Casino revenue should give N.Y. cause to pause: Editorial

Even before New York officials got sensible and went with the legal route to expand casino operations, they were basing their financial expectations on rosy projections. At one point, in fact, they were pitching as many as three casinos for the Catskills alone. And, to get there, they outrageously tried to skirt the state Constitution, which prohibited casino operations to expand beyond sovereign Native American land.

Under Gov. Andrew Cuomo, the state has at least gone through the legislature and then voters to amend the Constitution to make such expansions perfectly legal. But the question of where the casinos should be located – and how many of them ultimately there should be – continues to vex New York.

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With three new upstate casinos failing to meet revenue projections, state Comptroller Thomas DiNapoli is rightly being asked to do a hard analysis of the situation. The three casinos could end their first year with about $220 million less in total revenue than they projected when they won the bids for their gaming licenses in 2014, according to a review by the USA Today’s Albany Bureau.

Assemblyman Gary Pretlow, D-Mount Vernon, who heads the state Assembly’s Racing Committee, is seeking the financial assessment, saying he is concerned the new facilities in the Southern Tier, Finger Lakes and Albany area may ultimately seek state help to improve their bottom lines. 

This, of course, should concern all New Yorkers; the lion’s share of the tax money coming from these facilities has been designated for the state’s education system. And it also impacts local governments that get a piece of the revenue to help pay for programs and services.

Amid this backdrop, Empire Resorts also is set to open a $1.3 billion casino and destination resort next year on the grounds of the old Concord Hotel in Sullivan County. That site is now identified as Resorts World Catskills and is expected to open in March 2018. Resorts World Catskills will be the only casino in this region and, with its close proximity to the New York City market, there is reasonable expectation it will fare well. But these latest casino figures also show why the state selection board made a wise choice not to locate two casinos in the Hudson Valley to add to the competition. There also has been an explosion of online gaming and other gambling-related activities that have eaten into the market.

The governor’s office and state Gaming Commission are downplaying any concerns, pointing out the state’s overall gambling revenue has increased with the new casinos – and that it’s too early to make judgements on how new venues will perform.

Perhaps. But the state will have to continue to make these assessments. Voters have authorized New York to allow the creation of three more casinos, in addition to the four designated for upstate through this change in the Constitution.

DiNapoli and others have urged the state to take a conservative approach to revenue estimates; these latest numbers suggest why that is a prudent approach.