It appears the Catskills’ rebirth as a regional gaming destination is going to take longer than hoped for following an announcement from Empire Resorts that it’s closing its struggling casino at Monticello Raceway.
The company expects to pull the plug on the harness track’s 1,100 video lottery terminals by the third week of April, according a filing with the SEC by Nasdaq-listed Empire.
It will be the first closing of a New York racino since machine gaming was introduced at the state’s horse tracks 17 years ago.
Empire is touting the decision as a strategic consolidation of gaming operations with the company’s nearby Resorts World Catskills, which in the throes of its own troubles since opening last February at a cost of nearly $1 billion. Empire had forecast $277 million in first-year revenue for the newest and most elaborate of New York’s four commercial casinos. It has since managed $136.6 million, and Empire has averaged losses of between $10 million and $13 million per month since its debut, according to news reports.
In June, the company borrowed $30 million from its principal backer, Genting Group Chairman Lim Kok Thay, whose Kien Huat Realty owns 88 percent of Empire, after Moody’s Investors Service downgraded its corporate debt over concerns it wouldn’t generate enough profit to cover its estimated $75 million annual fixed costs.
The Monticello racino, meanwhile, has finished last in statewide VLT revenue every month since Resorts World opened. Last year’s $34.5 million was down from 2017’s by 41 percent.
The company plans to retain a workforce of 40 at the track, while the remaining 160 racino employees have been invited to take jobs at Resorts World or accept severance packages.
Resorts World, meanwhile, said it will continue to provide the same payments to the state and local governments that share in the racino’s profits and will continue to fund purses at the track. But the track’s future looks tenuous as well. Empire says that while it plans to maintain a racing calendar, it could not vouch for the track’s long-term viability.
State Assemblyman Gary Pretlow, who chairs the Racing and Wagering Committee in the lower house, told the Poughkeepsie Journal he questions whether Empire can close the racino without state approval and the drafting of a new revenue-share agreement approved by the Legislature.
He also mentioned a possible solution in the form of a takeover of both the track and the racino by Catskill Off-Track Betting Corp.
“I’m in the process of seeing what we can do legislatively to make it better for both parties,” he said.
