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We take a look at the New York gaming market and analyse when upstate casinos will be at risk with the arrival of big names in the gaming industry.
Big commercial casinos in downstate New York may have the potential to uproot the upstate gaming industry.
The downstate region is currently home to 11 Vegas-style casinos offering table games, slots, sports betting, and many other entertainment amenities. Seven belong to Indian tribes, and four belong to state-licensed commercial casinos. The gambling monopoly they currently enjoy may end with the arrival of state-licensed giant gambling companies.
Downstate New York does not have any full-fledged casinos because of a state moratorium that will expire at the end of 2023. However, last month the State Gaming Commission initiated a procedure to accelerate the end of the agreement and facilitate the quick entry of three full-fledged commercial casinos. These casinos may appear in Long Island, New York City, or the neighboring counties of Putnam, Rockland, and Westchester.
The nearest casino to New York City is the Resorts World Catskills Casino, established in February 2018 in Sullivan country, 100 miles from Manhattan. Rivers Casino & Resort, Tioga Downs, and Del Lago Resort & Casino are the other three upstate commercial casinos that started operating with a state license in 2016-17.
In 2013, New York voters approved seven full-fledged commercial casinos. But lawmakers decided to award licenses to four commercial casinos in the upstate region and reserve three for the downstate region. The aim was to boost the economy of the upstate region by permitting the four upstate commercial casinos to operate without any competition from casinos in the downstate region.
Despite this, the four casinos failed to generate expected revenues during their early years of operation. Del Lago Resort & Casino and Resorts World Catskills are still unable to pay off their debts.
This means that the NY brick and mortar casinos landscape is facing an inevitable change. The ever-increasing demand for gambling- will bring with it new licensed operators, who are already feeling stiff competition from https://www.pokiepop.org/amongst other popular online casinos.
Competition and Oversaturation
The three new downstate casinos can create tough competition for the upstate gaming industry, which failed to generate expected revenue before suffering the negative impacts of the COVID-19 pandemic. Experts have no doubts that the new casinos will do well, but they will prosper at the expense of the existing upstate casinos. They may also put some of the upstate casinos out of business.
Casino expert Clyde Barrow feels that the three private commercial casinos will suffer more than the Native American establishments. The tribe-owned casinos can handle competition and adapt to changing situations. In 2014, Clyde published a report accurately predicting that the four upstate casinos would face financial problems. Barrow says that New York lawmakers put all the four casinos in sparsely populated, low-income areas, leading to oversaturation in the area.
Reasons to License Downstate Casinos
New York lawmakers decided to accelerate the entry of commercial casinos in the upstate region to boost the state’s flailing economy. The State Gaming Commission estimates that the new casinos can generate $420 million to $630 million in revenue for the state. The licensing fees would bring in an additional $500 million per casino, boosting the state economy instantly.
Two licenses are most likely to go to Resorts World Aqueduct Casino and Empire City Casino, which now operate as electronic game facilities in the downstate region. Converting these facilities into full-fledged casinos wouldn’t be difficult for their parent companies. Las Vegas Sands, Wynn Resorts, and Bally have all expressed interest in applying for the third license.
Simultaneously, many lawmakers are against the establishment of a casino in Manhattan. However, they have no objections to locating casinos in Willets Point, Staten Island, and Long Island.
Barrow feels that the revenue estimate for the upcoming downstate casinos is inflated but substantial. Having studied the larger casino markets of Chicago and Los Angeles, he states that the commercial casinos may thrive on the tourist market only if they prove themselves capable of attracting tourists. He points out that people have different ways of amusing themselves in casinos other than gambling.
Although they have pointed out the drawbacks of licensing downstate casinos, experts feel that the timing is perfect and that downstate casinos can successfully generate the expected revenue.
