March 24, 2016
Tom Precious, Blood-Horse
A trade group for New York’s racetrack-based casinos is warning of major revenue drops at their facilities if New Jersey voters this fall approve a referendum permitting two new casinos to be likely located across the Hudson River from New York City.
Michael Wilton, executive director of the New York Gaming Association, which represents nine racinos, said video lottery terminal revenues could fall between 20-25 percent with the possible openings of the casinos in the Garden State.
The hit would be felt on purse levels, breeding fund awards, racetracks, state education aid programs and local governments that all benefit, in varying degrees, from the VLT revenues at the racinos.
In the biggest line of financial fire would be the casinos at Aqueduct Racetrack and Yonkers Raceway, which are both close to the New Jersey border and do not have the same range of gambling offerings of a commercial casino. Hit, too, would be the recently approved commercial casino in Sullivan County in the southern Catskills, which is now under construction; it could face the dilemma of how to convince New York City and other downstate gamblers to drive 90 minutes instead of crossing the Hudson into nearby New Jersey.
“New casinos in northern New Jersey would present a significant threat to New York’s gaming industry, risking hundreds of millions of dollars in critical education revenue and jeopardizing thousands of family-sustaining jobs. New York must ensure that its successful casinos can continue to compete on a level playing field,” the New York Gaming Association said in a statement.
New Jersey lawmakers last week OK’d the placement of a referendum on the November ballot to permit two new casinos to be located 72 miles from Atlantic City, which saw four of its casinos close in 2014. Atlantic City has held a 40-year monopoly on casino gambling in the state, and proponents of the new plan say two casinos near New York City and New Jersey’s northern population centers would be financial bonanzas.
The NYGA represents a who’s who of track and casino operators in New York state. One of its members is Manhattan real estate developer Jeff Gural, who owns two upstate harness tracks with attached casino halls, including Tioga Downs that has a license application with the state to construct a full-blown casino with real slot machines, instead of VLTs, and table games like poker.
Gural, at the same time, is pushing to be one of the two casino developers in New Jersey if the referendum passes this fall. Gural has proposed to put a casino in his Meadowlands Racetrack in the sports complex where the New York Giants and New York Jets play home games. Another plan is for a casino to be located in Jersey City, which has views of the Manhattan skyline with its shoreline along the Hudson River.
One possible reaction in New York if New Jersey approves the two casinos would be to speed up the timetable for when other commercial casino licenses are awarded in the Empire State. Voters in New York passed a 2013 referendum allowing up to seven new commercial casinos. An accompanying law, pushed by Gov. Andrew Cuomo, restricted the first four licenses to several upstate locations.
Three of those licenses were awarded last year; Gural’s bid for the fourth license at his Tioga Downs track is pending. The same law called for the final three licenses to be awarded about seven years after the first four were handed out by the state; the theory was to give those first four sites a chance to get up and running before introducing possible new competition.
If New Jersey moves with adding two new casinos, that timetable could be changed for the remaining three licenses in New York, and pressure would certainly be felt to locate at least one or two of the remaining casino slots somewhere in New York City or nearby suburbs. Whether that puts the racinos at Aqueduct and Yonkers in play for a full-blown casino license is uncertain.
For now, the NYGA is not calling for a specific plan to deal with the possibility of new, and serious, competition in New Jersey. It is uncertain if the group will take a proactive approach to beat back the New Jersey plan, as Atlantic City interests did 20 years ago in Albany when it helped stop casino gambling expansion proposals at the time in the Empire State.