Comptroller Thomas DiNapoli has warned that the job and economic gains in communities where new casinos are built “may be offset by losses elsewhere.”
??The commercial casino industry realized $37.83 billion in revenues in 2013, only slightly up (1.3 percent) over 2012, the Schenectady Daily Gazette reported. “The lion’s share of this disappointing increase came largely from gaming’s expansion into new markets—gaming needs new casinos for profits to grow. Gaming’s weird business model includes each new casino’s gains being at the expense of others’ profits,” the Gazette reported.??
That hasn’t deterred 17 would-be casino operators from pursuing four of seven Class III licenses that will be awarded in New York. Collectively, these companies have doled out $6.7 million to industry lobbyists and contributed $4.3 million to state and local politicians in the last two years.
??Genting spent “more than any other bidder on both lobbying and campaign contributions” in New York in 2012 and 2013, according to a report by the New York Public Interest Research Group. Genting’s lobbying expenses totaled nearly $2.5 million, and its campaign contributions were more than $980,000 during the period, NYPIRG said.
??The Malaysian-based company, which runs the highly successful racino at Aqueduct in Queens, is currently building Resorts World Las Vegas, a $4 billion resort at the site of the old Stardust. Genting also invested heavily in Miami, buying the former headquarters of the Miami Herald before lawmakers blocked the passage of a destination resort bill in the state.
??According to the Sloatsburg Village News, Genting’s proposed Tuxedo Ridge Resort proposal “has already paid dividends to the town as the multinational gaming company has poured $3 million into the town coffers, including a $340,000 non-refundable gift to the Tuxedo Free School District.”
??Those gifts have not persuaded a group of residents who are threatening to file a lawsuit to challenge zoning for the project. According to Northeast Public Radio’s WAMC, critics allege the Tuxedo Town Board changed the zoning without regard to environmental impact. Resident Bridget Morris said the casino land “is surrounded by Sterling Forest State Park, which is part of our American heritage, and there also is a watershed area for the drinking water of the residents of New Jersey. I think it’s just really a tremendous amount of gall on their part that they feel that they can take this action without studying the effects of the forest.”
??The Times reported “a loophole in New York’s lobbying law” that allows these companies to sidestep public disclosure of their lobbying activities in communities with fewer than 50,000 residents; 15 of the 16 municipalities proposed as casino sites are in this category. “As Moody’s is warning, it is time to beware of all the promotional hoopla and realize that casino gambling does not always deliver on its promise,” reported the Times.??
The Cordish Companies of Baltimore and Pennsylvania-based Penn National Gaming Inc. have sweetened their proposals by signing agreements with two unions to “guarantee labor peace” if they are allowed to build a $750 million gambling resort in upstate New York, reported the Maryland Daily Record. The partners made deals with the Hudson Valley Building and Construction Trades Council and the Hotel and Motel Trades Council, AFL-CIO.
??The Hudson Valley Casino & Resort, proposed by Saratoga Casino and Raceway, has inked agreements that would provide local municipalities and school districts with more than $5 million in community benefits if the project is built, according to the Hudson Valley Times Herald Record.
??That project is expected to generate $15 million in annual property tax revenue and $8 million each for the Town of Newburgh and Orange County in gambling tax revenue, according to a news release. Saratoga also pledges to contribute $100,000 annually to local school districts, along with other perks.
??Governor Andrew Cuomo, who made passage of the 2013 casino expansion referendum a pivotal part of his plan to improve struggling pockets of the economy, says he’s not concerned about reports that the casino industry has reached critical mass in the Northeastern U.S.
??According to WXXI News, Cuomo said, “The state is not building any casinos, and the state is not spending any money here. These are private companies, which normally know what they are doing. If they don’t, the market will tell them that.??
“The private market, which reads Moody’s, which does this for a living, which is going to invest their money, will make a determination as to what scale and scope the market can support,” Cuomo told reporters. “And they will then build the buildings and employ people and run the business because they think it’s a good business to run.”
