ALBANY — The dice have started to roll but it remains to be seen whether Gov. Cuomo’s bet on casino gambling will pay off for the state’s economy.
Cuomo on Wednesday cut the ribbon on the $440 million Lago Resort & Casino in the Finger Lakes, the second non-tribal casino to open in New York in recent weeks. A third casino, the $330 million Rivers Casino & Resort, will open this week on the site of a former locomotive company in Schenectady.
“Today we are standing in a magnificent monument of how intelligent the decision was, how it’s going to spur the economy, 1,500 jobs, the construction work that was done,” Cuomo said at the Lago opening, referring to the 2013 referendum that approved up to seven non-tribal casinos in the state.
Cuomo and other proponents believe the casinos will bring new investments and visitors to long-struggling regions of the state while also recapturing gambling dollars that New Yorkers currently spend in other states.
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Critics, however, contend the Northeast’s gambling market has reached saturation and New York's new casinos will find it difficult to survive — let alone spark an economic rejuvenation of the surrounding communities.
“It is very hard to open a casino that doesn’t have another casino within 100 miles, so the pie is really being divided up,” said Alan Woinski, president of Gaming USA Corp., a New Jersey-based consulting firm and publisher of industry newsletters.
Under state law, the initial rollout of commercial casinos in New York was limited to four in selected upstate areas. No others are allowed to open until at least 2023.
The first casino to open was the $195 million Tioga Downs casino outside Binghamton, which started operations in December with 33 gaming tables.
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The last of the four to open will be the nearly-$1 billion Montreign Resort Casino in the Catskills, near the site of the former Concord Hotel, in March 2018. It will be the closest of the four to New York City.
Competing against those four will be six tribal casinos and nine video lottery gaming centers — known as racinos — already operating in New York, as well as casinos in New Jersey, Pennsylvania, Connecticut and Massachusetts.
“The bottom line is going to be in three, four, five years when the rest of this market is built out…who is going to survive in this?” Woinski said.
“What happened in Atlantic City was no fluke. They had to close four casinos because there was not a big enough market anymore…and that is going to be the norm in the future.”
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Despite the competition, state and local officials remain bullish on the casinos, pointing to the jobs and tax revenues they will generate.
(Kevin Rivoli/AP) The four casinos and their related hotels and amenities are projected to produce more than 5,000 jobs and generate at least $420 million in tax revenue, most of which will be used to fund education aid across the state. They have already paid more than $174 million in license and other fees to the state.
Robert Williams, executive director of New York’s Gaming Commissions, said the state took great care to ensure that casinos were the right size for the markets they were chosen to serve. He also stressed that no taxpayer dollars were spent in the development of the casinos.
“It was all private investment,” Williams said.
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William Reiber, town supervisor in Thompson, said his Catskills community is already seeing benefits from the planned Montreign, including two additional hotels and an urgent care center that have plans to build in town.
“It has got win-win written all over it,” Reiber said.
The job creation numbers and projected tax revenues, however, are “marginal” and not enough to provide a significant boost to the overall economy, said E.J. McMahon of the Empire Center for Public Policy.
“Where there was nothing there is now something glitzy that lights up the sky at night, but it is still not going to resuscitate those regions,” McMahon said.
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Montreign especially faces tough odds because of its high development costs and the competition it faces from existing casinosn New Jersey, Pennsylvania and Connecticut; as well as racinos in Yonkers and Queens, Woinski said. All of them are competing for a share of the New York City gambling market, but Montreign is among the furthest away and in an area that can be difficult to access, especially in the winter.
Things could also get tougher after 2023 when lawmakers begin contemplating whether and where to site the final three casinos approved as part of the 2013 referendum. It is likely that New York City and its suburbs would be among the areas considered.
“It is not going to be limited to just upstate again,” said Assembly Racing and Wagering Committee Chairman Gary Pretlow (D-Westchester).
Charlie Degliomini, executive vice president of Montreign developer Empire Resorts, concedes the competition will be tough but he believes the casino’s high-end attractions, including a companion water park, convention space and entertainment village, will draw visitors back to the Borscht Belt.
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“It is competitive but we believe we are going out there with a very competitive product,” Degliomini said. “We believe we have built a better mousetrap.”
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