New York casino operator Empire Resorts is shutting down slots operations at the Monticello Casino & Raceway to avoid cannibalizing its new Catskills property.
On Tuesday, Empire informed the US Securities and Exchange Commission that the subsidiary that runs Monticello had told its staff that the property would close its video gaming machine (VGM) operations “on or about April 23, 2019.” Monticello’s harness racing operations will remain as they are, at least, for the time being.
Empire CEO Ryan Eller was blunt about the reason behind the closure, saying the company needed to “improve revenue performance at our nearly Resorts World Catskills property,” the flashy $1.2b New York casino newcomer that opened its doors to the public in February 2018.
Resorts World Catskills has so far failed to live up to its original revenue projections, as have the other three upstate commercial casinos the state authorized in 2015. Empire expected the Catskills venue to generate $277m in its first year of operations but the venue managed only half that sum in its first 11 months.
The slots shutdown will leave about 160 Monticello staff with nothing to do, but Empire says these workers will be either offered jobs at the Catskills casino or receive severance packages. About 40 Monticello staff will remain at their posts to oversee racing operations.
Monticello launched its casino in 2004 and currently features around 1,100 VGMs but the property had been on a lengthy losing streak that accelerated dramatically once the Catskills property opened.
There’s some debate as to whether Empire has the authority to shut Monticello’s casino without state approval, given the company’s obligations to kick up a certain cut of revenue to the state and to continue to fund purses at the track. The New York Gaming Commission has yet to publicly comment on the news.
Assembly Racing Committee chair Gary Pretlow told the Poughkeepsie Journal that he would examine the possibility of having the Catskill Off-Track Betting Corp take over Monticello’s casino operations.
BETTING BOOST ON THE WAY?
With the upstate casino market effectively saturated, New York’s commercial casino operators are more or less pinning their hopes on adding legal sports betting to their gaming palette. The 2013 legislation that authorized those casinos’ construction also allowed them to offer sports betting pending a change in federal law, which came to pass last spring.
Last week, New York Gov. Andrew Cuomo stated that he wanted to bring betting to the upstate casinos in order to “generate activity” at the otherwise under-utilized venues. On Thursday, the New York State Gaming Commission posted the agenda for its next meeting on Monday (28) and “sports wagering” made the cut.
The 2013 legislation doesn’t allow for anything other than land-based wagering, and while other states that have allowed only land-based betting have reported a traffic boost at casinos offering sportsbooks, New Jersey’s experience shows digital betting generating triple the handle generated by land-based operations.
Regardless, all four upstate operators have struck prospective betting deals with bookmakers. The state’s tribal gaming operators, with whom Cuomo has frequently sparred, are also striking deals on their belief that they are entitled to retain product parity with the commercial operators.