Catskills Prove No Panacea For Casinos
For those people who believe that legalizing and regulating casino gambling is a cure for the financial ills of a particular state, or who are fully convinced that there is an automatic windfall to found in blackjack, dice games and slot machines, a study of the experiences they’re having in the Catskills is worth a long look.
The problems endured by Empire Resorts, which operates the Resort World Catskills Casino in Monticello, NY indicate that a different perspective is definitely needed.
The New York State Gaming Commission Wants To Reduce Slot Machines?
When you have a casino in New York, it’s supposed to be a license to print money, right? Well, for the last two quarters, Empire has filed a total of $73 million in losses. In what might even be considered an artificial maneuver, they have actually petitioned the New York State Gaming Commission to be able to reduce the number of slot machines that casinos are required to have on the floor, which would increase the “win per unit” and offer the impression – the illusion, if you will – that the casino is doing better.
So what has happened to cause all this trouble? Well, much of it can be attributed to the mad rush on the part of most states to gobble up their share of the gambling market – something that has gotten even bigger because of the Supreme Court decision that overturned a federal law and enabled sports betting.
What has been established is an atmosphere where, especially in the Northeast, casinos in one state are invariably close to those in another. And there is a certain cannibalization that takes place because of the saturation of the market. The bottom line is that it’s not so easy anymore.
It’s Not Just New York, It’s New Jersey & Pennsylvania?
On top of that, if states don’t act quickly, they run the risk of being at a disadvantage. That’s what happened in New York, where they were late to the table in legalizing casinos. And a bill to legalize sports betting through mobile devices has still not been passed, which means that neighboring states – like New Jersey and Pennsylvania – are benefiting from the action.
Disadvantages that Resorts World Catskills Have Against The Tribal Casinos?
There is also an embedded disadvantage that casinos like the Resorts World Catskills have against the tribal casinos in the state of New York – they are paying higher taxes on their games. So they have naturally been lobbying to get lower rates.
And depending on where one is in the state, customers could get siphoned off by any number of places. Of course, there are the two major tribal casinos in Connecticut – the Foxwoods Casino and Mohegan Sun Casino – not to mention a new Wynn casino in Boston and MGM’s casino in Springfield, MA. And the tribal interests of the Mohegans and Pequots are set to expand in Connecticut.
There is a campaign to induce lawmakers to approve mobile sports betting in the next session, so some of the New York casinos can start catching up. And there is talk of having at least one, and possibly three casinos in New York City or right outside of it.
And that is another subject of widespread discussion – location, location, location. The Catskills were once a very popular destination for tourists, particularly in the summer. And it was hoped that the casinos could help revive the area. That has not been the case.
Industry analysts point out that casinos that hope to be successful in the future have to be built in close proximity to a major population center, simply because they would be so accessible to potential customers who could commute, and where being a “resort destination” wasn’t so critical.
So now Empire Resorts is seeking a solution that is “the best alternative available to Empire’s stockholders,” partnering with Genting Malaysia to buy the shareholders out, effectively making themselves a private company. But that doesn’t the “geography” of things, which has now served to work against them.