New York Governor Andrew Cuomo Rejects Idea of Casino Bailouts
Posted on: March 29, 2018, 04:00h.
Last updated on: March 29, 2018, 03:04h.
New York Governor Andrew Cuomo (D) warned owners of commercial casinos this week that there will be no financial bailout from the state regardless of how bad they’re struggling.
Responding to a petition from del Lago Resort & Casino seeking some sort of tax break, Cuomo told reporters, “The upstate gaming casinos are private concerns. They bid, they made an investment. Some of them will say they are not doing as well as they hoped or would have expected.”
The governor continued, “But they’re private concerns, I don’t want to get into the business of bailing out private concerns.”
Del Lago spokesman Steven Greenberg issued a statement this week saying the Finger Lakes casino is at a “blatantly unfair competitive disadvantage.” The casino company argues that the Seneca Nation, which stopped sharing slot revenue with the state last year, is using the proceeds to lure gamblers with incentives to its tribal venues.
Leveling Playing Field
Principally owned by Paul and Thomas Wilmot’s Wimorite Properties, a commercial real estate company based in New York, del Lago says Seneca Nation’s decision to abort its longstanding state gaming compact has altered market conditions.
The tribe’s state gaming compact expired in 2014. The Native American group contends that while its operating permit renews automatically, the requirement to share revenue without updated terms from state lawmakers does not.
Politicians, and local governments that have also seen critical payments from the casino disappear, believe the Seneca Nation’s actions are payback for New York authorizing the upstate commercial casinos.
Under the previous compact, Seneca’s three upstate casinos shared 25 percent of their gross slot machine win with state and local governments. That equated to about $110 million a year being sent to the Albany capital.
“From the time del Lago opened, the Seneca Nation went from paying 25 percent to zero,” Greenberg stated. “So they pay zero … and del Lago pays 37.5 percent. The landscape completely changed.”
Find a Solution Elsewhere
The Wilmots said this week “we need some help,” as first-year gross gaming revenue (GGR) fell far short of premarket expectations by $100 million.
Moody’s warned in January that the casino is on a path that puts it at substantial risk of defaulting on outstanding debts. The financial agency downgraded del Lago’s credit rating from “stable” to “negative.”
Cuomo says that’s no one’s problem but del Lago’s.
“We did casino gaming to create facilities, generate economic development, create jobs. It has done that,” the governor declared. “You have a casino saying, ‘I’m not meeting my expectations. I should get help from the state.’ I’m not sympathetic to that.”
The two other upstate New York casinos that have been open for a year have also both failed to meet GGR projections. Combined, the three properties underperformed by $220 million.
Assemblyman Gary Finch (R-Auburn) had stronger words for del Lago.
“If this wasn’t such a serious matter, I would’ve thought this was an early April Fool’s Day joke,” Finch posted on Facebook. “Asking hardworking families to bail out a casino would be absolutely unacceptable. It’s absurd.”
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