Bring Online Poker to New York Show your support

Resorts World Catskills Spirals Toward Trouble With Massive Revenue Shortfall

Maybe del Lago won’t be the first New York casino to go belly-up, after all.

Empire Resorts recently filed a troubling financial report covering Resorts World Catskills and the attached Moniticello Raceway. The billion-dollar casino complex is the newest in NY, and its situation is already looking grim.

The filing reveals sharp losses and mounting liability in excess of a half a billion dollars, raising serious questions about the property’s future.

Empire Resorts deeply in debt

The report looks bad from top to bottom.

Since opening Resorts World in February, Empire Resorts has lost more than $58 million. It’s trending the wrong way, too, with more than $37 million of that loss coming during the fairer-weather months of Q2.

Prior to opening the casino, Empire Resorts projected $277 million in first-year revenue. Estimates from some of its consultants were even more aggressive, surging past $300 million.

Through the first half of the year, Resorts World earned just $82 million in net revenue, posting losses of $41 million from gaming operations. Interest payments added another $17 million to that red number.

At the time of filing, the company held $16.7 million in cash on hand and assets totaling $30 million. Liabilities and stockholder equities, meanwhile, exceed $780 million. The majority of that total is attributable to long-term debt stemming from development and construction.

The company responds

The company’s statements don’t exactly paint a rosy outlook for the future, either:

“We cannot be certain that our business will generate sufficient cash flow from operations, that our anticipated earnings from the Casino will be realized, or that future borrowings will be available under our existing debt arrangements or otherwise to enable us to service our indebtedness or to make anticipated capital expenditures. As a result, we may need to raise additional capital or incur additional indebtedness, including from our largest stockholder or by issuing securities …

Our future operating performance and our ability to service our debt will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.”

Yikes. Empire Resorts received a credit downgrade from Moody’s Investor Service in June, further inhibiting its forecast.

Results were reported by NYup, and you can browse the full SEC filing here.

  • RANK
  • BONUS
  • FEATURES
  • EDITOR RATING
  • PLAY

Financial help is unlikely for New York casinos

Resorts World is not the first of the commercial NY casinos to ask for help, and it likely won’t be the last. All four are struggling just to pay their bills, let alone meet revenue projections.

Regular readers are likely familiar with the ongoing issues at del Lago in Waterloo. Co-owner Wilmorite has asked for assistance on at least two occasions since opening early last year, but the state has so far refused to intervene. Rivers Casino received a similar stiff-arm, too.

Resorts World hasn’t gone begging in Albany as far as we know, but that time may be approaching. Facing the bad news, Executive Vice President Charlie Degliomini tried to frame the report in a conversation with NYup:

“Realistically, you should wait about three years after all the pieces are in place to make a qualified analysis. We are still ramping up here. It will take some time to have stability.”

Ongoing expansion at Resorts World Catskills

Indeed, the property has been undergoing expansion since opening, including a $33 million project slated for completion in December. A proposed $150 million waterpark and hotel should be ready next year, too, and the new amenities could help turn the tides.

Degliomini also cited the job creation (1,600 employees) and state tax payments as counterpoints to the revenue gap. “By every measure of why we were selected at this location, we are a success,” he said.

Each casino owner will measure results differently, but a $60 million shortfall in six months sure doesn’t look like a success. And given lawmakers’ reluctance to offer assistance to its competitors, Resorts World is likely on its own to fix the problem.

Eric Ramsey

About

Eric is a reporter and writer covering the NY gambling industry, online poker, sports betting regulation, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.