Small Blind, Big Find: Upstate New York's Casino Dreams

By Leora Katzman

Since the demise of the tourism industry in the Upstate New York region decades ago, gambling has been seen as the potential panacea for the upstate economy. After decades of long-term planning, in 2013, Governor Andrew M. Cuomo passed the Upstate New York Gaming Economic Development Act.  This act finally legalized casinos in Upstate New York allowing up to seven gambling parlors in the state.  Many residents question whether the potential benefits of these casinos are realistic given the growing competition in the gaming industry closer to the New York metropolitan area.

In December 2014, a special committee of the state Gaming Commission selected three casino resort projects – Montreign in the Catskills Region, del Lago Resort & Casino in the Finger Lakes region, and Rivers in the Schenectady region.  In the summer of 2015, a fourth casino was added in the state’s Southern Tier near Binghamton.  The del Lago Resort & Casino in Tyre, Seneca County, located in the heart of New York’s Finger Lakes region, is the closest casino to the Ithaca area.  While it is a world-class resort and casino, the larger goal of the site is to inspire growth and tourism throughout the Finger Lakes region.  Construction is well underway on the $440 million Seneca County project and the resort casino is scheduled to open in February 2017.  The 4-star resort style hotel promises to hire 1,800 full-time employees and offers 2,000 slot machines, 75 table games, 205 hotel rooms, and a wide variety of dining and nightlife options.

While many residents are optimistic about the economic impact of the casino plan, others question whether the potential benefits are feasible.  Many speculate that the revenue expectations are unrealistic because of fierce competition in the industry.  The casino industry already faces high saturation, which is confirmed by the casino closures in Atlantic City, and cost cuts at Foxwoods in Connecticut.  Additionally, there are plans to open casinos in more desirable locations such as the New York City and New Jersey areas, which may siphon off potential gamblers from the upstate casinos.  Another concern is that the gambling thirst is already being satiated by lotteries, scratch-off games, Internet gambling, fantasy football sites and March Madness pools, diminishing the appeal of casinos.  There are also fears that these new casinos would cannibalize the already existing upstate Indian casinos, which offer table games and slot machines parlors, known as “racinos”.  Speculators also highlight that casino jobs are likely to offer employees relatively low pay instead of wages that would enable economic uplift; federal labor statistics show that most gambling-related jobs average less than $30,000 per year.  Additionally, an indirect consequence is that locals may be lured by the casinos and lose income due to gambling addictions.  Lastly, conservationists express concern that these casinos will cause environmental degradation including severe damage to nearby woodland areas.

Although these concerns are legitimate and must be taken into account, the potential economic benefit of these casinos will likely outweigh the costs.  The Cuomo administration evaluated casinos in Pennsylvania and Maryland and used them to estimate employment growth in Upstate New York of nearly 3,000 permanent jobs and 6,700 temporary jobs in construction.  Governor Cuomo and his supporters insist that immense job creation will emerge from the introduction of casinos to the state.  Additionally, the benefits from the increased tax revenues will lead to increased education aid or lower property taxes in all localities in New York State, no matter where the casinos are located; a report by the Budget Division released before the 2013 casino referendum suggested that New York would collect an additional $238 million a year in revenue for these purposes.  The report also suggested that local government aid would increase by $192 million. Furthermore, the casinos will boost local economies and existing tourism infrastructure in Upstate New York, which has faced decades of decline.  In the Finger Lakes region, the casino will increase revenues for local businesses such as wineries, breweries, and the cheese trail located in the Seneca County area, specifically.  The project has already sparked new developments in the Tyre community such as the construction of a convenience store, gas station, auto dealership, and donut shop.

While the casino industry is beset with fierce competition and there are certainly disadvantages associated with gambling parlors, these casinos will likely boost tourism and local economies while allowing the state to capture millions of gambling dollars that are currently being spent elsewhere.  As a result, this casino project will provide a spark for economic boost, which will truly benefit the Upstate New York area.