good at gaming the system: from cash cow to cow chips

When it comes to gaming the political system for tax breaks and special perks, it’s hard to beat the gaming industry. In New York State, there are different rules and tax rates for its full-blown casinos, video-gaming racinos, and Indian casinos. Such factors help complicate the casino industry’s tax-gaming game, making for increased melodrama, campaign contributions, and lobbyist income.

Last week, the Times Union reported, in Harness tracks, racinos, feel the heat from casinos” (by Rick Karlin, June 18, 2017), that:

 Jeff Gural [note: major contributor to Gov. Cuomo and], majority owner of the troubled Vernon Downs harness track and video lottery game “racino” in Vernon, Oneida County, said he would have to close his doors this fall if he didn’t get a tax break.

And, today, the Schenectady Gazette published “2 harness track racinos look to state for relief“ (by John Cropley, June 19, 2017), and noted:

Two harness racing tracks that host electronic casino operations are looking to the state for help amid increased competition from the proliferation of casinos across upstate New York.

One piece of legislation would allow Saratoga Casino Hotel in Saratoga Springs to use 4 percent of its net win for capital improvements.

Another would increase the percentage of the net win retained by Vernon Downs Casino Hotel in Vernon, near Utica.. . .

Both bills have been approved by the state Senate but have been sitting in committee in the state Assembly. The 2017 legislative session is scheduled to end Wenesday.

In response to this year’s crop of Gaming Groveling and Gambits, the Times Union published a Sunday editorial, “No subsidies for the casinos” (premium online content).

The Issue:

Citing financial problems, an upstate gaming venue seeks a tax break.

The Stakes:

Taxpayers should not have to support cash cows that morph into albatrosses.

“Lets be clear what a tax cut means: A loss of revenue that other taxpayers have to make up. It will be what casino proponents insisted would never happen: state taxpayers subsidizing gaming halls that were supposed to be cash cows.”

The TU editorial concludes: “Certainly it’s fair to find equitable ways to spread the benefits so that hard-pressed local economies like Oneida County’s don’t suffer. What’s unfair is to ask taxpayers to continually cover venues for the bad bets they’re proving to be.”

No matter what happens in this Legislative session, I’m betting that billionaire Neil Bluhm’s Rush Street Gaming minions here at Schenectady’s Rivers Casino at Mohawk Harbor are already looking into ways to reduce their gaming and property taxes and gain advantages over their casino and racino competition. That is what they have always done at other casino venues, in good times and bad.  Best bets for Boo-Hooing from Rush Street:

  • using the failure to meet their revenue projections as the justification for seeking a reduction in the gaming tax revenue rate
  • pointing to lower gaming tax revenue rates at racinos and at other casinos (under Legislative compromises meant to aid locations in less populated or poorer areas) as “unfair” competitive advantages for their competitors
  • challenging property tax assessments whether or not they are having financial success

Unlike casino owners elsewhere, Rush Street has made no promise in Schenectady about putting off challenging property assessments. Here’s what the Worster Massachusetts VoteNoSlots group said a couple years ago about Rush Street and taxes:

At each of their four casinos, Rush Street Gaming has either fought to have its property assessment reduced, or threatened to reduce it:

  • As soon as Rush Street opened Riverwalk Casino in Vicksburg, Mississippi, it fought to have its property assessment reduced from $78 million to $30 million.
  • Almost as soon as they opened Rivers Casino in Pittsburgh, they began lobbying to have their property assessment HALVED, and have continued to do it every single year.
  • The city of Philadelphia also was involved in a legal dispute with Sugarhouse Casino over property tax.
  • If the state (of Illinois) approves a Chicago casino or slots at horse tracks, then Bluhm wants to be able to add more slot machines and pay lower tax rates in Des Plaines. “We absolutely need both,” Bluhm said when asked whether he would accept one without the other. “We couldn’t possibly survive. The numbers won’t work. If we just lower tax rates and couldn’t expand, we would be crushed.”

As we reported here when arguing against naming the primary road into Mohawk Harbor “Rush Street,” after failing in their campaign to achieve the 60% reduction in their property tax assessment they had sought in Vicksburg, Mississippi, Rush Street sold their Riverwalk Casino, in 2012, just four years after it opened.

But, Rush Street Gaming doesn’t have to be doing poorly to try to avoid taxes. As reported in some detail just last year at BetterGov.org, in “Rivers Casino’s Jackpot: $1 Million Property Tax Break” (by Chuck Newbauer & Sandy Bergo):

 The owners of the wildly successful Rivers Casino in Des Plaines have received more than $4 million in property tax cuts since opening nearly five years ago, by aggressively arguing that the property was worth tens of millions of dollars less than it cost to buy and build on.

Since 2012, Rivers has reported annual revenues of more than $400 million, after winnings, state records show. Its revenues are twice as large as any of the other nine Illinois casinos.

Despite their success, the Rivers owners claim the value of the casino and parking garage has declined, justifying tax relief. . . .

Tellingly, several successive reductions by the elected Cook County Review Board (from $104 M to $88 M each year) “is not enough” for Rivers Casino in Des Plaines: “The owners have gone to court seeking refunds of taxes paid in three previous years, arguing the assessments are still too high.” Rush Street’s primary owner Neil Bluhm is a well-known contributor and “bundler” in the Democratic Party. Although he did not donate to the Cook County’s elected Board members, his tax attorneys and appraisal firms have given substantial amounts.

