Comptroller: Casinos may not be a cash cow upstate
New York Comptroller Thomas DiNapoli is warning casino developers, politicians and the public not to overestimate the amount of revenue that may be generated by new casinos in the Empire State.
A report from DiNapoli’s office says the experience in other states, where casino revenues have sometimes been lower than expected, is reason enough for New York “to use caution in projecting new revenues and any expenditures based on such resources.”
New York has estimated the new casinos will bring in $238 million annually in state aid for education and $192 million a year more in aid to local governments.
The report added that new casinos could simply shift gaming dollars from the state’s five Indian casinos and nine racinos to Vegas-style properties. Also, the report said, in-state residents may siphon other discretionary spending to gambling?DiNapoli referred to it as “the substitution effect”?which would not add to the economy.
The report said the three regions that will get casinos may have difficulty attracting large numbers of customers because of their distance from population centers. Governor Andrew Cuomo earmarked those areas?the Albany-Saratoga area, the Southern Tier-Finger Lakes region and the Hudson Valley-Catskills region?because of high unemployment in the areas and the need for economic stimulus.
Casinos have been proposed for a total of 20 sites in the state. The lion’s share of developer interest is concentrated in Sullivan County, in the Hudson Valley-Catskills area, which is expected to get two casinos. The owners of the former Nevele resort in the town of Wawarsing, is the only Ulster County proposal. The other proposals are for sites in Orange County.
The developers have each paid the $1 million application fee to be considered, and must present detailed proposals by June 30 to move to the next step in the selection process. The first four licensees will be announced this fall.
Moving From Albany
Officials in Albany, New York were stunned with the proposal for a multimillion-dollar casino near Thruway Exit 23 was nixed. Flaum Management of Rochester had until June 30 to present the proposal to the city and to state regulators, but shifted its efforts to the town of Rensselaer, just across the river. Flaum, which is developing the project with the Chickasaw Nation’s Global Gaming Solution, said the original site was too small because only 17 acres of the 30-acre tract are developable. The partners originally planned a $300 million to $400 million development with a casino, hotel, water park and equestrian center.
Meanwhile, the Rensselaer Common Council voted last week in favor of a resolution supporting the proposal.
Meanwhile, another developer dropped out of the Catskills race when Trading Cove and the Stockbridge-Munsee Community of Wisconsin said they will not bid for a gaming license in the Sullivan County town of Thompson. They blamed the withdrawal on the possibility of a casino in neighboring Orange County that would dilute the market.
Gaming Interests Fund Anti-Casino Campaigns
The forces behind an anti-casino group in New York may oppose Vegas-style gaming halls, but they don’t oppose gambling itself. According to the Rochester Democrat & Chronicle, the group No More Casinos is chiefly funded by two groups with gambling interests: the Delaware North Companies, which through a subsidiary own and operate Finger Lakes Gaming & Racetrack; and Western Regional Off-Track Betting Corp., which owns the Batavia Downs Race Track.
No More Casinos President E. Brian Hansberry, president of Delaware North Companies Gaming and Entertainment, is the former president and CEO of the Seneca Gaming Corp. He worked for the Senecas from 2007 to 2009, and now is trying to quash their efforts to expand their holdings in New York.
Hansberry issued a statement May 30 saying, “My diverse experience in the gaming industry, including time at Seneca Gaming, has made it clear to me that the competitive advantage enjoyed by Seneca Gaming is unfair, not only to Finger Lakes Gaming and Batavia Downs, but to the entire hospitality industry in Rochester and throughout western New York.”
That sparked some verbal sparring between the opponents. Phil Pantano, spokesman for the Seneca Gaming Corp., issued a statement about No More Casinos saying, “We’re aware of lengths to which the coalition has gone to spread its anti-Indian campaign.”
To that, No More Casinos said Seneca Gaming “has a long and sad history of trying to play the ‘race card’ whenever their plans meet meritorious community opposition.”
No More Casinos has spent about $1 million over the past six months to fight new casinos in New York, including $295,000 on internet and social media consulting and advertising; $220,000 on live and robo calls; $211,000 on “grass-roots canvassing”; $151,000 on direct mail; $25,000 on radio; and $25,000 on yard signs, the Democrat & Chronicle reported.
