Moody's: New Casinos Will Oversaturate Market
A new report warning of the impacts on existing casinos by new entrants in the Northeast was released this week. Current gambling operations say they're doing what's necessary to stay competitive.
The recent announcement by Moody's Investors Service claims new entrants in the Northeast casino boom — including in Schenectady, Springfield and perhaps north of Hartford — will oversaturate the market. It’s a longtime fear among existing gambling operations and echoes admonishments often made by opponents of new casinos.
Moody's says Atlantic City will be hit particularly hard, citing the closure of four casinos last year from the increased competition in New York, Maryland, Pennsylvania, and Delaware.
The agency says Native American casinos in New York will also take a hit.
New York's casino gambling law has opened the door for three casinos that have already been selected for a license. The licenses have not yet been officially issued. A fourth is in the works in the Southern Tier.
Joel Barkin, a spokesman for the Turning Stone Resort and Casino and VP of Communications for the Oneida Indian Nation, says gambling regulators in New York need to be cautious as they move forward.
"New York state needs to be very careful about the future, given the reality that gaming proliferation will only increase around in border states and elsewhere, and how that impacts the economic development in New York state, which is something that we have been very focused on and very vocal on: that we should not, in New York state, be approving any gaming that is going to be cannibalizing existing economic development," said Barkin.
The Oneida nation has run an advertising campaign against the proposed Lago Casino in Seneca County.
Lago, which was one the three projects given the initial green light by the state a year ago, has countered with its own ad.
Lago spokesman Steve Greenberg said, "we look forward to getting our license from the gaming commission and building the best resort casino in upstate New York."
Existing gambling operations have had to make new investments to stay competitive. Barkin says the Oneidas will have a leg-up on the competition as they already offer dining, events, golf, and other amenities at Turning Stone. A new $100 million high-end retail shopping center is also in the works.
Meantime, the Saratoga Casino and Raceway, home to a state regulated Video Lottery Terminal facility, is moving forward with a $34 million hotel expansion.
Racino spokeswoman Rita Cox said the hotel expansion is expected to be completed by June.
"Any time you bring more supply in, that's going to lead to operational changes and challenges," said Cox.
This year, New York allowed the racino to invest in new video gaming machines that would feature "games of skill" including blackjack, roulette, and poker.
25 miles away in Schenectady, Rush Street Gaming and the Galesi Group are constructing the Rivers Casino and Resort and neighboring Mohawk Harbor project. Built on the site of the former American Locomotive Company plant, the projects will feature gambling, a hotel, commercial space, retail, and residential units.
The Moody's report does predict that gaming equipment manufacturers will benefit in the casino boom, with the estimate that 20,000 new slot machines will be ordered. Moody's says the eight new casinos in the Northeast by 2018 will represent $5 billion in construction revenues.