Two new casinos in upstate New York have changed the state's gambling landscape. Joseph Spector, Albany Bureau
People wait outside del Lago Casino for its grand opening in Tyre on Feb. 1, 2017.(Photo: Jamie Germano/@jgermano1/Staff Photographer)
ALBANY - Gamblers shuffling from one upstate casino to another is well underway: Existing racetracks near the two new casinos had a revenue drop of 17 percent each in recent weeks.
Finger Lakes Gaming & Racetrack and the Saratoga Casino both said they expected to take a hit after the opening last month of Rivers Casino in Schenectady and del Lago in Seneca County.
"As expected, we have seen declines in customer traffic and revenue since del Lago's opening," said Steve Martin, a spokesman for Finger Lakes.
After about six weeks of the casinos' operations, state records reviewed by USA TODAY Network's Albany Bureau offered insight into how all the new facilities may fare as they vie for customers in the highly competitive upstate gaming market.
There are now nine casinos or tracks with video-lottery terminals between Batavia and Albany after the state in 2014 legalized four upstate casinos. The fourth, in the Catskills, is set to open next year.
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Fight for gambling dollars
So far, the two new upstate casinos reported a drop in betting since they opened in early February, while the two existing tracks nearby felt the pull from the new competition, records from the state Gaming Commission showed.
Also, Tioga Downs in the Southern Tier, the third full-scale casino upstate, had a slow rollout as it switched from video-lottery terminals to slot machines and table games. Its revenue from slot machines was down 14 percent this year compared with the video-lottery terminals from the same period last year.
Tioga Downs's overall revenue is up 2 percent this year, though, thanks to the addition of 23 table games and 12 poker tables. Only in recent weeks did it have its full complement of slot machines — about 940 — compared to about 800 video-lottery terminals last year.
"I think once we get into the warmer weather, and for us, to get the hotel and the golf course, we should have a better handle on how we’re doing," said Jeff Gural, Tioga Downs' owner.
In its first six weeks of operation, del Lago in Tyre, Seneca County, brought in $19 million in gross gaming revenue — essentially the money left after payouts to winners.
During the same period, Finger Lakes Gaming & Racetrack about 30 miles away received $2.7 million less in revenue from its 1,549 video lottery terminals, a 17 percent decline.
Meanwhile, the other upstate casino to open, Rivers, produced $16 million in revenue over its first five weeks in business. As a result, Saratoga's gaming revenue fell 17 percent.
Early returns
The new casinos said they were pleased with the openings.
“Since opening on February 1, del Lago Resort & Casino has already proven to be an integral part of the Finger Lakes community, and we look forward to continuing to be a gateway to the region.” Jeff Babinski, general manager of del Lago, said in a statement.
The new facilities and the racetracks cautioned that it's too early to predict what the trend lines will be.
"We’re certainly in the range of where we thought we would be, initially," said James Featherstonaugh, an owner at the Saratoga Casino. "We expect it will get worse before it gets better just as they smooth out their operations."
Indeed, bad weather this month didn't help. Tioga Downs actually closed for two days when a major snowstorm crippled the Southern Tier.
Lago's net win per machine — the amount left after payouts to winners — was $119 for the week ending March 19, which was less than half the revenue brought in during its opening week.
How all the casinos and racetracks with video-lottery terminals perform is critical to the region's economy, the state's coffers and area employment.
The state gets a piece of the revenue, which is designated for education, while the facilities employ thousands of people.
"We continue to be pleased by the performance of the casino and the excitement exhibited by our guests," said Rivers spokesman Charles Wiff. "We are constantly making adjustments to our gaming, entertainment and dining options to better serve our guests."
Waiting for summer
The early figures paint an incomplete picture, the facilities' owners said.
Lago, Rivers and Tioga are all planning to open hotels, and they are all banking on the summer tourism season to draw in customers. The existing racinos all traditionally have performed best during the summer months.
"As we head into the spring and summer months, we are focused on every aspect of the operation, creating awareness and employing another 200-plus team members as we work toward opening our hotel and spa this summer," Babinski said.
New casinos usually consider their openings as a slow rollout after the initial ribbon cutting — which in the case of Rivers and del Lago was attended by Gov. Andrew Cuomo and other state leaders.
The casinos need to get customers into their databases to create incentive programs to lure them back, hire staff and open all their amenities.
Still, the early returns at $425 million del Lago weren't much better than the smaller, $300 million Rivers casino.
With 2,000 slots and 77 table games, Lago brought in about $16 million gross gaming revenue during its first five weeks of operation — about the same as Rivers, which has 1,150 slots and 67 table games, the state figures showed.
Buy PhotoFinger Lakes Gaming & Racetrack (Photo: SHAWN DOWD/@sdowdphoto/Staff file photo)
Awaiting more results
By 2019, del Lago estimated to the state that it would produce about $5.4 million a week. Through its first six weeks, it was about $3.2 million a week.
"I don’t think del Lago is doing as well as they thought they would," contended Assembly Racing Committee chairman Gary Pretlow, D-Mount Vernon.
Del Lago declined to comment further about its revenue figures.
The competition between Finger Lakes and del Lago has been an issue since the surprise announcement in December 2014 that del Lago was picked for a casino license.
The competition led the state to provide a better tax rate for Finger Lakes and reach a deal this month with the horsemen to limit the impact on horse racing at Finger Lakes.
Finger Lakes has estimated at least a 30 percent drop in revenue from Lago long term.
"At this point, it is far too soon to determine if those decline levels are a consistent trend or will grow given that they will continue to open various amenities and further develop marketing programs," Martin said.
"Our focus remains on what we can control, which is providing the best possible experience for our guests when they visit."
Gural said his larger concern is the impact the casino war along the Thruway is having on the other track he owns, Vernon Downs in central New York.
The revenue at the harness track with video-lottery terminals fell 5 percent last year compared with 2015 as it faces stiffer competition from the new casinos and the Oneida Indian Nation, which runs the neighboring Turning Stone resort and the Yellow Brick Road Casino closer to Syracuse.
"I’m really concerned. Vernon is losing money," Gural said.
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Joseph Spector is chief of USA TODAY Network's Albany Bureau.
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