Cannibalization of gaming revenue continues in northeast

Photo courtesy of pixabay user Tourque
There are currently 24 active casinos in New York State.

With a handful of New York casinos opening recently, most notably Resorts World Catskills, there are varying outcomes occurring due to the competitive gaming market.

New York as a state is profiting off this emerging market, but as each new casino opens, they begin to draw customers away from existing casinos, causing issues.

Two new large casino openings in upstate New York – del Lago Resort and Casino and Rivers Casino Schenectady – have grabbed market share from incumbents in the region and helped state gaming revenue grow more than 30 percent. During the year prior to their opening, the combined gaming revenue trend for the existing upstate casinos was flat.

Although del Lago Resort Casino has substantially grown total gaming revenues generated in its primary market area, the property’s revenue ramp-up is well below expectations, which was initially seen at $250 million of net revenue for its first full year of operations, however revenue is coming in closer to $150 million.

Del Lago and Rivers have taken a big chunk of gaming revenue from their closest competitors, Finger Lakes Gaming and Vernon Downs. These two casinos are located in the central portion of upstate New York, with Rochester and Syracuse as the primary feeder markets. This trend, where newcomers are stealing share from incumbents, is consistent with what has been occurring throughout US gaming markets.

In the nine months since its February 2017 opening, del Lago generated $125 million of gross gaming revenue. Since del Lago opened, Finger Lakes gross gaming revenue on a latest 12-month basis dropped about 15 percent, to $100 million from $129 million. Vernon Downs’ gross gaming revenue on a latest 12-month basis dropped about 14 percent, to $32 million from $37 million.

Resorts World is a $744 million casino resort development located in the Town of Thompson, in Sullivan County, NY, and is owned by Montreign Operating Company, LLC.

Similar to the challenges facing del Lago and Rivers, the success of Resorts World relies on growing the gaming market and attracting players from the existing competitors. However, unlike del Lago and Rivers, Resorts World has the downstate portion of New York as one of its primary market areas as it is to be located within a reasonable driving distance from the New York metro area.

A significant amount of casino supply already exists within a 200 mile radius of where Resorts World Catskills will be located. Resorts World Catskills will be competing for customers with other large, established competitors in New York, Pennsylvania and Connecticut.