January 14, 2019

The Update Desk: Casino Gambling (again)

Can it really be time to do another update on New York's ill-fated decision to allow non-Native casino gambling?  Why yes, yes it is - and this update is about the same as the last one, and the one before that.

As has consistently been the case, the news is not good for our Vegas-style casinos in the Finger Lakes area, the Southern Tier, the Capital region, and the Catskills.  Leading the way, again, is the del Lago Resort and Casino down the Thruway a bit from Syracuse.

We're told of another downgrade in their credit rating and a likely continued 'negative' outlook.
If the two-year-old del Lago Resort and Casino in the Finger Lakes is to survive, it's going to need new cash investment or face a difficult restructuring of its debts and finances.
The issue? Lower than expected revenue growth and, oh yeah -- too many other opportunities for throwing your money away. The same issues confound the other three, which are not meeting their revenue estimates, either. del Lago was about 57% short of projections. Here's what Moody's said, in part.
The downgrade and the negative outlook consider that despite a slight pickup in del Lago's monthly gamin revenue, this improvement is not enough to alleviate Moody's concern that Lago will be challenged to support its annual fixed charges of about $50M going forward.
And there's more news on the casino front, which is not necessarily going to be helpful to the cause, either.

While the non-Native casinos are struggling, the Oneida Nation's gambling empire is growing.

In addition to the flagship Turning Stone Resort Casino, with multiple golf courses, a spa, some fabulous restaurants, entertainment venues and more, there's also the Yellow Brick Road casino in Chittenango and the new Point Place casino in Bridgeport.

The big news from the Oneidas is their move into sports betting, which is possible because of the Supreme Court decision last spring that states could legalize and regulate this previously Vegas, offshore or black market gambling opportunity.
Oneida Indian Nation, owner of the award-winning Turning Stone Resort Casino in Verona, NY announced... that, subject to National Indian Gaming Commission review, it will be partnering with global gaming leader Caesars Entertainment to bring sports betting to Upstate NY with a licensing and branding alliance. "The Lounge with Caesars Sports" will open at Turning Stone, Yellow Brick Road Casino and Point Place Casino in 2019, following completion of the NIGC review and the NY Gaming Commission's issuance of sports betting regulations...
The alliance includes allowing shared reward points, special player promotions and more, "further bringing the excitement of Las Vegas to New York gaming locations" owned by the Oneidas. This excitement is probably not all that exciting to the folks at del Lago or the other three new properties.

And finally, in other gambling news, the Seneca Nation has to start paying their $100M annual casino revenue payments again, which they stopped in 2017. The Senecas have three full-service casinos west of del Lago, but market heavily in the Finger Lakes area.

The Senecas lost 2-1 in arbitration. although their representative on the arbitrator's panel says the decision
...rewrites the Compact in a way that harms the Nation and provides an unjustified windfall to the State.
Nation President Rickey Armstrong, Sr. said the Senecas know they are right, and that their obligation to make the payments ended after 14 years. The Compact was signed in 2002, so the payments stopped with the $30M paid in March of 2017 for the prior quarter. The state maintains that an automatic renewal requires the payments for an additional seven years - through 2023.

This all may end up in court, which is allowed under the Compact provisions. If that's the case, we can expect the State to argue vigorously in favor of the continued payments.

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