The BetterGov.org article also makes a point similar to the Times Union Editors:

Whatever the case, the casino’s gain is their neighbors’ loss. Home owners and other property owners in Des Plaines and some surrounding communities have to pick up the slack to fund budgets for local schools, parks and other local government expenses to make up for the Rivers tax cuts.

Beyond property assessments, Rush Street Gaming is definitely not shy about efforts to change the rules in place when it received its casino license. For example, it has tried strenuously to fend off competition to its successful SugarHouse Casino from a second Philadelphia casino, although the State Legislature had for many years envisioned the second casino. First, it said the State Racing Commission could not re-issue the license after the first licensee failed to get necessary funding. That stalled the competition for years, before the argument was rejected by the State Supreme Court. “Pa. High Court Affirms Propriety of 2nd Philly Casino License” (Law360.ocm, by Alex Wolf). Nonetheless, SugarHouse’s lawyers have raised other issues in court, which have stalled the large South Philadelphia casino project even further. See  “Whatever happened with that South Philly casino?” (Billpenn.com, by Anna Orso, Jan. 6, 2017). Expectations are that SugarHouse and the other plaintiffs will lose again, but its Rush Street owners have “won” several years of added profits by operating as the only casino in that big town.

  . . click for cash cow cartoons & cow chips cartoons 
From Cash Cow to Cow Chips, Are they Too Important to Let Fail in Schenectady? Should Rivers Casino Schenectady start to seem more like a Cow Chip Factory than a Cash Cow, you can count on the local leaders who bet their reputations on the Mohawk Harbor casino to help in efforts at the State and local level to seek subsidies of various kinds to alleviate Mr. Bluhm’s suffering. It would be an amusing drama to watch, if it weren’t so important (and predictable). Stay tuned.

another nadir on the River (with updates & lowdowns)

(update: June 23, 2017): Rivers Casino in Schenectady set yet another new low for revenue generation in the week ending June 11, 2017, its 18th week in operation at Mohawk Harbor. Its net revenues were $2,062,162, down 23% from the prior week, and almost $100K below its previous low-point.

RiversRev23June2017

. . is our favorite Cash Cow becoming a Cow Chip factory? casinocowchips

. . and see, “psst: the casino cash cow has too many calves” (June 21, 2014)

Original Posting

 In its 15th week in operation, Rivers Casino at Mohawk Harbor in Schenectady set a stunning new low for overall net revenues at: $2,129,115, with slots income also the lowest to date, and poker table GRR under $100,000 [$99,503]. Here’s screen shot of its Report for the week ending May 21, 2017, which was posted late due to the Memorial Day weekend:

Meanwhile, at the Times Union, reporter Paul Nelson’s latest article is headlined “Poker winner nets $46k at Rivers Casino” (online May 29, 2017). I do not know whether that is a lot of money for a tournament that Rivers Casino General Manager Mary Cheeks says “attracted 1,095 players from seven states and Canada, exceeding expectations.” Ms. Cheeks is also quoted saying:

 “We had a fantastic turnout for the Capital Region Classic, and we heard a lot of positive feedback from players who have been looking for big poker tournaments in this area for years,”

Of course, this is the same Casino that keeps telling us how satisfied it is with revenues and attendance so far, despite averaging far below, and never yet meeting, the weekly average GRR it needs to make the lowered expectations it projected for its first year in operation.

. . use this short URL to share this post: tinyurl.com/RiversNadir

Poker strategy stumbles along the Mohawk (with updates)

 . . Rivers Casino Poker Room

 Despite good media coverage and optimism for River Casino’s roll-out of daily Poker Tournaments last week (see Times Union & Gazette), Schenectady’s Mohawk Harbor Casino posted record-low weekly revenue numbers for the second week in a row, with generated dollars down for the 7th time in 8 weeks. Total GGR for the week ending April 16, 2017 was merely $2,532,004, down  5.2% from the prior week’s nadir. Indeed, its Poker Table GRR during its first week of daily tournaments went down 12.9% from the prior week. And, slots GRR tumbled another 9.7%. Meanwhile, Capital Region competitor, Saratoga Casino and Hotel saw a 6.0% drop from its prior week’s Net Win numbers.

  •  For more information and discussion about revenues at the Mohawk Harbor Casino, see our posting on April 7, 2017, which has relevant charts and links; short URL: http://tinyurl.com/RiversDown . (Image at head of this blurb is  detail from C. M. Coolidge’s “A Friend in Need”.)

update (April 22, 2017, 12 AM): See “Income falls at Rivers, Saratoga: Gross revenues from gaming off more than 5% in week’s stretch” (Times Union, by Eric Anderson, April 22, 2017), which noted:

For Rivers, it’s the lowest weekly revenue figure since its opening in early February, and it came despite a series of poker tournaments during the week.

The poker room has been popular among casino customers, officials have said.

Observers have suggested that extensive roadwork on Erie Boulevard outside the casino may have played a part in the decline. . . .

The casinos haven’t released attendance figures, so it’s not clear how the restaurant and other food outlets have performed.

follow-up (April 28, 2017): Finally some good news for Rivers Casino Schenectady and those counting on its revenue stream. For the week ending April 23, 2017, GGR were $2,866,673, up 11.6% from last week’s lowest-ever figures. See the Official Weekly Report. A screen shot of the April numbers is immediately below this blurb. The Net Win figures up the road at Saratoga Casino were up 3.9%.

