A casino in East Greenbush is expected to negatively affect Saratoga Casino and Raceway in Saratoga Springs, nearly cutting its annual revenue in half and resulting in job cuts, according to a casino application submitted by the racino.
Saratoga Harness Racing and Kentucky-based Churchill Downs acknowledge in their casino application to the state Gaming Commission that the pitch for the Capital View Casino and Resort would be a blow to Saratoga Casino and Raceway.
Saratoga Harness is the parent company of Saratoga Casino and Raceway and Churchill Downs is currently pursuing a 25 percent stake in the company. The operators argue that’s why they should receive one of four casino licenses from the state.
“The most important benefit of co-ownership is to minimize the adverse impact of new competition on the existing race-track casino in Saratoga Springs,” the application states.
The Capital View casino is projected to generate total revenue of $220 million once it is fully operational. But the operators say a “substantial portion” of that revenue would come from Saratoga Casino’s existing customers.
Taking away from the racino’s customer base is expected to lead to a 48.2 percent decline — $90 million — in the facility’s annual revenue and result in an undisclosed number of job losses.
“Revenue cannibalization on this scale would clearly result in reduced employment at the Saratoga Springs casino and the loss of accompanying benefits to Albany,” the application says.
At the same time, the operators say “it is reasonable to assume that there would be less erosion in jobs due to competition due to the common employment pool, reducing the revenue cannibalization impact across the region as a whole.”
Officials at Saratoga Casino and Raceway could not be reached for comment on Friday.
Saratoga Mayor Joanne Yepsen said she is concerned about a decline in revenue provided to the city from the race track. The track gives the city a percentage of its earnings. Currently the city receives $2.8 million annually, which Yepsen said has been critical for economic development.
“I am concerned about a lot of the economics of all of Saratoga,” she said. “We have to keep our other industries strong to make up for that potential loss. The city’s concern is clearly the tax revenue and [video lottery terminal] revenue.”
But Yepsen said her top priority is creating and maintaining jobs. She said if the East Greenbush proposal received a casino license, it is likely that employees who lose their jobs at the Saratoga Casino would simply be hired at the new casino.
“There is going to be competition everywhere across upstate New York, so of course we’re concerned about that,” she said. “But the East Greenbush casino operators would probably ensure that people are still employed. Whether in East Greenbush or Saratoga, these people will have jobs.”
Saratoga Casino is planning a $30 million expansion that will add a total of 134,000 square feet of space to the facility. The project includes a 108-room hotel, 2,000-seat event center, 180-seat meeting room, 137-seat steakhouse, a pool, spa and fitness center.
The casino application points to Saratoga Casino’s existing operations and customers as proof that the operators would establish a successful full-scale casino in the region. Casinos would also be built in the Hudson Valley and Southern Tier.
“Ongoing casino operations at Saratoga Casino and Raceway allows the partners to continue to develop a diverse and growing player list, or database, of casino customers,” according to the application. “It is our belief that the development of a marketing database of repeat customers has become an essential component to the success of a modern casino.”
Together the facilities are expected to generate $309 million annually, a net increase of 76 percent in gross gaming revenues for the region. Also, net slot revenue would total $246 million, a 54.9 percent increase over revenue generated at Saratoga Casino.
The East Greenbush casino is expected to create 1,063 full-time jobs, with 1,107 direct jobs by 2018, plus 225 indirect jobs and 182 spinoff jobs. Average annual wages for those jobs would be $33,484.
The casino will house 1,500 slot machines and 60 table games. It is estimated to cost about $53.4 million. The casino will also include a 6,000-square-foot event center with 500 seats, a steakhouse, casual dining restaurant, food court and two bars.
There would also be a 100-room hotel on site with a spa and lounge, which is estimated to cost $21.1 million. The hotel was originally proposed with 300 rooms but was downsized to 150, and then downsized again to 100.
Four other sites in the Capital Region are being proposed for a casino — Amsterdam, Cobleskill, Rensselaer and Schenectady. The Gaming Commission’s Facility Location Board will choose locations for a casino in the fall.