A new report from New York Comptroller Thomas DiNapoli shows the state's four licensed casinos have brought in $176 million in gaming tax revenue for local governments from 2017 to 2022. However, only the three smaller towns that host the casinos saw a significant financial benefit from that money.
“Casinos are not a magic fix that will solve local fiscal challenges,” DiNapoli said. “While casinos have generated local gaming tax revenue, the impacts vary for the communities that receive such revenues. It’s my hope that this report gives state and local officials a clearer perspective that can help potential host communities avoid the pitfalls that arise with misguided expectations about the public benefits of casinos. They are not a sure bet.”
According to DiNaopli's 2020 report, all four of the state's current casinos — del Lago Resort and Casino in Tyre, Rivers Casino and Resort in Schenectady, Resorts World Catskills in Thompson and Tioga Downs Casino in Nichols — fell short of the projected gross revenue on which local taxes are levied. These revenues and tax contributions have continued to lag three years later, only reaching 50-60% of expectations, DiNapoli says. The only exception was Tioga Downs in the Southern Tier.
Local governments did benefit, however, despite the shortfall in collections. In the three smaller host towns, Nichols, Tyre and Thompson, gaming revenue made up 30-60% of total revenue, which allowed them to significantly cut property taxes. But in the larger host city of Schenectady, and the four host counties, gaming tax accounted for just 1-3% of their total revenue.
Casino taxes generally only amounted to 0.5% of the total revenue in regional, non-host counties.
The six-month pandemic shutdown in 2020 contributed to the shortfall, however, all four casinos saw gross gaming revenues that exceeded pre-pandemic levels in 2022, according to DiNapoli. Despite that, changes to the state's gaming law that allows casinos to keep a greater percentage of their gross revenue means that did not translate to greater local gaming taxes. The cuts reduced collections by $41.9 million in 2022, including $8.4 million that would have gone to local governments.
Joe Addabbo, the chair of the state Senate Racing, Gaming and Wagering committee, says New York’s four licensed casinos are crucial economic drivers.
Nancy Buck, treasurer for Sullivan County, said the Resorts World Catskills casino plays a vital role for both the county and the town of Thompson. The comptroller’s report shows Resorts World Catskills accounts for nearly 30% of the town’s tax revenue. But they haven’t gotten everything that was promised when it opened in 2018.
“The state and everybody thought we would be getting more in the beginning, then COVID happened," Buck said. "So in some respects, it was a little disappointing that we weren't where the state thought we might be when it opened, but we wish the casino to keep on moving forward and doing well.”
The report shows a trend of underperformance from casinos and warn communities should not rely too heavily on them to make up revenue, especially as the state prepares for three more casinos downstate. Addabbo says he doesn’t expect this to hurt upstate gaming.
“So by expediting... the downstate license by one year, the upstate counties will get some financial benefit from that," he said. "I think that there's a built in fan base, or a customer base, for the four upstate casinos that exist already.”
Rob Doherty, chair of the Sullivan County Legislature, said the county is deeply concerned that new downstate casinos would hurt the fiscal health of theirs. He wants to state to help Sullivan, including entering a public private partnership with Resorts World to build a convention center at the casino. He says that would help keep the casino viable.
“Anything south of (highway) I-84, why would you come here when you can go to bring a casino that has every amenity much closer to your house? It makes no sense why you would come up here without a convention center," Doherty said.
Addaboo says he hopes an announcement on what downstate municipalities will be awarded casino licenses comes late this year or early next.
Spectrum News 1 reached out to the four casinos mentioned and have either not heard back or have not received significant statements.
DiNapoli says the report shows the importance of fiscal planning when it comes to expectations for gaming revenues. His audits of two host towns uncovered issues that include budgeting challenges associated with gaming revenue and the need for multi-year planning by host towns and counties, he says.
He is recommending an appropriate plan for municipalities that will host future casinos downstate.
To read the full report, click here.
DiNapoli says another report examining the impact hosting a casino can have on local gambling addition rates and quality of life issues will be released later this year.