RiversRevs28Apr2017

record decline at Rivers Casino Schenectady

 

For the fifth time in six weeks, week-to-week net revenues at Rivers Casino in Schenectady declined last week. [see the composite Report to the right; and the Official Weekly Report.] The 19.8% fall in revenues, down to $2,897,721, was the largest to date at the Casino, which opened February 8. While Rivers Schenectady saw a significant decline, revenues at nearby Saratoga Casino edged up 1.8% to a Net Win of $2,858,905. (Compare the figures reported March 31, 2017 by the Times Union’s Eric Anderson, here; and click here for our prior revenue coverage)

  •  Rivers also reported its Revenue Tax distributions for February 2017, showing that Schenectady County and the City of Schenectady each received $191,991 as their home community share of revenues paid to the State. The average daily GRR for the opening weeks in February were, however, significantly higher than the daily average since then. Nonetheless, the payment of $191,991 for the 22-day partial month of February would result in an annualized total of $3,185,305. When selling the Schenectady Casino to the Racing Commission and the public, Rush Street (and Mayor Gary McCarthy) projected payment of $4.1 million each (22% more) to the City and the County once revenues stabilized.

. . share this post with this short URLhttp://tinyurl.com/RiversDown

update (Saturday, April 8, 2017): The Schenectady Gazette covered revenue and tax distribution for February and march in an article in today’s paper, “Rivers Casino revenues up in March, still behind projectionsFigures from first full month of operation reported” (Brett Samuels, April 8, 2017). As I wrote in a Comment left at the online webpage for the story (which also suggests other issues needing coverage):

deskdudeThe real news is not that — OMG!! — revenues for a 31-day month were higher than for a 20-day month, but that revenues have been down five of the past six weeks. In fact, the decline last week was 19.8%, while Saratoga Casino had about a 2% increase.

The Gazette article does give a nice summary of the projection shortfall issue (while also suggesting reasons revenues might rise as the year progresses):

If the current pace of just over $200,000 per month continues, the city and county would take in about $2.3 million for 2017, falling well short of Rush Street Gaming’s projections submitted in its 2014 application with the Gaming Commission. . .

That economic impact analysis, which included five-year projections for gaming revenues, estimated the low-end gaming revenue for the city and county would be about $3.3 million each for the city and county.

In preparing its 2017 budget, Schenectady County used the low-end revenue estimate, $3.3 million, and pro-rated it to a March opening. That would leave the county expecting about $2.75 million in casino revenue this year.

Rivers revenues down 4th straight week (with updates)

 Schenectady’s Rivers Casino at Mohawk Harbor faced its first major snow storm last week. The storm virtually closed the City down on Tuesday, March 14, but roads were serviceable the next day, with the nearby Stockade neighborhood (especially Front Street, which borders the casino complex) enjoying its quickest snow removal experience in memory. It is no surprise that Gross Gaming Revenues at Rivers Schenectady declined from the prior week’s record low figures, making it four straight weeks of falling GGR. In fact, the 1% reduction was less severe than I had expected, with $2,757,738 generated. The image at the head of this paragraph shows the weekly totals since Rivers opened in Schenectady on February 8.

The distribution of the revenues looks interesting to this non-expert observer:

  • slots revenues were down 17.6%, falling to $1,571,972
  • table game revenues were up 44.6%, soaring to $1,060,418

Did grandma decide to stay home, while the high-rollers were snowed in at Mohawk Harbor overnight the day of the storm?

. . you can find the weekly Rivers Casino revenue stats, usually refreshed on Friday morning, here: http://tinyurl.com/RiversSchdyRevs

. . see what do those Casino revenue figures mean? (

newspaper update (Monday, March 27, 2017): As of 1 PM today, the Gazette continues to avoid mentioning this streak of weekly revenue declines. Thankfully, the Times Union did report the revenue picture today, in “Area casinos had another down week” (by Eric Anderson, online on March 27, 2017). The TU notes that Saratoga Casino saw its third weekly decline, and “Rivers reported its fourth consecutive weekly decline”, noting “The most recent figures likely were depressed by a massive snowstorm that struck the Capital Region March 14.” TU also explained that even Rivers Casino’s best week so far does not meet the weekly average it would need to make their “stabilized” 2019 revenues projection. 

  • RiversSchdyRevs31Mar2017 update (March 31, 2017): For the week ending March 26, 2017, Schenectady’s Rivers Casino had its first increase in revenues in over a month. The total GRR, $3,613, 222, was the best take for the Casino since its first full week, with a 31% increase over the prior week’s dismal GRR, which was the Casino’s lowest ever. As you can see from the composite below of the Rivers Casino Total Gross Gaming Revenues Report, there were significant increases in slots (16%) and table games (57%!), with poker revenues up almost 9%.

RiversCasinoRevs31Mar2017

As expected, the Schenectady Gazette never reported that Rivers Casino had four straight weeks of GRR decline, but I’m betting this increase will be up soon at their website and in Saturday’s hardcopy newspaper.


LadyBug14Mar2017 p.s.
“Walkable Schenectady”?  Our Mayor likes to brag about our “walkable City”, as do the gents at Metroplex. A week after the mid-March snow storm ended, many crosswalks in downtown Schenectady were clogged at the curb with snow, and many sidewalks in downtown Schenectady were left unshoveled. The snow had stopped Wednesday morning, but on Saturday evening, March 18, I made the mistake of trying to walk from my Stockade home up Front Street, to Mohawk Harbor and then up Erie Blvd. I spent a lot of time precariously switching from sidewalk to street.

