Catskills Casino Hemorrhaging Money But Hanging On — So Far
All was quiet at the Resorts World Catskills casino on Wednesday afternoon — maybe a little too quiet.
After all, mobile sports betting is coming to New York State next year — and while the casino industry has learned that fears of cannibalization were overblown, that doesn’t mean it will help land-based casinos, either.
That’s especially true in New York, where unlike in many states, the mobile sports betting apps will not have to find a willing casino (or racetrack) partner to get a license.
Perhaps even more ominous is that as soon as December 2022, up to three casino licenses can be issued in the New York City area — and MGM Resorts has 850 million reasons why it believes it will get one of those licenses.
That’s the price paid by MGM in 2019 to purchase Yonkers Raceway and the adjoining Empire City racino, a slots parlor with thousands of machines but no sports betting and no live dealers for table games.
If those gambling amenities are added to the mix at that Westchester County site, will those tour buses that seemed to bring in the bulk of the guests to Resorts World Catskills on Wednesday keep on coming?
High hopes at Catskills casino opening
The New York state gambling expansion law passed in 2013 allowed for up to four casino licenses, but all well north of New York City. Then when the winning bidders were chosen, a pair of candidates just north of the New Jersey border were rejected even though their projected annual revenues were higher.
That seemed like a temporary victory for the $1.2 billion Catskills casino owned by Malaysian gaming giant Genting that opened in February 2018 amid grand hopes.
New York state Lt. Gov. Kathy Hochul — the successor to Gov. Andrew Cuomo should allegations of improper conduct do him in — was on hand to proclaim, “This is the rebirth of the Catskills — you heard it here first. The days of New York state losing casino money to other states is over, I’ve officially declared it over.”
Declared or not, the Meadowlands Racetrack continues to eat New York’s lunch when it comes to sports betting — which is legal at the Catskills property as well, just not as convenient a commute from Manhattan.
The U.S. Supreme Court in May 2018 opened the door for any state to permit Las Vegas-style sports betting, and New York’s 2013 law contained a clause allowing the state’s four commercial casinos — and therefore the state’s tribal casinos as well — to open sportsbooks.
But with no mobile betting at the outset — a miscue finally addressed two weeks ago when Cuomo signed off on a budget green-lighting it — the only place to go in the Catskills region to make a legal bet is at the Resorts World sportsbook.
Yet on Wednesday, the “crowd” at that sportsbook for a Yankees-Blue Jays matinee in mid-game ranged from a high of three spectators to a low of … zero. Either the region doesn’t have many sports bettors, or they are sticking with their traditional illegal bookies and offshore sportsbooks.
Head start — but not long enough?
The seven-year moratorium on the issuance of casino licenses in the New York City area was designed to give the upstate casinos a chance to establish themselves before facing competition to the south.
But all four have failed to meet revenue expectations — none more disappointingly than Resorts World Catskills.
Genting has had to pour in $40 million last spring, another $150 million in August, and $20 million more last month to enable the property to stave off bankruptcy.
An Asian banking firm last month issued guidance regarding Genting, noting that the Catskills property remains a “drag” on the company’s bottom line that “needs to be resolved soon.”
But every further investment by Genting seems to kick any idea of a closure down the road. That result also would be damaging politically to the embattled Cuomo, who made grandiose pronouncements years ago about how the four commercial casinos would be such a catalyst for the economies in those regions.
Fortunately for Cuomo — and casino employees — there are indications that Genting’s pockets have more investment money ahead for the casino.
Also worth noting is the fact that Genting, which shuttered its video lottery terminals at nearby Monticello Raceway after the Catskills casino opened, in February announced its plans to deploy those machines instead at the Newburgh Mall, near the intersection of the New York State Thruway and I-84 and about 45 minutes east of the Catskills site.
A Genting official said at the time that such a secondary gambling site “has, for many years, been part of Resorts World’s long-term vision for Hudson Valley and the Catskills. It will create hundreds of good-paying unions jobs, generate significant revenue for New York’s public schools, and is an important step in ensuring the long-term sustainability of Resorts World Catskills.”
Longterm sustainability? The formula for breaking even in the Catskills has yet to be found — with more competition coming in the next year or two.
There is a likely consolation for Genting, though: Its Resorts World New York City racino in Queens is, along with Yonkers, a prohibitive favorite to gain an upgrade to full-fledged casino status in the next few years.