TYRE, NY -- The failure of the 11-month-old del Lago Resort & Casino to generate as much revenue as expected has prompted a major credit rating service to downgrade its financial outlook.

Moody's Investor Service has dropped del Lago's rating from "stable" to "negative." In its report, Moody's warns that del Lago's poor performance could keep it from paying off the debts it owes to its lenders. Moody's does believe the casino can continue to pay the interest on the loans, at least for the next year.

"Despite the fact that del Lago Resort Casino opened on time and on budget and has substantially grown total gaming revenues generated in its primary market area, the property's revenue ramp-up is well below Moody's expectations,"  Keith Foley, a senior vice president at Moody's, said in the rating report.

"Given del Lago's current performance, Moody's is of the view that without a substantial improvement in revenue, del Lago will not be able to achieve a level of performance that can support its existing debt capital structure," Foley said.

Why are new Upstate NY casinos falling short on revenue?

Moody's analysis shows at least a $100 million shortfall in first-year revenues for del Lago. It had estimated del Lago would "ramp up" to $250 million in net revenue in its first year.  But del Lago "has consistently reported gross gaming revenue of about $12.5 million per month," the Moody's report said. "At this rate, del Lago's gross gaming revenue will only hit about $150 million" and even less in net revenue.

Moody's also reported that the casino's debt is above the ratings agency's "downgrade trigger."

The $440 million del Lago casino is owned by Rochester developer Thomas Wilmot and operated by gaming company JNB.

It is one of four new non Indian nation-owned full-service casinos authorized to operate in Upstate New York in 2014 and 2015.  The three that have opened in the last 13 months are all failing to achieve the first-year revenues they projected in their applications for state licenses.

Del Lago opened between Syracuse and Rochester at Thruway exit 41 in February. Rivers Casino & Resort in Schenectady opened in the same month. The Tioga Downs Casino in Nichols, west of Binghamton, converted from a racino -- a harness track with slots --  to a full casino -- with table games, poker and slots -- in December 2016.

The fourth and largest of the new non-Indian casinos, Resorts World Catskills, is scheduled to open near Monticello in March.

All three of new casinos already operating have failed to meet the revenue predictions they made in their bids for state licenses. Analyses of records provided to the state Gaming Commission show a combined shortfall of more than $200 million for the first year.

Many observers, including Tioga Downs owner Jeff Gural, have contended that the Upstate casino market is already "saturated." In addition to the new casinos, Upstate is home to casinos operated by the Seneca, Oneida and Mohawk Indian nations, plus several racetrack/slot operations known as racinos.

The Oneida Nation, which already operates the large full-service Turning Stone Casino Resort in Verona and the smaller Yellow Brick Road Casino in Chittenango, has announced it will open its newest casino, Point Place, in Bridgeport, Madison County, on March 1.

Moody's itself, in a 2016 rating of del Lago, predicted it would "cannibalize" other Upstate casinios.

Officals at del Lago have been contacted and are working on a statement in response the Moody's report. In the past, del Lago vice presient and general manager Jeff Babinski has  offered his view that the first-year revenue numbers don't tell the whole story.

He and others say that the casinos have provided jobs, trade and other economic boosts to the state and their local communities. He also points out that each of the properties has had to add some of amenities and attractions in stages.

Del Lago  has 1,956 slot machines and 99 gaming tables, including 14 poker tables. It opened a 205-room hotel and adjoining spa in the  summer, and also offers several dining options, including Portico by Fabio. It also hosts concerts in The Vine entertainment center.

Del Lago cites Thruway traffic as evidence of impact

Don Cazentre writes about Upstate NY casinos for NYup.com, syracuse.com and The Post-Standard. Reach him at  This e-mail address is being protected from spambots. You need JavaScript enabled to view it , or follow him at NYup.com, on Twitter or Facebook.