 Front St. at N. Church. . DSCF2601

I was particularly surprised at how difficult it was to be on foot near the Casino.

DSCF2589 . . [L] this is what confronted you on foot at the intersection of Front Street and Rush Street, if you wanted to head toward Erie Boulevard.

DSCF2595 . . DSCF2597 . . Once at the rotary at Rush St. and Erie Blvd., you had some snow climbing to do to get to the Nott St. side of the rotary, with an unshovelled sidewalk once across the street.

DSCF2599-001 . . [L] Most daunting was trying to head south on Erie Boulevard on foot. Once past the overhead walkway, virtually all of the sidewalk had the full 19 inches of snow, all the way to Stewart’s, at Green Street. If a business had shoveled at its driveway, the curb at the intersection and crosswalk was piled even higher. I was left to walking at sunset on the side of a very busy road, with fast traffic and lots of puddles. Not pedestrian-friendly, Mr. Mayor. Not a good introduction to visitors on the ease of getting from Mohawk Harbor to our much-touted downtown Renaissance.

another big drop in Casino revenues

 The numbers are out for the fourth full week (ending March 12, 2017) of revenues generated at Rivers Casino at Mohawk Harbor in Schenectady: just under $2.8 million; the worst week yet; and no snow storm to blame.

  • a 21% drop from the first full week
  • 9.9% less than last week’s numbers, which were down 11% from the prior week, and were never reported by the Gazette

  • The weekly average needs to be $4.3M to reach the $223 million annual gaming revenue number so often repeated by Mayor McCarthy, which is the projection for the “stabilized” 2019. So far, the four full weeks have averaged about $3.2 million, which won’t even generate the significantly lower first-year projections of the Casino and County.

  • Today’s Gazette tells us there are changes coming to Rivers Casino due to patron requests and frustrations. Changes in works at Rivers Casino, including poker tournaments: Some customers have expressed frustration”, by Brett Samuels, March 17, 2017). It would have been a nice place to mention the slide in revenues, rather than: “[I]t has continued to net at least $3 million per week in gaming revenue and pulled in $10.8 million in its first month from slots and table games after payouts.”

On St. Patrick’s day, we must ask our good boyo Mayor Gary McCarthy if anyone but leprechauns believes in magic pots of gold?

 . . from Hallmark

10 P.M. Update: The Times Union has covered the newest revenue figures, in the online article “Revenues drop again at Rivers Casino in Schenectady” (Eric Anderson, March 17, 2017). The piece gives some context for the numbers:

So far, the casino hasn’t reached the $4.28 million weekly average figure that was projected in an economic impact study by New Orleans-based The Innovation Group.

But that figure was for 2019, and by then the casino hotel should be open and construction at the neighboring Mohawk Harbors completed.

It’s also not clear whether bus tours to the casino have yet started. That also can be a lucrative source of revenues.

. . find the weekly Rivers Casino revenue stats here: http://tinyurl.com/RiversSchdyRevs

. . and, see our post: “what do those Casino revenue figures mean” (March 5, 2017)

what do those Casino revenue figures mean?

OPEN LETTER to the SCHENECTADY GAZETTE and Other Capital Region Media

. . and see March 10 update below . .

. . and “another big drop in Casino revenues” (March 17, 2017)

Dear Schenectady Gazette and Local Media editors and reporters:

ch6casinorev We need some context, please, when you give us weekly (and soon, monthly) numbers about the gaming revenue generated at Rivers Casino at Mohawk Harbor. [E.g., Gazette, TU, WRGB-Ch6News] Gaming revenue numbers are virtually meaningless without background information, such as typical patterns for casino opening revenues, and this Casino’s own projections for annual revenues. This is especially true because Rush Street Gaming will be paying its gaming taxes based totally on the net gaming revenue figures. That is unlike other casinos where minimum annual local contributions have been promised (including Rivers Casino in Pittsburgh, which has consistently fallen short of its projections, and used the shortfall as a reason to request reduced real estate assessment).

  •  images-7Reportage on the second week’s Casino revenue is a prime example of numbers without context. Neither the Casino’s projected revenue nor industry expectations or patterns in the opening weeks of a casino were mentioned. Moreover, the Gazette headline touted, “Report: Rivers Casino sees revenue boost” (Feb. 27, 2017), with the article stating that there was a 24% increase in gross gaming revenue ($33.8 million) and a 16% boost in net revenue ($3.5 million) for the first full week of operation. While it mentioned the snowstorm in Schenectady during the first week, there was no indication of how many days were counted in the first week’s numbers, which included a “soft” by-invitation opening day before the official opening. Nor was there any discussion of the significance of a 16% increase for a full 7-day week, which has 14.28% more days than a 6-day week, and 29.5% more days than a 5-day week. Instead, a prepared statement by casino officials is quoted: “We are pleased with the performance of Rivers Casino & Resort Schenectady during our first full week of operation.”

The Gazette and Mayor Gary McCarthy have consistently used the number of $223 million dollars in annual net gaming revenues for the Schenectady Casino, with a resulting payment of $4.1 million annually each to the City and to the County. $223 million is, on average over a 52-week year, about $4.3 million per week. So far, Rivers Casino Schenectady has posted net gaming revenue of of $3.55M and $3.47M for its first two full weeks of operation, after an opening short week of $3M. 

abacusThe average revenues for Rivers Casino’s first two full weeks, $3.51M, would result in annual net gaming revenues of $183M dollars upon which to calculate its State gaming tax bill. That is 18% lower than the $223M projection, and would mean a significant shortfall for local tax coffers.

