New York Casinos Upstate Will Close When Downstate Casinos Open, Says Expert

Posted on: January 11, 2022, 07:17h. 

Last updated on: January 11, 2022, 01:18h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

The moratorium on New York casinos downstate is set to expire in 2023. Some lawmakers want to proactively issue the three full-scale commercial gaming licenses earmarked for the region early as a way to increase state revenue. But one leading industry analyst warns the forthcoming downstate properties pose grave consequences to the four upstate resorts.

New York casinos licenses gambling
A man relaxes in Times Square in March of 2021. New York casinos with slot machines, table games, and sportsbooks are coming to the nation’s largest city. (Image: Politico)

Clyde Barrow, a political science professor at the University of Texas Rio Grande Valley, has been studying the economic, fiscal, and social impacts of casino gaming for two decades. And he believes when slot machines and table games arrive in the New York City area, the four upstate commercial casinos will see an exodus of play from their properties.

Downstate New York is where the population is,” Barrow explained to the New York Post. “It’s almost inevitable that upstate casinos would close. It’s just a question of when and how.”

New York’s commercial gaming law, passed in 2013, authorized as many as seven land-based casinos with slot machines and table games. Four were allocated upstate, and those locations were afforded a 10-year monopoly on commercial casino gaming in New York in order to build their customer bases without downstate competition.

Unrealized Forecasts

The four upstate casinos in New York — Resorts World Catskills, del Lago, Tioga Downs, and Rivers Schenectady — have failed to live up to their pre-market business forecasts. The shortfall has strained the ability of Resorts World and del Lago to pay down their debts.

Former New York Gov. Andrew Cuomo (D) refused to listen to repeated tax relief pleas from the casinos. His successor, Gov. Kathy Hochul (D), has distanced herself from having personal input on the casino sector. That is due to a potential conflict of interest because of her husband’s employment at Delaware North, a gaming and hospitality firm that operates Finger Lakes Gaming & Racetrack and Hamburg Gaming — two video gaming terminal (VGT) venues. Delaware Park additionally sold Jake’s 58 Casino on Long Island last year for $120 million.

Barrow believes a projection with better odds of coming true is that upstate casinos will close when downstate ones open. Along with the four commercial casinos, upstate New York is home to three tribal casinos with slots and table games, plus six VGT locations.

“Casinos in the New York City area will do very well. But a significant part of their growth will come at the expense of the existing facilities upstate,” Barrow said. “It wouldn’t surprise me if one or two of the existing upstate facilities go out of business.”

RW, Empire City Best Positioned

Two of the three downstate New York casino licenses are presumably spoken for. MGM Resorts’ Empire City in Yonkers and Genting Group’s Resorts World New York City in Queens have respectively been operating VGTs since 2006 and 2011.

If those properties are indeed allocated full-scale commercial licenses, only one permit would remain.

New York Assemblyman Gary Pretlow (D-Mount Vernon), a champion of the gaming industry in New York who chairs the Assembly Committee on Gaming and Wagering, says the state should issue the licenses as soon as possible.

“Issuing full gaming casino licenses downstate has moved to the top of my agenda,” Pretlow explained of his 2022 ambitions.