The American Gaming Association brought its Small Business Jobs Tour to Schenectady, N.Y., last week, where local politicos turned out in force to tout the benefits of the new Rivers Casino & Resort.
“Rivers Casino has fast become an important part of our community,” said Mayor Gary McCarthy. “Not only does the casino provide jobs, but the entire facility enhances the hard work we’ve put into making downtown Schenectady a fun place to be and a great place to do business.”
State Senator John Bonacic, a vocal gaming advocate, chimed in with praise for the private-sector investment and job creation spurred by Rivers since it opened in February as one of three new full-scale commercial casinos in the state.
The September 19 event, the third stop in a nationwide AGA road show titled “Get to Know Gaming,” also featured speeches by Jeff Stark, president of the Greater Capital Region Building Trades Council; Ray Gillen, chairman of the Schenectady Metroplex Development Authority; Rivers General Manager Mary Cheeks; and executives from several local businesses.
All spoke warmly of Rivers’ “economic ripple effect,” as Bonacic termed it, as one of the anchors of an economic revitalization under way along downtown Schenectady’s Mohawk River waterfront.
“I think it’s a great thing and we’re seeing all the benefits of it,” the senator said.
Those benefits include $2.6 million in revenues for local governments and $21 million in revenue for the state’s schools.
“Casino gaming is a strong community partner in New York and across the country where hundreds of thousands of small business jobs are supported,” said Geoff Freeman, president and CEO of the Washington, D.C.-based AGA, the industry’s federal lobbying arm.
Research sponsored by the association says casinos employ 14,000 people in New York and account for $827 million wages and $3.6 billion in total economic impact.
Yet, others wonder if the state isn’t in the throes of too much of a good thing.
When New York voters in 2013 approved a constitutional amendment allowing up to seven commercial casinos there was already a sizable tribally owned industry?now numbering seven full-scale casinos?and nine slots-only racetrack casinos in addition to pari-mutuel wagering and a state lottery. Real-money fantasy sports has since joined the mix, and Bonacic is pushing legislation to allow online poker.
The AGA reports that in 2016, the New York market grew by 3.4 percent year on year in terms of gaming revenue, and direct gaming tax receipts were up 3.3 percent.
But at the three new casinos?Rivers, del Lago and Tioga Downs Casino?results have been decidedly “underwhelming,” in the words of a recent New York Times report. And that’s without the impact of a fourth casino, the largest of the group, slated to debut in the Catskills early next year.
State Gaming Commission figures show del Lago, which opened in February near Rochester in the Finger Lakes region, on a pace for $151 million in gaming revenue in Year 1, well shy of its projection of $262 million annually. Rivers had projected $181.5 million to $222.2 million in its first year. To date, it has grossed $81.8 million, a lackluster showing amplified by its apparent cannibalization of the slot floor at Saratoga Casino Hotel in nearby Sarasota Springs, which reported a fall-off in revenue in August of nearly 25 percent compared to last year.
At Tioga Downs Casino, which opened last December in the Southern Tier region, owner Jeff Gural said recently. “I think the market is saturated, and we’ve got a lot of work to do to get the revenues where they need to be.”
Advocates, however, say focusing on early returns is deceptive because none of the three casinos is fully built out, and their hotels, a key revenue-driver, are only recently opened or still under construction.
“It is entirely premature to give credence to any analysis of how well the casinos are operating,” a spokesman for the Gaming Commission told the Times.
“You need a good three-year period before you judge expectations,” Bonacic emphasized at the AGA event. “And I say no matter what the expectations are, if they come out a little short, it’s a huge success because of the benefits I talked about.”
True as that may be, the pressures of competition aren’t going away. If anything, a costly dispute between the Seneca Indian Nation and the Cuomo administration over revenue-sharing, now in its sixth month, is certain to keep them in the spotlight.
The Senecas, a major operator with casinos in Buffalo, Niagara Falls and Salamanca, are concerned enough about the new commercial casinos to have halted $100 million-plus a year in payments to the state, touching off a fiscal crisis in communities across western New York that depend on a share of the payments.
The tribe says it’s no longer contractually obligated to make the payments?equivalent to 25 percent of its machine gaming revenue. The state disagrees. There has been a lot of posturing, but to date, neither side is budging. The Senecas say they’re willing to negotiate, probably in hopes of winning a reduction in the payments. Gov. Andrew Cuomo refuses. He insists the Senecas are in violation of the federally mandated compact that is the legal foundation of their gaming operations and is threatening to license a commercial casino in their most lucrative market, Niagara Falls.
The impasse is now in binding arbitration, but if it isn’t resolved soon municipalities like Niagara Falls will be hard put to fund their operations. Mayor Paul Dyster says non-essential spending has been frozen, telling the Buffalo News the city has “adequate reserves in place to last over the course of this current dispute”.
The state Comptroller’s Office says Niagara Falls will run out of money by year’s end.