 How well do casinos usually do during their opening weeks? I’ve been hoping the Gazette would tell us.


sleuth Last night, I spent about 30 minutes Googling casino opening revenues, and looking at the first two examples that came up, I discovered that the new mega-casino project MGM National Harbor, located on the Potomac River in the D.C. suburbs of Maryland, generated about $49M in gaming revenues in its first month (January 2017). Maryland’s racing commission hired two consultants to project annual revenues for National Harbor. One predicted $512M and the other predicted $575M. Annualized, National Harbor’s first month revenues are about $576 million dollars, which is on track to meet even the higher projection.

plungegraphsmY

trends?

 Similarly, in July 2015, Plainridge Park Casino near Boston generated $18.1 million in its first month of operation. Plainridge predicted an annual gaming revenue of $200 million. Annualized, $18.1M would total $217.2M, a nice 8% increase over the $200M projection. (see MassLive, Aug. 15, 2015) Note, however, that early success does not necessarily mean a casino will continue to generate comparable numbers.  Plainridge Park fell far short of its projections for the entire year.

 Shouldn’t the Gazette help its readers (and our Pollyanna-like political and business leaders) understand how Rivers Casino is doing compared to its projections, and historic revenue numbers for similar casinos? If Schenectady’s “Newspaper of Record” does not do that, I hope other media members less attached to Rivers Casino (and City Hall, Galesi Group, and Metroplex) will do some investigation, or at least basic research.

 In contrast to the Gazette Tilt we have pointed out frequently at this website (recently, as to likely incidents of crime), the Albany Times Union has taken the lead over the past couple of years on many topics relating to the casino and Mohawk Harbor, Schenectady’s City Hall, PILOTS, etc. I hope it will continue to play that journalistic role, and perhaps spark some responsible journalism and competitive motivation from the Gazette and other media outlets.

. . share this post with this short URLhttp://tinyurl.com/CasinoOpenRevs

  • P.S. What about attendance numbers? How is Rivers Casino doing compared to its projection of 7500 weekday and 10,000 weekend visitors? In July 2014, the TU editorial board was a bit skeptical of those numbers. Follow-up would be nice, as patterns emerge with more moderate weather.

newspaper update (March 10, 2017): This evening, the Gazette posted an article online titled “How Rivers Casino’s 1st month revenues compare to projections“, by Brett Samuels, with a comparison of Rivers Casino’s February revenues and tax payments, covering 20 days, with its first-year projections.  After noting that “the city of Schenectady and Schenectady county received $191,991 each,” for the first twenty days, the article points out that:

“[I]f the city and county each received $275,000 per month in gaming revenue for the next 10 months, it would total about $2.9 million in gaming revenue each for all of 2017, falling short of the casino’s own initial projections.”

. . . “In preparing its 2017 budget, Schenectady County used the low-end revenue estimate, $3.3 million, and pro-rated it to a March opening. That would leave the county expecting about $2.75 million in casino revenue this year.”

The article also points out that “There are a few factors still at play that could influence casino revenues the rest of the year,” and says that the opening of the casino’s luxury hotel, and completion of luxury apartments, and office and retail space this summer will draw more people to the site. [We continue to wonder just who wants a luxury apartment abutting a homely and hectic casino site.]

Here is a screenshot we put together from the Rivers Casino revenues document at the NYS Racing Commission, showing its revenues through its third full week,ending March 5, 2017. Its third full week showed a 10%+  net gaming revenue decline.

RiversCasino05Mar2017Revs

  • Late each Friday afternoon, you should be able to see the latest figures from the prior week, on the Racing Commission site, at this link: http://tinyurl.com/RiversSchdyRevs.

plungegraphsm follow-up (March 12, 2017, 3 PM): As of this point in time, the Gazette has not reported the significant drop in gambling revenue at Rivers Casino in its third full week of operation, which is mentioned immediately above and shown in the screenshot. The Gazette did report on the weekly revenue reports to the Racing Commission each of the past three weeks. Friday evening at about 8 PM, the Times Union posted the numbers, in a brief staff report headlined “Double-digit revenue decline at casino, racino” (March 10, 2017), saying “Rivers gross gaming revenue fell nearly 11 percent to $3,094,804 in the week ending March 5 from $3,472,354 a week earlier. At Saratoga, the net win fell nearly 14 percent to $2,845,411 in the week ending March 4 from $3,302,242 the week before.”

our concerns continue as license granted for Schenectady Casino

The NY Gaming Commission granted licenses for three Upstate casinos yesterday: Rivers Casino at Mohawk Harbor in Schenectady, Lago Resort and Casino in Tyre, Seneca County, and Montreign Resort Casino in Thompson, Sullivan County. See “License for Schenectady casino, two others approved” (Albany Times Union, Capital Confidential, Rick Karlin, Dec., 21, 2015); “Schenectady, two others awarded casino licenses” (Schenectady Gazette, Haley Viccaro, Dec. 21., 2015); “NYS Gaming Commission grants Schenectady casino a license” (News 10, WTEN, Mary Wilson, Dec. 21, 2015).

For some, it may seem grinch-like for us to withhold praise for the Schenectady Casino and to fail to wish it the very best success. Nonetheless, while we do not begrudge people who needs jobs supporting the Casino, we fear that its negative impact on the lives of the residents of Schenectady and of the Casino’s frequent customers and their families far outweigh the shaky revenue benefits that may come from the project, and we cannot endorse the faulty public policy that uses gamblers’ money to offset local property taxes.

