CASINO

Niagara Falls could go broke without Seneca slots revenue

TAGs: New York, Niagara falls, Seneca Indian Nation

niagara-falls-seneca-casino-slots-revenueNiagara Falls could go broke if New York State’s casino dispute with the Seneca Nation of Indians isn’t resolved by the end of the year.

On Tuesday, the state Comptroller’s Office issued an audit indicating that the City of Niagara Falls will have exhausted its cash reserves by the end of 2017 if the Senecas don’t resume revenue-sharing payments from the slot machines at their Seneca Niagara Casino.

The Buffalo News quoted a letter sent to the comptrollers last week by Niagara Falls Mayor Paul Dyster, who insisted the city has “adequate reserves in place to last over the course of this current dispute.” The city froze non-essential spending on July 1 and is studying what fat it might be able to cut from next year’s budget, just in case.

The Senecas, who operate three casinos in the state, halted all revenue-sharing payments in March based on their belief that there was nothing in their tribal gaming compact that required the payments to the state and the casino host communities to continue after the compact’s initial 14-year term expired at the end of 2016.

New York Gov. Andrew Cuomo has angrily rejected the Senecas’ interpretation of the compact’s terms, and last week instructed state attorneys to file a demand for the two parties to submit to binding arbitration. Cuomo also threatened to authorize a new commercial casino in Niagara Falls – the site of the tribe’s most profitable venue – if the tribe didn’t accept what New York claims is an automatic seven-year extension of the compact.

Late last week, Seneca President Todd Gates claimed that the tribe was “ready for arbitration” based on their belief that the tribe “has complied with the compact. New York State has not.”

The tribe maintains that the state violated the compact by authorizing seven new commercial casinos, including one in Seneca County, the del Lago Resort & Casino, which opened in March.

Early indications were that the first three of these commercial casinos to arrive weren’t living up to their advance billing. On Tuesday, the New York Times reported that the del Lago was on track to generate gross gaming revenue of around $151m in its first year of operation, well shy of the $262m its operators projected when they filed their application in 2014.

The new Rivers Casino and Resort, which opened in Schenectady in February, is posting similarly dismal numbers. To date, Rivers’ gaming revenue is just under $82m, on track to come in well below its first-year projected range of between $181.5m and $222.2m.

New York Gaming Commission officials suggested the new properties have yet to open their full complement of amenities and thus their true revenue potential has yet to be tapped. But more dispassionate observers are suggesting the local market is already past the point of oversaturation.

There’s some evidence to support that latter view, as at least some of the revenue generated by New York’s new casinos is apparently being siphoned from the state’s other gaming operators. The Saratoga Casino Hotel in Sarasota Springs, which isn’t far from the Rivers casino, reported its August revenue was down nearly one-quarter year-on-year.

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