Editorial: No state financial deals for casinos

They got themselves into this mess; they can get themselves out

On Wednesday morning, representatives of an organization that fights for housing and care for the state’s most severely mentally ill individuals were in our offices discussing their plea to the state Legislature for enough money to sustain their heavily underfunded mission before it reaches a crisis.

They need $120 million this year just to stabilize the 40,000-unit housing system where New Yorkers suffering from severe schizophrenia, bipolar issues and other thought- and mood-disorders receive 24/7 services. They anticipate the Legislature will only allot them a fraction of what they need.

On the table behind these representatives was Wednesday’s Gazette, with the bold front page headline announcing Rivers Casino’s appeal to the state for financial help to boost its profits in light of lower-than-anticipated attendance and revenues.

During fiscal year 2017/18 that ended in March, the casino took in more than $127 million in total gross revenue from slot machines, table games and poker tables, according to a report filed with the state Gaming Commission.

That’s far less than operators had anticipated they’d be taking in when they opened the casino barely a year ago and far less than they boasted would bring prosperity and tax breaks to the region to the happiness of all.

For those suffering from severe mental illnesses — many of whom have been disowned by their families, taken to drugs and alcohol for relief, and who might otherwise find themselves homeless or living in a state hospital, nursing home or prison — theirs is a crisis beyond their control.

The casinos’ financial woes, such as they are, are a situation of their own making. And they shouldn’t expect taxpayers to bail them out.

Rivers and the state’s other casino operations didn’t go into this situation blind. And nothing that’s happened since the state awarded the four casino licenses in 2015 and 2016 has changed enough to justify a renegotiation in the terms to which they all agreed.

The owners of the Del Lago Resort and Casino in Seneca County were certainly aware of the close proximity of two casinos run by Native Americans to their new operation when they made their application. They were aware of the potential for direct competition and of the financial breaks the Indians enjoy that private casinos don’t.

Rivers officials certainly knew there was a fully established slots venue and harness track just 20 miles up the road in Saratoga Springs. They knew they’d have to contribute money to offset the casino’s financial impact. 

They all knew about the growing competition from other states like Massachusetts, Pennsylvania and Connecticut, which are building or considering their own gambling parlors. They were aware of the financial difficulties of the New Jersey casinos, the bankruptcies and the closings. They knew of the limited number of customers and the competition for their disposable income. They knew about New York’s struggling economy, particularly upstate, that might impede their growth. And they knew what the state and their host communities were expecting as a share of their profits.

Yet they went forward full-speed ahead with their gaming applications anyway, accepting all those risks in anticipation of a big pay day. So far, they’ve been disappointed.

But this is their problem to solve, not the taxpayers’. Other entrepreneurs don’t get to weasel out of their obligations just because things don’t go as planned in their first year. Why should the casinos be treated any differently?

If the casinos feel they need to invest more in their marketing efforts to boost attendance, they can use their own money to do it. If they need to improve their incentives and food and entertainment to entice more customers through their doors, they can pay for it themselves. It might cost them some profit, but that’s how business works — you sometimes have to spend money to make money.

Yes, the casinos provide local jobs. And yes, they contribute tax revenue for local governments. That money is nothing to sneeze at. But their shortcomings won’t destroy the local economies they’ve only been a part of for a year.

When it became apparent that they weren’t generating as much money as they’d hoped, the casino owners told everyone to be patient, that they needed time to ramp up and become established. Yet here they are already with their hands out to taxpayers, seeking breaks.

There are many others in this state that aren’t getting what they need and that deserve more money from the state — many others in severe need through no fault of their own.

The casinos don’t fall into that category, and state lawmakers shouldn’t cave in to their appeals.


Categories: Editorial, Opinion

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