In a nutshell, because we believe Rivers Casino cannot be a great revenue success without draining much-needed dollars from the financially vulnerable members of our community and creating significant numbers of problem gamblers, we cannot hope that it is a rousing success. 

The many postings listed in the Right Margin of our Homepage  (and on our Issues page), and our September 2014 Statement in Opposition, explain our concerns, none of which have in any way been diminished by the actions or words of the McCarthy Administration or Rush Street Gaming.

Last year, when the Schenectady casino application was chosen by the Location Board, we stated:

We especially hope that local government and groups will work to

  • reduce the harm caused to families and the community by excessive gambling by persons without the financial ability to sustain significant losses
  • assure that various types of expected street crimes will not increase around the casino or overflow into neighboring communities
  • prevent environmental damage caused by increased traffic, light pollution, flooding hazards, threats to historic buildings, and lost enjoyment of riverfront resources
  • protect the Historic Stockade neighborhood from an increase in traffic that will almost surely reduce the quality of  life in the neighborhood, and threaten the integrity of its historic structures
  • ensure that the local entertainment and leisure business community is not harmed by the many competing elements that are part of the casino project or partnering with Rush Street Gaming
  • ensure that the casino operator cooperates with experts educators to keep problem gambling from infecting young potential gamblers

We members of Stop the Schenectady Casino and our allies in opposition to the casino hope to work in good faith with government and community leaders, along with the casino operator, to gain the most benefits for the community from Rivers Casino at Mohawk Harbor while producing a minimum of negative effects.  If the casino is indeed a reality, we need to turn our efforts from a short-term “fight” to try to stop a casino from being located in Schenectady into a longterm “mission” to make Schenectady the first city to avoid the social harm that comes with any urban casino.  That is a goal that both casino proponents and opponents can surely agree upon and unite their talents and resources to meet.

Here are three primary reasons for our continued concern that the problems and issues we have presented will not be adequately addressed by local government, and will need constant vigilance from those who want to protect Schenectady from casino-made problems:

  • Casino Town: Mayor Gary McCarthy and the various arms of City government have turned Schenectady into a Casino Town, where Rush Street and Galesi get whatever they ask for (and more) and are not pressed to make any commitments beyond the gambling revenue taxes Rush Street will be obligated to pay to the State, and various City and County fees and taxes. See, e.g., “Rush Street’s Giveaways” [to other cities], and “Planning Board hands Casino Gang a Blank Check“.
  • See No Evil. Both City Hall and our primary local newspaper, the Gazette [see, e.g., “Rigging the News“] refuse to acknowledge the likely negative impacts of the casino and therefore to call for necessary counter-measures and mitigation funds from Rush Street (such as the protocol for setting up a Problem Gambling Prevention, Outreach and Education Program in the Host Community Agreement signed by Lago with the Town of Tyre and Sullivan County; see our Lago Info page).
  • Shaky Revenues. We have been saying for a year and a half, long before Moody’s recent affirmation of the negative outlook, that the casino marketplace is over-saturated and that revenues are Unlikely to Come Close to the Rosy Estimates. (see this posting) In addition, Rush Street traditionally over-estimates likely revenues in its applications for casino licenses. If there is a revenue shortfall, and even Mayor McCarthy now suggests that part of the casino revenue stream to the city will be needed to cover any negative impacts of the casino, what will be left to bring down property taxes, the primary reason Schenectady residents have been willing to take a chance on having a casino in our community?

Finally, for now, we invite you to check out the interactive map presented by K. Hume yesterday in the Gazette Editor’s Notebook, K. Hume. It should give pause to casino boosters who believe the Rivers Casino will somehow attract big money gamblers, or even the comfortable middle class, from afar (or even from across the State), and that Schenectady’s casino will buck the reality that most regular urban casino customers come from within a 25-mile radius, with relatively few people staying overnight (see our opening post last year). The Gazette map allows you to compare Schenectady’s casino with its coming competitors in Tyre and Thompson County, presenting an image of the Lago and Montreign casino resorts and basic numbers (click on each for a larger image):

LagoFacts . . . MontreignFacts

above: Lago in Tyre, Sullivan County [L] and Montreign Resort Casino 

SchdyCasinoFacts

If you were going to take your significant other or family on a special casino jaunt or vacation, and were willing to go more than 25 miles, would you choose Lago or Montreign, which look like casino resorts and have far larger project investments, or would you be attracted by the design of Mohawk Harbor’s Rivers Casino in exotic Schenectady, which continues to look like a shopping mall? (See image on the right.) Neither our Mayor and Planning Commission, nor Metroplex, were willing to insist that Rush Street give Schenectady a casino complex as attractive as those it has proposed in many other communities. See “Why does Schenectady get Rush Street’s scraps?“.  Once the novelty of Schenectady’s casino is gone, who do you think will be losing their money at Mohawk Harbor?

follow-up (Feb. 7, 2017): The actual constructed casino is even less impressive than the rendition shown just above to the right. See http://tinyurl.com/CasinoChoices for comparisons to its Upstate casino competition and related musings.

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the unpromising future of casino gambling

update: Cuomo on Declining Revenues (July 16, 2014)  Gov. Andrew Cuomo, when asked by reporters yesterday his reaction to predictions of reduced casino revenues due to oversaturation in the Northeast gaming market, responded (in “Cuomo: Size of NY casino play depends on investorsCapital New York, July 15, 2014) :

abacus “The private market, which reads Moody’s, which does this for a living, which is going to invest their money, will make a determination as to what scale and scope the market can support. And they will then build the buildings and employ people and run the business because they think it’s a good business to run.”

