Del Lago Requests Reduction of Slot Machines at Upstate New York Casino, Rivers Petitions for Tax Break

Posted on: March 29, 2019, 09:34h. 

Last updated on: March 29, 2019, 09:34h.

Del Lago Casino in upstate New York is joining two of its competitors in asking state gaming regulators to allow the resort to reduce the number of slot machines on its floor.

Del Lago Casino New York gaming
Del Lago wants to free up some of its casino floor by removing slots. (Image: Michael Davis/Syracuse New Times)

Earlier this week, the New York Gaming Commission approved slot machine reductions at Resorts World Catskills and Tioga Downs. The state regulator concluded that there was “an abundance of slot assets exposed for play,” and agreed with the casinos that removing some of the devices would allow the floor space to be better utilized.

Now, Del Lago wants the same. Spokesman Steven Greenberg told the Democrat & Chronicle that the casino needs space to implement its sportsbook with operating partner DraftKings.

We are seeking to reduce the number of slots to construct our sports gaming facility and make other improvements for our customers,” Greenberg explained.

The four upstate New York casinos – Rivers Casino being the fourth – are expected to take their first sports bets in the coming weeks.

Sports Betting Over Slots

All four upstate New York casinos are underperforming. The venues were authorized in 2013 as part of a scheme to revitalize struggling communities and return tourism. But the crowds simply haven’t come at rates forecasted.

Gov. Andrew Cuomo (D) told the casino operators a year ago this month that there would be no financial bailout for the struggling resorts. “The upstate gaming casinos are private concerns. They bid, they made an investment,” he declared.

The operators say the unexpected 20-month standoff by the Seneca Nation and the state – which saw the tribe stop sharing revenue at its three casinos and instead use the money to make improvements at the resorts and entice gamblers with exceptional incentives – made the market “blatantly unfair.”

Even when the tribe is sharing gross gaming revenue (GGR) proceeds from its slot machines, the Seneca compact mandates 25 percent to the government. The commercial venues are taxed between 37-45 percent depending on the casino’s location.

Since tribal casinos won’t be permitted to operate sportsbooks in the New York law, the commercial venues are eliminating slot terminals in favor of sports betting lounges.

Rivers Pleads for Cut

Rivers is the highest-taxed casino of the four upstate properties at 45 percent. Neil Bluhm, chairman of Chicago-based Rush Street Gaming – the parent company to Rivers – has been in the Albany capital recently petitioning lawmakers for a tax break.

Located in Schenectady, casino officials say it’s difficult to compete when Resorts Word (120 miles south) and MGM Springfield (100 miles southeast in Massachusetts) are taxed at lower rates.

Mr. Bluhm was in Albany advocating for a lower tax rate on slot machines at Rivers Casino because the current tax rate of 45 percent … is making it virtually impossible to compete in a highly competitive regional market,” a statement to The Daily Gazette declared.

“MGM Springfield pays a much lower tax rate of just 25 percent on slots allowing them to run buses from Schenectady and Latham, which reduces slot revenue at Rivers and in turn reduces the amount of money that funds education in New York and supports our local community, and increases the risk of job loss in Schenectady,” the release concluded.