There will be no Triple Crown on the line when the Belmont Stakes is run on June 8, but New York has regularly been in the news this month on the gaming front. First, Gov. Andrew Cuomo announced his framework for destination casinos in upstate New York, then made deals with two tribes offering regional exclusivity in return for revenue-sharing agreements and other considerations. It also looks like an agreement is near with the Seneca Indian Nation, which has withheld revenue sharing payments claiming the racetrack casinos violate the exclusivity clause of its compact. And just this week, Saratoga Casino and Raceway announced a major expansion plan for its property, the largest racetrack casino in the upstate region by net gaming revenue.
Cuomo’s casino plan involves splitting upstate New York into six regions. Three would be exclusive to tribal gaming as long as compacts remain in good standing, although existing racetrack video gaming facilities in those regions would be allowed to remain in place. One destination casino would be allowed in each of the remaining three regions, which include Albany and Saratoga Springs, the Catskills, and an area along the Southern Tier.
Each new casino would have a five-year period of exclusivity when no additional casinos could be developed in the state, giving them the jump on possible casinos in the New York City area. Existing racetrack casinos would continue to operate, although it is expected that Saratoga Casino and Raceway, Tioga Downs Casino and Monticello Casino and Raceway would be serious players in the bidding for the three full casinos.
The deal with the Saint Regis Mohawk Tribe gives 25 percent of its net gaming revenue to the state and provides exclusivity in the North Country (Clinton, Essex, Franklin, Hamilton, Jefferson, Lewis, St. Lawrence and Warren counties). The Oneida Nation agreement allows Vernon Downs to continue as a racetrack video gaming facility, but otherwise provides exclusivity in Central New York (Cayuga, Chenango, Cortland, Herkimer, Lewis, Madison, Oneida, Onondaga, Oswego and Otsego counties). The Oneidas would pay 25 percent of its net slot revenues to the state.
If the Governor’s plan comes to fruition, Saratoga Casino and Raceway would appear to have the upper hand for a full casino in its region, now that popular destinations just to its north are off the table. The property has already been so successful that a $30 million expansion plan was in the works regardless of what the Governor decided to do about casino development. The expansion includes a 120-room hotel with guest spa, indoor pool and lobby bar, a large multipurpose event center and a fine dining restaurant, and would be completed by early 2015.
Saratoga’s casino brought in just shy of $160 million in net gaming revenue during 2012, the most of any racetrack casino in the state outside of the New York City area. Revenues were up 6.2 percent for the year, following a 7.7 percent increase in 2011. The monthly numbers in 2013 are a bit less encouraging, as many of the upstate tracks have had mixed results thus far, even discounting a shorter February. Year to date through April, Saratoga’s gaming revenue is down 3.3 percent.
Meanwhile, the Resorts World Casino at Aqueduct brought in more than $71 million in March, a record for the state. The casino has boasted double-digit gains each month this year (adjusting for the shorter February), far outpacing the other racetrack properties. This performance provides further proof of the obvious - that full casinos in close proximity to New York City, ultimately part of the plan, should produce phenomenal results. That doesn’t bode well for other casinos in the region, many of which are already suffering. And it’s a big reason why New Jersey hopes to revive its casino business through Internet gaming, but that’s a topic for another day.