New York State’s four commercial casinos — already reeling from being closed since mid-March due to a worldwide pandemic — were sent reeling again Monday over news that Gov. Andrew Cuomo has removed casinos from “Phase IV” reopenings upstate.
The decision came even as the state has avoided the uptick in cases seen in most states — most prominently in Florida, Texas, Arizona, and California.
Only one new case of a positive test was announced Monday in the Hudson Valley, home of the Resorts World Catskills casino. Fewer than 1% of tests statewide resulted in positive results, and only nine new deaths were reported in a state that for months registered 100-plus deaths per day.
“The numbers show we are right where we want to be, but what’s happening around the country is a cold reminder that we need to continue being cautious and smart and disciplined — no one wants to go back to the hell that we went through,” Cuomo said in a statement.
The Phase IV reopenings upstate allow resumption of higher education, “low-risk” indoor and outdoor arts and entertainment, media production, and professional sports with no fans.
But casinos — along with movie theaters, gyms, and malls — did not survive the revised phasing plan.
Cuomo playing it safe — too safe?
Cuomo said that evidence of a spread of COVID-19 in places with air conditioning played a key role in his decision.
In March, Cuomo said that New York and New Jersey, at whatever point they rebounded from the first wave of cases, would “reopen together.”
But that has not happened when it comes to casinos, as Atlantic City’s casinos reopened — with significant limitations — last week.
Both states’ casinos seem well located in that none are within an hour’s drive of the “ground zero” region of New York City.
New Jersey Gov. Phil Murphy on June 29 reversed a previous decision to allow for indoor dining and alcohol consumption at casinos.
Still, the casinos, which are limited to 25% capacity, are at least able to bring some employees back to work after a long layoff.
NY casinos crippled by a lack of online gambling options
A different philosophical decision by Cuomo also is haunting New York’s four commercial casinos (Resorts World, Rivers Casino in Schenectady, del Lago in the Finger Lakes, and Tioga Downs in the Southern Tier).
In April and May, New Jersey operators took in $165.9 million in online casino gaming revenue and another $12.5 million from mobile sports betting — the latter figure sagging badly due to the lack of NBA, NHL, and MLB contests.
Their New York State counterparts, meanwhile, collected no revenue at all because of Cuomo’s longstanding opposition to online wagering. More than a year ago, Cuomo called the amount of tax revenue generated from mobile sports betting a mere “rounding error” in terms of the state’s annual budget.
Maybe so, but closure of any of the state’s casinos would lead to the loss of up to 1,000 jobs per site.
Resorts World Catskills and del Lago in particular have been dogged by talk of possible bankruptcy even since before the pandemic shut them down.
A debt level of $400 million was reported by Resorts World last year, including $73 million in the first six months of 2019. A Securities and Exchange Commission report referred to the possibility of bankruptcy before a complex restructuring led to the casino forestalling that scenario — for now.
On March 20, parent company Genting Malaysia announced a $40 million cash infusion for Resorts World as part of another refinancing. By then, total debt had risen to $540 million.
More trouble ahead for the Catskills casino?
Back in 2014, Resorts World appeared to receive a lucrative break when state gaming regulators declined to approve any sites closer to New York City and the New Jersey border for one of the four casino licenses.
But the same law allowed for up to three licenses to be approved beginning in 2023. MGM Grand purchased Yonkers Raceway and its Empire City racino site in 2019 and has made no secret of its desire to seek a full-fledged license to add live-dealer table games and sports betting to its bank of thousands of slot machines.
Both Yonkers and Resorts World at Aqueduct — a sister property to the Catskills site — have been rumored to be willing to pay up to $500 million each to receive such licenses. One expert testified at a New York state Senate hearing in February about his rationale for putting a $1 billion figure on such licenses for those sites.
If those licenses are approved, it could be the final blow for Resorts World Catskills, which has underperformed projections since it opened in 2018. Sports betting was added last fall, but those numbers have been dismal.
Resorts World Catskills actually managed to lose $3,304 on sports betting in two weeks of March action before its closure — though that was an improvement on a $145,008 loss in February.
A portion of that revenue comes from New York City residents who cross the Hudson River to place their wagers legally, then return home to watch ballgames.
More than a half-dozen New York state tribal casinos, including three each operated by Oneida Indian Nation and Seneca Nation, reopened on a limited basis last month.
Photo by George Burns / Shutterstock.com
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