New York Governor Andrew Cuomo is not showing support for a bailout requested by the del Lago Resort & Casino.
The state of New York only legalized commercial casino gaming a short time ago and since opening for business, the handful of gaming venues in operation are not doing so good. Gaming venues like the del Lago Resort & Casino are falling way short of their estimated earnings potential and are now asking for a bailout from the state. The del Lago revealed that assistance is needed from the state after coming up short for the first year projections for revenue. The casino missed the mark by $100 million.
It has not been revealed just how the casino operator wants help from the state, but many speculate that the casino has asked for tax breaks from government officials. The casino currently pays 37% in annual taxes on their slot machine gaming and a much lower rate of 10% on table games. The ribbon cutting for the venue took place in February 2017 and it was expected that after one year, the casino would generate at least $260 million.
After February revenue totals were released, it was found that the casino only generated $146 million, far under the estimated total. A letter was set to Governor Andrew Cuomo and Robert Mujica, the budget director for the state, by Senator Joe Griffo which stated that the casino operator was asking for a tax break of $14 million or so. The senator reportedly stated that he was not supportive of the bailout as the state has other things to worry about.
Governor Showing No Pity
Cuomo is not showing any support for the casino and stated to the press earlier this week that the casinos in the upstate area were private concerns and that he has no plans to get into the business of bailing out ‘private concerns’.
Officials of the del Lago are blaming the Seneca Nation for the failure of the gaming revenue to reach its full potential. The tribe operates three gaming venues in the western region of New York and stopped making payments to the state in 2016, stating their compact from 2002 had expired.
Del Lago spokesman Steve Greenberg, stated that the tribe used the money that should be going to the state to bring in patrons with promotions and offers. Greenberg claims that tribal casinos are cannibalizing the industry and taking away from the commercial casinos, which is why the del Lago has asked for assistance.
Reportedly, the casino makes enough to pay their bills but will face serious problems in the long term if they are unable to receive help from the state.
Rivers Casino Needs Help Too
The del Lago Casino is supposedly not the only commercial casino in the state that needs help. The Rivers Casino has not been able to meet projected revenues and have also sought assistance from the state. For their first year in operation, the Rivers Casino was able to generate $151.8 million. This was not as big of a shortage as the del Lago, but still less than the $180 million to $220 million that was first projected.
The Rivers Casino has reportedly asked lawmakers for a tax break as well. But, if lawmakers are unwilling to help the del Lago, they are sure to deny the Rivers venue as well.
It will be interesting to see if any steps are taken to help the new casinos and if not, if the venues will be able to stay afloat in the future.