Resorts World Catskills opened in Upstate New York in February of this year with a promise to revitalize the area. Its launch was even heralded as “the rebirth of the Catskills.” But figures suggest the casino is struggling to make ends meet.
The largest of New York State’s four commercial casinos — and the final to open — the casino’s parent company Empire Resorts has reported a second quarter loss of $37.2 million on revenue of $49.1 million and operating expenses of $71.5 million, according to a filing to the Securities and Exchange Commission.
Meanwhile, figures released Friday by the New York State Gaming Commission show the company’s July revenue was well below initial expectations.
Empire predicted the casino would earn $200 daily per slot machine daily and $1,500 per table game, but its currently bringing just $111 for slots and $1,192 per table game.
According to the Times Herald-Record, the casino project’s “viability is questionable” if it fails to meet these targets.
Build It, Will They Come?
Empire Resorts is in the process of expanding the casino with a new $33 million entertainment complex, scheduled to open in December.
The complex will include a mid-market hotel, plus a host of non-gaming amenities, which it hopes will attract footfall from the New York metropolitan area.
But Empire Resorts’ management admitted in a recent SEC filing that it could not guarantee this will be enough to save the project.
‘We cannot be certain that our business will generate sufficient cash flow from operations, that our anticipated earnings from the casino will be realized, or that future borrowings will be available under our existing debt arrangements or otherwise to enable us to service our indebtedness, make anticipated capital expenditures and satisfy working capital needs,” they wrote.
$500 Million Debt Load
Empire Resorts owns the nearby Monticello Raceway racino, which has been bleeding money over the last decade. The company owes more than $500 million in debt and other long-term liabilities and its annual debt and capital investment expenses are $75 million per year, according to The Record.
The company is 88 percent-owned by a trust belonging to the family of Malaysian-Chinese casino magnate K.T. Lim, the chairman of Malaysian casino giant Genting. Lim rescued the company in 2009, and agreed to keep the racetrack alive, as condition of licensing Resorts World.
The trust loaned Empire another $30 million in June, but is unlikely to keep plowing money into the venture unless it begins to see some returns.
“Without a rapid and significant increase in revenue, the company won’t be able to meet its interest obligations,” Moody’s analyst Keith Foley told The Record. “At some point, the company may not be able to cover its current level of operating expenses.”