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ALBANY -- The third of four casinos planned for upstate New York opened on Wednesday, bringing with it more than 1,000 jobs and pledging to revive the local economy.
The opening of the Rivers Casino in Schenectady also brought the state closer to the saturation of the upstate gaming market, raising questions about how they will all co-exist.
There are now 16 casinos or racetracks with video-lottery terminals in New York north of New York City. One more, the $1 billion Montreign casino in the Catskills, is set to open next year.
The facilities said they all expect to succeed, but the battle for the gambling dollar between Syracuse and Rochester is increasingly fierce with the opening last week of the $425 million del Lago Casino in the Finger Lakes.
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In that region, there are now six casinos or racinos -- which are tracks with the slot-machine-like VLTs -- between Batavia Downs in western New York and the Turning Stone Casino owned by the Oneidas in central New York.
'I think it’s individual with each of them,' said James Featherstonaugh, the president of the New York Gaming Association, a trade group for the state's racinos, and an owner of the Saratoga Casino Hotel.
'They are convenience casinos, if you will. So it is very much sensitive to the local market.'
Indeed, many of the casinos hope they can simply tap into the market in the 50-mile radius -- each becoming the regional hub for gambling.
'The key is how many people live within 50 miles,' said Jeff Gural, the owner of Tioga Downs in the Southern Tier, which in December switched from a racino to a full casino with table games after getting a state license.
Tioga Downs, which has seen an uptick in revenue since the switch, plans to open a hotel in November to draw in new customers.
But Gural, who put about $150 million into Tioga Downs and also owns Vernon Downs, which has VLTs in central New York, said the casinos need to build cautiously.
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'I think honestly Rivers will be the most successful casino of the four. I think it’s the right size. It’s got a great location,' Gural said. 'I think Tioga is maybe slightly overbuilt, but we should do OK. Lago and Montreign spent a lot of money, and they have to do a lot of business to justify the expense.'
Resort or neighborhood stop
Del Lago, owned by Rochester mall magnate Tom Wilmot, wants to become a tourist destination in the Finger Lakes, while Montreign in March 2018 hopes to lure people 90 miles away in New York City -- reviving the once popular tourism area of the Catskills.
In the Albany area, Rivers and Saratoga are aimig to attract gamblers during the area's busy summer months, aided by the Saratoga Race Track season in July and August.
New York leaders haven't raised much concern about the growing competition: They have argued the risk is on the private owners of the new casinos.
'They will all work,' Assembly Racing Committee chairman Gary Pretlow, D-Mount Vernon, said.
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'The people who spent a lot of money putting these together know what they are doing.'
But they are also operating under the state rules and limits on where the casinos could be built.
In 2013, voters approved a change to the New York constitution that allowed for the construction of privately owned casinos.
Previously, the nine horse-racing tracks -- under in a 2001 law -- were able to have VLTs; there are also six Native American casinos, three owned by the Seneca in western New York; two run by the Oneidas in central New York and the Akwesasne Mohawk casino near the Canadian border in northern New York.
Upstate focus
To drive business to upstate, Gov. Andrew Cuomo and the Legislature passed a separate law to require the first four private casinos to be built upstate -- and gave them exclusivity for the next five years.
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In December 2014, three upstate casinos were picked: in Schenectady; Tyre, Seneca County; and in Thompson, Sullivan County.
Tioga Downs was added a year later as the fourth upstate casino after protests from Gural and Southern Tier leaders that they were left out.
But at Finger Lakes Race Track in Farmington, Ontario County, there's ongoing concern that del Lago will hurt the track -- despite last year getting a lower tax rate to help it. The Finger Lakes track is less than 30 miles from del Lago.
'I do think that area of the state is a little bit saturated, and it’s going to hurt the racetrack at Finger Lakes,' Pretlow said. 'And the racing industry depends on Finger Lakes.'
Cuomo attended the opening last week of del Lago, and on Wednesday he was at Rivers, the $300 million facility on the banks of the Mohawk River.
He has boasted that the casinos are a sign that upstate, after decades of manufacturing declines, is on the upswing
'What was that negative energy and the negative synergy is now a positive energy and a positive synergy,' Cuomo said.
Aiding municipalities
The casino plans have drawn criticism: As states like New York add casinos, some point to the ongoing troubles in Atlantic City, which has closed several of them in recent years.
Three casinos are planned in neighboring Massachusetts, for example.
'In the end, they are not only a moral disaster, in that many times you have people using them who should not be using them, but then you have what just happened in Atlantic City,' state GOP chairman Ed Cox said.
A portion of the revenue from the new casinos -- about $3.3 million a year -- goes to problem gambling, while the state and municipalities get a piece of the profits.
When all four of the private casinos are operational, the state estimates $325 million in annual revenue: $65 million to localities and $260 million for public education.
Local governments have also benefited from the casinos' licensing fees. Between the fees and revenue from the Indian casinos, municipalities received $109 million last year, according to the state Gaming Commission.
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Also, New York's gambling market hasn't shown signs of slowing.
The state's Lottery revenue reached a record $9.8 billion last year, with the racetracks seeing a 3 percent boost.
Now, the downstate facilities -- including Empire City Casino in Yonkers -- want the state to allow them to open as full-scale casinos. Empire City and Resorts World at Aqueduct are VLT parlors, but are by far the two largest in the state.
Empire City said it provided $3 billion to the state's education coffers over its 10 years of operations.
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“We wish these new casinos that same success and are excited to develop a full-scale gaming property in Westchester as soon as possible,' Tim Rooney, Empire City's CEO, said in a statement.
'The economic prospects locally and regionally are endless.”