Tioga Downs Casino Resort, which opened in December 2016, del Lago Resort & Casino, which opened near Rochester in the Finger Lakes region in February 2017, Rivers Casino opened in Schenectady a little later in 2017, and Resorts World Catskills debuted in February 2018, have all posted disappointing revenue numbers, far below what their owners have projected.
All four properties are in dire need of more customers. The three casinos—minus Resorts World—combined fell short of their first-year revenue projections by more than $200 million. Rivers and Tioga Downs have recovered somewhat in the first half of this year, but del Lago’s revenue woes continue, and the property has begun shuffling upper management, bringing in industry veteran Mark Juliano in hopes of righting the ship.
But with Resorts World Catskills, the newest, largest and most expensive casino of the group, not to mention the closest of the four to New York City, undergoing similar struggles since opening in February, it’s clear that New York’s upstate market faces challenges that go beyond experienced leadership.
Along with the four commercial casinos the state is home to seven Indian casinos, 10 VLT casinos at racetracks and parimutuel betting at racetracks and OTBs. In sum, New York is saturated with options for the gambling public, and the surrounding states are no guaranteed feeder market either since the same largely holds true for them as well.
In its first four months, Resorts World Catskills has averaged $11.9 million in gaming revenue, placing the property on a pace for $143 million its first year. Owner Empire Resorts has projected $277 million. Moody’s Investor Service has been concerned enough to reassess the $900 million property’s debt, a hefty $535 million, downgrading it to a “negative” Caa1.
“The issue is not that it’s a bad property,” said Keith Foley, a Moody’s senior vice president who covers gaming. “The issue is market saturation.”
Empire Resorts CEO Ryan Eller says the marketing up to this time has been low key because not all the amenities were in place at the start, but now they’re ready to get started.
“We’ve got an integrated resort in place now and we’re expecting to ramp up our programs and customers very quickly,” he told GGB News.
Of course, it’s still early in the game. The resort’s impressive hotel has opened in stages since the February opening, and a penthouse level with 12 suites will ramp up by the end of the year. An indoor water park and a golf course are set to come on line in the middle of next year.
“They’ll certainly improve themselves when those other things open,” said Richard McGowan, a Boston College management professor specializing in gaming. “There’s a question of how much more casino activity can take place. What we have here is a classic case of over-projection.”