The Governor went on to say, “I’m sure they will propose what they believe will be successful.” Cuomo apparently was not concerned, as he told the reporters, “The state isn’t building any casinos. The state isn’t spending any money here, right? These are private companies which normally know what they’re doing.”

The questions for the Governor came at a conference in Niskayuna, where he was announcing the creation of a $500 million power electronics consortium led by General Electric in Albany that would give companies a a place to research and develop important new technologies. The State would pay $135 million to build the infrastructure for the consortium.  If he wasn’t asked at the press conference, we’d like to ask the Governor:

  1. checkedboxs Shouldn’t the Gaming Facility Location Board pause its review of casino applications and ask the applicants to reassess the “scale and scope the market can support” and to adjust their proposals, in light of the experts’ downward predictions? And,
  2. Why take a risk with the financial, fiscal and social problems caused by gaming, when Upstate development can be based on future-oriented, productive industries such as the technology represented by the Power Electronics Consortium?

[original posting]

plungegraphsmY There’s been a flood of recent articles and information pointing to the increasing unlikelihood of any casino fulfilling the glowing promises of revenues and resulting tax reductions and jobs made by its boosters.  For example, since we wrote “psst: the casino cash cow has too many calves” on June 21st, we’ve seen:

  • Moody’s downgrades U.S. gaming industry“, TU Capitol Confidential (July 1, 2014, by Benjamin Oreskes”)    Moody’s report notes a “strong indication that U.S. consumers will continue to limit their spending to items more essential than gaming, even as the U.S. economy continues to improve.”
  • Wait on casino licenses” (Albany Times Union editorial, July 6, 2014).  Here’s part of their discussion:

“These pessimistic prognostications merely underscore what is already known in New York. A lot of people will have to spend a lot of money at the new casinos if they are to deliver what those who pushed the state constitutional amendment had promised: job growth, increased school aid and lower property taxes. Developers of the proposed gaming resort for Schenectady, for example, predict attendance there would be around 7,500 on weekdays and 10,000 on weekend days. It’s hard not to be skeptical.

plungegraphsmBlack “The problems in other states suggest that the long-term success of New York’s planned casinos is dubious. And when casinos fail, all you have left is unemployment, empty buildings that can’t pay taxes and calls for a government bailout to rescue a struggling industry.”

  • Trump Plaza Casino In Atlantic City Expected To Close, Owners Say” (Huffington Post/AP, July 12, 2014):  “Atlantic City’s crumbling casino market disintegrated even further Saturday as the owners of the Trump Plaza casino said they expect to shut down in mid-September. . .  . If Trump Plaza closes, Atlantic City could lose a third of its casinos and a quarter of its casino workforce in less than nine months.”
  • Gambling on Casinos in New York” (New York Times editorial, July 13, 2014): “A five-member state board appointed by Gov. Andrew Cuomo is supposed to choose four sites and the companies that can build on them by this fall. This seems much too hurried. As Moody’s is warning, it is time to beware of all the promotional hoopla and realize that casino gambling does not always deliver on its promise.”
  • Fred LeBrun: “Minds once lost can be found again” (Albany Times Union, July 12, 2014): “We plunge ahead without so much as a nod from our leading politicians that wagering on casinos as an economic development tool may be a sucker’s bet and that just maybe we ought to take a harder look at ‘none of the above’ for the time being, whether there’s now a constitutional amendment in place allowing casinos or not.

    . . . “But not a peep. It’s a credit to how much can be bought in New York state for the $11 million the gaming industry spent in lobbying the same top pols.

    plungegraphsmMatte

    “It’s predictably annoying that our State Gaming Commission continues to take a strong stand in defense of the gambling crowd. It’s become the industry’s prime booster. . . .

    “What’s bothersome about the boosterism is that the Gaming Commission is also by statute the regulator of all gambling in New York. Its pronouncements show bias, which is at the very least inappropriate, unwise and not a confidence builder for the commission’s broader and thornier mandate to do what’s best, gambling-wise, for all New Yorkers even if that could ultimately mean saying no to everybody.”

    – each of the above articles is worth reading in full –

threemonkeys So, what are the unflinching boosters of the Schenectady casino thinking these days?  Mr. Mayor Gary McCarthy?  Madame Council President King? Stockade Association President Mary D’Alessandro?  The Trustees and Acting President of Schenectady County Community College?  The Me-too City Council members: Mootoveren, Kosiur, Perazzo? The Council’s self-appointed “financial analyst” Carl Erickson? Philip Morris, CEO of Proctors (and chief instigator and negotiator for what we like to call the FairGame Concert Cartel)?

How big of a gamble are the casino cheerleaders willing to take?  How do they weigh the self-interested promises of Galesi Group and Rush Street Gaming against the prospect of the probable increase in crime, problem gambling, and domestic violence, and a decrease in property values and the livability of the Stockade neighborhood?   Are they willing to accept the soul-deadening tradeoff of adopting a soak-the-poor fiscal policy, and the growth of problem gambling among our elderly and our college students, in the hope of obtaining increasingly uncertain future payments from the Casino, which they hope will appease the City’s taxpayers?  Does the shiny future they predict for Schenectady include the sight of a failing casino project along Schenectady’s riverfront and the inevitable request for tax breaks and financial assistance that we can expect once gaming revenues shrink along the Mohawk?

smallquestionmark Perhaps the most important question is: Do any of the so-called leaders mentioned above have the courage to stand up and ask the Gaming Facility Location Board to reject the Schenectady casino proposal, or at least to put off granting any license for the Capital Region, until it is much more certain that the jobs and revenue projections are realistic, given the tidal wave of negative predictions about the industry’s prospects?

