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Rivers Casino takes another crack at a tax cut

Rivers Casino takes another crack at a tax cut

Schenectady facility says highest tax rate among New York casinos puts it at a disadvantage
Rivers Casino takes another crack at a tax cut
The entrance to the Rivers Casino & Resort is pictured.
Photographer: Marc Schultz

SCHENECTADY — Rivers Casino & Resort is still trying to get its state tax rate reduced, but the legislator whose Assembly district includes the casino thinks that’s unlikely to happen as part of the rapidly concluding 2019-2020 state budget process.

Neil Bluhm, chairman of Rush Street Gaming, the corporate owner of Rivers, has been pressing the case at the Capitol as a matter of fairness and competitive disadvantage. 

Slot machines are the biggest source of revenue for casinos, and Rivers pays 45 percent of its net slot machine revenue in taxes. This compares with 37 or 39 percent paid by the three other non-Indian casinos in upstate New York, and only 25 percent paid by the new MGM Springfield casino in Massachusetts.

MGM is the closest casino to Rivers, and its managers have said they would actively seek to market it to the Capital Region market. MGM has its own motorcoach department and advertises bus service from the Albany area to the casino twice a day and from the casino to Albany three times a day. Albany-area passengers heading to the casino get $20 in slot credits and $20 in food credits.

Bluhm and Rush Street CEO Greg Carlin declined to be interviewed for this story. In an emailed statement, Rivers said:

“Mr. Bluhm was in Albany advocating for a lower tax rate on slot machines at Rivers Casino because the current tax rate of 45 percent, which is the highest in Upstate New York, is making it virtually impossible to compete in a highly competitive regional market. MGM Springfield pays a much lower tax rate of just 25 percent on slots allowing them to run buses from Schenectady and Latham, which reduces slot revenue at Rivers and in turn reduces the amount of money that funds education in New York and supports our local community, and increases the risk of job loss in Schenectady.”

Rivers earlier this month said its workforce totals about 1,200 people.

Almost exactly a year ago, as another state budget negotiation process was nearing completion, Rivers and Del Lago Resort and Casino in the Finger Lakes region caused a stir when it became apparent they were seeking better tax deals from the state, barely a year after opening. Gov. Andrew Cuomo, who’d pressed for legalization of limited casino gambling, rejected the idea and it was roundly panned in other quarters as well. 

Assemblyman Phil Steck, D-Colonie, whose district includes Rivers, said at the time he supported the request as good for Schenectady but predicted (accurately) it would not pass as part of the 2018-2019 budget.

On Thursday, he offered the same prediction this time around.

“I don’t think it’s happening in this budget,” he said.

As a member of the Legistlature’s Democratic majority, Steck has more insight into the budget deliberations than some legislators, but he added that the briefings he receives are not real-time and not all-encompassing. Things change quickly in budget talks among the handful of leaders.

“It would surprise me if it happens,” he said. “That’s my prediction, but you can never be sure with the budget until it’s done.”

Steck had opposed legalizing casino gambling on principle. “If I were governor, we would not have Rivers Casino but I am not governor,” he said. 

So now that casinos are legal, he supports Rivers as a source of tax revenue for area municipalities and for having replaced a vacant locomotive factory that sat deteriorating for 40 years. Giving it a tax break so it can do more marketing would be good for the casino and for the region around it, if it boosts revenue, he said.

“There are arguments both ways on the issue, but I supported the change because I feel that there’s an aggressive marketing campaign out of the Springfield MGM casino,” he said.

The four non-Indian casinos in upstate New York got off to a slow start after opening from late 2016 to early 2018, falling well short of revenue projections. Each has gradually improved its financials, though.

Rivers, despite its protestations, has been a top performer financially among the four New York casinos in the first 11 months of the current fiscal year. Rivers is third in size and was third in construction budget among the four, but paid the most taxes and was first by a wide margin in dollars gambled per day in slot machines, which is a key casino industry metric. 

Rivers’ monthly gross gaming revenue has been second-highest by a narrow margin among the four New York casinos but substantially lower than the amount rolling in at MGM Springfield.

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