Gamblers drop $1.24B into slots at Schenectady’s Rivers Casino in 12 months

Financial data show improvement over 2017-2018; March 2019 was best month ever for casino
Gross gaming revenue  jumped 11.5% from $140.9 million in fiscal 2017-2018 to $157.1 million in 2018-2019.
Gross gaming revenue jumped 11.5% from $140.9 million in fiscal 2017-2018 to $157.1 million in 2018-2019.

SCHENECTADY — Rivers Casino & Resort reported its most lucrative month ever in March, as guests dropped $126 million into its slot machines.

This was 25% higher than the monthly average for 2018-2019, and drove the casino to higher revenue and tax payments for the year.

Revenue statistics for New York’s non-Indian casinos are compiled in reports by the state Gaming Commission. The reports follow the state’s April-to-March fiscal year, and the commission was therefore able to tabulate the second full fiscal year of stats for the casino at Mohawk Harbor, which opened in February 2017.

Gross gaming revenue — the money lost by gamblers and retained by the casino as revenue — jumped 11.5% from $140.9 million in fiscal 2017-2018 to $157.1 million in 2018-2019.

On this revenue, Rivers paid $53.3 million in gaming tax, up 16.1% from 2017-2018.

Some other statistical tidbits from the 2018-2019 fiscal year:

  • The county and city of Schenectady each got $2.68 million of the tax money, up from $2.3 million the year before.
  • Gamblers dropped $1.24 billion in Rivers’ 1,150 slot machines and collected $1.12 billion in slot winnings.
  • Gamblers exchanged $199.7 million for table game chips.
  • Gross gaming revenue from the 16 poker tables was $5.4 million.
  • March 2019 was Rivers’ best month ever, with $15.97 million in gross gaming revenue, 24.5% more than the average among the preceding 11 months.
  • August 2018 was Rivers’ second-best month ever, at $14.4 million.

March was also the most lucrative month for Rivers in fiscal 2017-2018. And March was the most lucrative month in both fiscal years for the three other non-Indian casinos upstate, as well as for the video lottery casinos operating across the state.

March is a big month and it has been for years, said Michael Kane, president and executive director of the New York Gaming Association.

The industry trade group hasn’t done a formal analysis, he said, but the number of income tax refunds landing in people’s hands may have a lot to do with the March surge.

“One of the things we always attribute it to is tax returns,” Kane said.

In the 26 months it has been open, Rivers Casino has declined to discuss its financial strategy and results in detail, both when it was lagging behind predicted performance in its first year and then when it was showing sustained improvement in its second year.

Asked Friday what the casino had done to improve its performance, and why March is such a strong month, a Rivers spokesman again declined comment.

However, he did address the larger picture facing Rivers. The casino is actively lobbying for a reduction in the tax rate it pays on its all-important slot machine revenue, which at 45% is significantly higher than the other New York casinos and greatly higher than the nearest competitor, MGM Springfield, 90 minutes away in Massachusetts.

Via email, the spokesman said:

“While we made progress growing our gaming revenue in 2018, our expenses have also increased. Rivers Casino operates in a highly competitive and expanding regional gaming market, yet we pay the highest effective tax rate of 49% (slot taxes and other payments) — making it virtually impossible to compete.

“The competitive advantage enjoyed by other regional casinos allows them to draw from our market and in turn reduces the amount of revenue available to fund education in New York state, support our community and ultimately leads to fewer jobs for Schenectady. We are grateful to our entire team for their significant effort to adapt to these difficult conditions and are truly appreciative of the community for their continued support.”

Modern casino gambling outside of Indian territory began in New York a little more than two years ago, when three casinos opened in rapid succession from December 2016 to February 2017. The fourth opened in February 2018. 

All four have underperformed the financial projections offered when casino gambling was being pitched to New Yorkers who had to approve it in a referendum. This has resulted in lower-than-projected tax payments, as well. (The state keeps 80% for education purposes and 20% goes to nearby communities as a host benefit.)

Despite its protestations, and its higher tax rate, Rivers is doing as well or markedly better by some metrics than the other three New York casinos.

Rivers’ construction budget was third-largest among the four and it is third in number of slot machines, the main source of revenue for the casinos. Yet it generates more tax revenue than any of the others and is second-highest by a slim margin in gross gaming revenue.

Dollars gambled per day per slot machine — a key measure of performance in the casino industry — averaged $256 at Rivers in 2018-2019, vs. $198 at Tioga Downs, $162 at del Lago and just $122 at Resorts World Catskills.

Meanwhile, the Capital Region’s only video slot casino, Saratoga Casino Hotel, had another fiscal year of shrinking revenue. As Rivers was preparing to open 20 miles south of it, Saratoga Casino Hotel predicted the newcomer would cut into its bottom line.

After opening in the 2003-2004 fiscal year, Saratoga Casino Hotel saw its net win (the money lost by gamblers, similar to gross gaming revenue at a casino) increase in 12 fiscal years and decrease (just barely) in one, reaching a peak of $164 million in 2016-2017. It then dropped to $130.9 million in 2017-2018 and $125.7 million in 2018-2019 — a two-year decrease of 23.4%.

The Saratoga racino doesn’t follow the casino trend toward best revenue in March. Instead, its best month is typically August, when Saratoga Springs is crowded with horse racing fans.

But March is still a good month most years at the racino. In March 2019, guests played $169 million in credits on the video gambling machines.

Categories: Business, News, Schenectady County

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