Don’t forget: the Location Board has the power to reject all of the applications if none of them appears to meet the goals and requirements set up in the enabling statute and the Request for Applications.

As is stated in Section IV. A of the Request for Applications to Develop or Operate a Gaming Facility in New York State [Adobe pdf. version] [“RFA”] (at page 19):

In accordance with PML Section 1314.3, “Within any development region, if the commission is not convinced that there is an applicant that has met the eligibility criteria or the board finds that no applicant has provided substantial evidence that its proposal will provide value to the region in which the gaming facility is proposed to be located, no gaming facility license shall be awarded in that region.”

And, See RFA Sec. III  [at 17]

M. State’s Reserved Authority.

In addition to any authority set forth elsewhere in this RFA, the Board reserves the authority to:

3. Amend the RFA and direct Applicants to submit modifications to their Applications accordingly;

5. Reject any or all Applications received in response to this RGA, and reissue a modified version of this RFA;

6.  Withdraw the RFA at any time, at the sole discretion of the Board.

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psst: the casino cash cow has too many calves

toomanycalves

too many calves!

 An article in the Wall Street Journal this week revealed the Big Secret that everyone who’s done a little research, or just reads a newspaper regularly, already knows:  The great expansion of casinos in the Northeast over the past decade is “causing upheaval in the region.”  “Casino boom pinches northeastern states” (Wall Street Journal, June 19, 2014)  Indeed:

“States that adopted gambling earlier than their neighbors, such as Delaware, New Jersey and West Virginia, are watching dollars drain away, and new projects have some wondering how many facilities the area can support. Twenty-six casinos have opened since 2004, fueling a 39% increase in total annual gambling revenue in the mid-Atlantic and New England, according to a study by the University of Nevada, Las Vegas. Within 100 miles of Philadelphia, there now are 24 casinos, a big shift from the early 1990s, when Atlantic City, N.J., enjoyed an East Coast monopoly. At least a dozen more gambling spots are in the pipeline from Massachusetts to Maryland, raising fears in states such as Rhode Island that their casino tax windfall is at risk.

In reaction to the resulting dwindling of revenues:

  • Delaware casinos are asking the State for a $20 million tax break. “Delaware’s proposed tax relief for casinos, which needs legislative approval, would lower the table-game tax rate, eliminate fees and shift vendor costs to the state.”
  • “Delaware officials say declining gambling money—down 29% since fiscal 2011—is one reason the state cut 538 public jobs over the past five years.”
  • Public services have been reduced, in places like Ocean County, N.J., “because of a dip in casino revenues that fund programs for the elderly and disabled.”
  • Connecticut has forecast a 5% decline in state revenue from casinos in fiscal 2016 and a 20% drop the following year, and “Rhode Island is projecting it will lose about $422 million in casino revenue over the next five years, contributing to budget struggles.”

threemonkeys Somehow, the Casino Cheerleaders that have steamrolled approval of the Schenectady casino through the City Council and County Legislature seem oblivious to these trends. Maybe Mayor Gary McCarthy or County Planner Ray Gillen have some secret plan that will make Schenectady immune from the forces that have greatly reduced projections of casino revenues and put overly-reliant government budgets at risk.  As the casino cash cow is sucked dry by all those hungry calves, maybe the ALCO pig can fly and Galesi’s Goose really does lay golden eggs.

update (July 1, 2014):  Yesterday, the same day that 16 applicants seeking licenses for 17 UpState casino licenses dropped boxes and flashdrives with their final Applications to the Siting Board, with all their rosy predictions, Moody’s downgraded the outlook for the U.S. gaming industry from “stable” to “negative”.  See “Moody’s downgrades U.S. gaming industry“, TU Capitol Confidential (July 1, 2014, by Benjamin Oreskes”)    Moody’s report notes a “strong indication that U.S. consumers will continue to limit their spending to items more essential than gaming, even as the U.S. economy continues to improve.”

follow-up (July 8, 2014): Noting Atlantic City casinos that have recently declared bankruptcy or closed, along with the Moody’s report discussed above, and the Comptroller’s words of caution (in “DiNapoli: Gaming Revenue Plays Increasing Role In State Budget”  (NYS Comptroller Report, May 2014), the Albany Times Union‘s editorial board said on Sunday that the Siting Board should “Wait on casino licenses” (July 6, 2014).  Here’s part of their discussion:

“These pessimistic prognostications merely underscore what is already known in New York. A lot of people will have to spend a lot of money at the new casinos if they are to deliver what those who pushed the state constitutional amendment had promised: job growth, increased school aid and lower property taxes. Developers of the proposed gaming resort for Schenectady, for example, predict attendance there would be around 7,500 on weekdays and 10,000 on weekend days. It’s hard not to be skeptical.

“The problems in other states suggest that the long-term success of New York’s planned casinos is dubious. And when casinos fail, all you have left is unemployment, empty buildings that can’t pay taxes and calls for a government bailout to rescue a struggling industry.”

For more on this topic, see and our compilation posting, “the unpromising future of casino gambling” (July 14, 2014).