Casinos ask state for better terms

All four non-Indian casinos in state are missing their financial targets

Little more than a year since their grand openings, two of New York’s four non-Indian casinos are asking the state for financial help.

Rivers Casino & Resort in Schenectady and Del Lago Resort and Casino in Seneca County are both making their cases with state lawmakers as the negotiations for the 2018-2019 state budget wind down to the final hours in Albany.

Details on their requests are elusive and, given the secretive nature of deal-making in the Capitol, quite possibly subject to change or outright rejection.

But the casinos' financial data is readily available through an online state database.

Both casinos’ performance (and that of the two other casinos) has fallen well short of initial projections offered when their backers were trying to sell their proposals to state regulators and New York voters were being asked to approve limited legalized casino gambling.

Rivers projected tax payments of $69 million to $86 million during its first year of operation but paid $45.45 million to the state from March 2017 through February 2018. Del Lago projected $59 million to $76 million but paid $42.92 million.

Meanwhile, Rivers’ first general manager departed in November and Del Lago’s general manager announced Tuesday he would be departing at the end of this week. Both had been with their respective operations since before they opened.

Also Tuesday, the Rochester Democrat & Chronicle reported that a Del Lago official was in Albany, asking state lawmakers to provide relief. The official would not specify what exactly he was seeking. A Del Lago spokesman would say only that the casino is suffering from recently increased and grossly unfair competition from nearby Indian-run casino operations.

Details were likewise hazy on the request by Rivers.

A New Jersey public relations agency working for Rivers said there would be no comment on the matter. 

A lobbyist reportedly working for the casinos did not return a call seeking comment. 

The state Gaming Commission and state Department of Taxation and Finance said the casinos’ requests has not reached the stage where it would be in their hands. 

The State Division of the Budget would say only that “budget negotiations are ongoing,” which is certainly very accurate: The state budget deadline is 11:59 p.m. Saturday.

However, Assemblyman Phil Steck, D-Colonie, whose district contains Rivers Casino & Resort, said he has been given a rough idea of what Rivers is requesting, and said he endorses it.

In summary, Rivers seeks:

• To take 10 percent of the tax money it pays to the state and spend it instead on marketing. The goal is to increase patronage, increase gambling and thereby increase its own revenue. (This ultimately would bring in more tax revenue, Steck said; in the meantime, there would be no reduction in host-community payments to the city, county, city school district or to surrounding counties.)
• An end to the requirement that it pay the state to run security checks on its prospective employees. (Steck said that the state hasn’t been collecting that and doesn’t require it of the nearest competing gambling facility, Saratoga Casino Hotel.)
• An end to payments Rivers is required to make to Saratoga Casino Hotel to make up for revenue shortfalls in Saratoga. (An official with Saratoga Casino Hotel said this is inaccurate, Rivers pays it nothing — it pays the horsemen’s association to compensate for reduced prize money at the Saratoga harness track.)

“None of this is a huge change,” Steck said, adding that the requests seem reasonable and he supports them.

Thirteen months into the casino era in Schenectady, he considers Rivers a positive force in the city, having fulfilled its promise of increased economic activity in surrounding areas and a new revenue stream for the local municipalities.

“I’m not a fan of casinos generally,” Steck said, calling them effectively a tax on the poor and the middle class. 

He said he would have sought other means of boosting state tax revenue had he been governor. But he’s not governor, and the man who is, Andrew Cuomo, didn't share his views. So New York has four non-Indian casinos, and he accepts that as reality.

Aware of the pun, Steck added: “You have to play the hand you’re dealt.”

James Featherstonhaugh, corporate secretary and part-owner of Saratoga Casino Hotel, said the situation is unfolding much as he expected it would when the state authorized construction of a full-service casino 20 miles south of Saratoga. That is: a 25-percent revenue reduction for the Saratoga Casino Hotel, where the gambling options are limited to video gaming machines and wagers on harness racing.

Featherstonhaugh expects nothing good to come of the late-hour move by Rivers and Del Lago to gain relief through the state.

“I think it’s clear that the gaming universe in New York could be thoughtfully and responsibly reviewed with the goal being to have both a healthy industry which will continue and grow education revenue in New York,” he said. “But that cannot be done in 48 hours or 72 hours.”

Featherstonhaugh thinks it will be another 18 months or so before the financial picture stabilizes for the two Capital Region gambling facilities. 

Steck said he hadn’t researched the financial impact of Rivers on Saratoga Casino Hotel, nor has he heard any complaints about it.

Rivers opened Feb. 8, 2017. A New York State Gaming Commission database shows that $1.99 billion was gambled at Saratoga Casino Hotel from March 2017 through February 2018, an 18.1 percent decrease from $2.43 billion in the preceding 12 months.

By John Cropley

Reprinted with permission of The Daily Gazette