CAPITAL REGION — While New York state’s gambling revenues are off this year because of the pandemic, state Comptroller Thomas P. DiNapoli is cautioning against seeking more gambling revenue without first considering its impact on problem gamblers.
With at least one proposal in the state Legislature that would legalize online gambling as a way to increase state revenues, the state needs to weigh the pros and cons of expansion, DiNapoli warned in a report released on Thursday.
“Before expanding gambling, the state must take a closer look at the impacts of casinos and other gaming already in place, as well as the problem of compulsive gambling,” DiNapoli said.
In normal times, New York collects more gaming revenue than any other state, about $3.7 billion for state and local governments from sources including lottery games, video lottery terminals, racetrack wagering, casinos and sports betting. About two-thirds of that comes from revenue generated by scratch-offs and other lottery games.
But this year, the pandemic meant that casinos and VLT facilities — including Rivers Casino & Resort in Schenectady and Saratoga Casino Hotel in Saratoga Springs — were closed from mid-March until mid-September, generating no new revenue. Lottery games have remained available, but revenue from lottery ticket sales are projected to be off by $293 million, or 11.8 percent.
Even when the two Capital Region casinos were open, they were limited by state pandemic order to 25 percent capacity, and brought in millions less revenue than a year ago.
For September, when it was only open two-thirds of the month, Rivers’ net revenue was $4.8 million, compared to nearly $9.9 million the previous year. For October, net revenue was $7.14 million, down from nearly $9.8 million in 2019.
That decline is casino revenue is also meaning less in host benefit payments to the city of Schenectady, Schenectady County, and surrounding counties.
Saratoga Casino Hotel, a video lottery terminal facility, saw $77.2 million in credits played in September, compared to $158.3 million the year before. For October, it was $112.9 million, down from $159.8 million in 2019.
As of this weekend, both facilities face new limits on their hours, with Gov. Andrew Cuomo having ordered that all restaurants — including the casinos, since they hold state liquor licenses — must stop indoor operations at 10 p.m. Rivers had been open until 2 a.m., and the Saratoga facility had been open until 5 a.m.
Even prior to the pandemic, Rivers — like the other three commercial casinos in upstate New York — hasn’t lived up to its original revenue projections. The Saratoga facility, as anticipated, has seen its business hurt by the existence of Rivers Casino in the same market.
In New Jersey, meanwhile, where online sports betting is legal, record revenues are coming in during the pandemic, prompting some legislators to think New York — which faces multi-billion-dollar deficits heading into the future — should get in on the action.
Gov. Andrew M. Cuomo so far has resisted the idea, which he believes would require an amendment to the state constitution. Backers of the idea counter that online sports betting could be legal if the computer servers are located at existing casinos.
Against that background, DiNapoli said the state’s spending on prevention, treatment and recovery for problem gambling hasn’t grown along with the increase in gambling opportunities. The state, the report noted, spent $90 million last year promoting the state lottery, while commercial facilities with VLTs — which are overseen by the Lottery Division — spent another $182 million on advertising and promotion.
Men, African-Americans and people living in disadvantaged neighborhoods are disproportionately likely to have gambling problems, the report said.
“The report found that while expanding legalized gambling repeatedly over past decades, the state has taken few, if any, steps to determine whether its efforts to maximize revenue may harm New Yorkers who are susceptible to compulsive gambing,” DiNapoli wrote in a report summary.
The report recommended that policymakers assess whether there is an appropriate balance between marketing devoted to promoting gambling and those devoted to prevention and treatment of problem gambling; require the Gaming Commission to report regularly on how casino revenue and employment compare to original projections; and clearly identify the social and economic impacts of the lottery and other state-sanctioned gambling.
“Ongoing discussion of potential further gaming expansions should be informed by comprehensive, current information on social and economic impacts, as well as those related to revenue,” the report said.
The commercial casinos are required to include problem-gambling hotline information in all their promotions and maintain a “self-exclusion” list for people who recognize they have a problem. The hotline number is 877-8-HOPENY (877-846-7369) or text HOPENY.