New casinos in NY will create new revenue in evolving market
ALBANY, N.Y. (AP) — New York is poised to diversify its gambling revenue streams yet again in an ever-shifting market.
On Monday, state regulators are expected to license three new casinos in upstate New York, a region that already has a dozen horse-track "racinos" and Indian casinos. The move fits a longstanding pattern of New York officials finding new ways to cash in on gambling — like approving video lottery machines at ailing horse tracks or expanding into multistate lotteries as Lotto sales dropped.
Analysts believe the market is too crowded for the casino expansion to create a huge revenue jackpot for New York. But it could help.
"Limited growth, that's the way it's been nationally for the last five years and New York doesn't seem to be that much different than other states," said Bennett Liebman, a gambling policy veteran who is now a government lawyer-in-residence at Albany Law School. "There is no reason to think it's going to be any different, even with additional casinos."
Racinos have helped increase lottery revenue in the last decade, especially with the 2011 opening of Resorts World Casino New York City. With more than 5,000 electronic slots and table games, Resorts World is the closest thing to a Las Vegas-style casino in the nation's largest city, and it accounts for more than $4 out of every $10 brought in by racinos statewide.
While lottery aid has hovered around $3 billion over the past five years, Gov. Andrew Cuomo's administration was able to tap another stream of gambling revenue in 2013 under deals with the tribes running New York's five Indian casinos.
The Oneidas agreed to begin paying a share of their casino slots revenue, while the Senecas and the Mohawks resumed making payments they had halted amid complaints of unfair competition. Those deals added $161 million to state and local coffers last fiscal year.
Now the state is on the brink of another gambling revenue bump as regulators consider licenses for four casinos in the Catskills, the Southern Tier, Schenectady and the Finger Lakes. The three license decisions expected Monday will be followed later by a ruling on the Southern Tier casino, which was approved in a second round of bidding.
The Cuomo administration has previously estimated new casinos could bring in more than $300 million annually to governments.
Still, it's not clear how much the new casinos will siphon business — and with it tax revenue — from New York's existing casinos. This has been a particularly heated controversy involving the planned Lago Resort and Casino in the Finger Lakes and its potential competitors.
The market also is getting crowded in neighboring states. Moody's Investors Service noted in a report last month that New York's casino expansion is part of $5 billion in growth expected in the Northeast over the next few years.
Beyond casinos, one potential stream of lucrative gambling revenue could come from daily fantasy sports games like those run by FanDuel and DraftKings. The two industry leaders take in an estimated $55 million in bets in New York alone. But state Attorney General Eric Schneiderman claims their businesses are illegal gambling operations and a judge has temporarily banned them from taking bets from New Yorkers.
Assemblyman J. Gary Pretlow, who leads the Committee on Racing and Wagering, predicts that New York will end up legalizing and regulating daily fantasy sports — no matter how the court fight turns out. Pretlow said taxing daily fantasy games would keep them on equal footing with other forms of legal gambling and would help pay for the regulators to make sure the games are being run fairly.
"I want to make sure the games are honest and the people of New York are being protected," Pretlow said.