Las Vegas-style casinos 'not a sure bet' for government finances, state audit says
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Las Vegas-style casinos in New York are "not a sure bet" for local government coffers, according to a state comptroller's report that says none of the four upstate met gross revenue projections in recent years.
The 19-page audit, released Thursday by State Comptroller Thomas DiNapoli, found the casinos distributed a total $176 million to local governments between 2017 and 2022. Gaming revenue had the most impact on the finances of the three smaller host towns, which were able to reduce property taxes significantly, the report shows.
The report offers insight into the potential challenges and benefits of Las Vegas Sands' proposed $4 billion casino-resort on the site of the Nassau Coliseum.
Sands executives estimate the resort would generate $2 billion annually. Five percent of gaming revenue would go to Nassau, 5% to Suffolk County and 10% to the Town of Hempstead, they said.
At minimum, Nassau would get $50 million annually and Hempstead Town $20 million, according to the county's lease agreement with Sands.
Nassau and Sands closed last month on a 99-year lease for the 72-acre property, commonly known as the Nassau Hub. The county received a one-time payment of $54 million to be deposited in its general fund, with its use to be determined.
DiNapoli's audit looked at properties that were awarded gaming licenses in 2015 and 2016: Rivers Casino and Resort in Schenectady, del Lago Resort and Casino in Seneca, Resorts World Catskills Casino in Sullivan and Tioga Downs Casino in Tioga. It showed they all failed to meet revenue projections after fully opening in 2017 and 2018.
In 2019, Rivers Casino projected $16.4 million in tax revenue to its local government but the actual tax revenue was $11.7 million. Resorts World had projected $20.7 million, actual was $11.2 million; del Lago projected $16 million, actual was $11.2 million.
Only Tioga Downs met its local government gaming tax projection of $6.4 million, according to the report.
In the three host towns — Nichols, Tyre and Thompson — gaming tax revenue made up 30 to 60% of total revenue, allowing them to "dramatically cut property taxes," the report said.
But in the larger host city of Schenectady, as well as the four host counties, gaming tax was a much smaller percentage of local revenue, just 1 to 3%, the report said. For regional non-host counties, casino taxes generally amounted to less than 0.5% of their total revenue, it said.
"Casinos are not a magic fix that will solve local fiscal challenges," DiNapoli said in a statement.
DiNapoli, a Democrat, said the report could help communities downstate "avoid the pitfalls that arise with misguided expectations about the public benefits of casinos." Three licenses are up for grabs in the downstate region.
Sands executive vice president Ron Reese said comparing upstate casinos to Sands' proposal is "apples to oranges."
He said the amount Sands plans to spend on its development is far higher than the most expensive upstate casino, and its proposed high-end restaurants, spa, live music venue and proximity to two international airports will draw visitors beyond the region.
"We don't build regional or local casinos like they have upstate," Reese said.
In addition to Sands, more than 10 entities in New York City and Westchester announced earlier this year their interest in bidding for a license.
Sands is expected this month to submit an application to the Town of Hempstead for a land-use permit that will trigger a state environmental review and possible zoning changes to allow a casino.
Rich Catalano, an accountant who lives in Garden City and is a member of the grassroots opposition group "Say No to the Casino," said he's skeptical of the company's $2 billion revenue estimate.
"Seems exaggerated," Catalano said. "It's not like we're going to attract people from across the country, so really it's going to be sucking dollars from local residents."
