After a year of claiming there was nothing to be concerned about, del Lago Casino is officially concerned.
The casino brought in roughly 44 percent of what it projected for first-year earnings. The good news was so hard to come by, the casino resorted to taking credit for traffic jams. Yet, in all that time, the casino and its lawmaker supporters insisted things were fine.
On Tuesday, the casino decided it was time to ask for help from the state before things get even worse.
Casino owner reached out to state
According to the Chronicle and Democrat, del Lago owner Tom Wilmot was not forthright with exactly what he wanted from state lawmakers. It could be a more favorable tax rate. What Wilmot did tell the publication is that the casino’s future is in jeopardy.
“I think we need some help at this point, and what the future holds, time will tell.”
Wilmot clarified things are not so dire that del Lago cannot pay their bills. However, looking ahead, it is clear the current state of the property is not sustainable.
This is not news to most people. Credit agency Moody’s reported the casino’s problems in January. After looking into del Lago’s finances, Moody’s downgraded its rating of the property to “negative.”
Here is what Moody’s had to say at the beginning of the year:
“Despite the fact that del Lago Resort Casino opened on time and on budget and has substantially grown total gaming revenues generated in its primary market area, the property’s revenue ramp-up is well below Moody’s expectations…Given del Lago’s current performance, Moody’s is of the view that without a substantial improvement in revenue, del Lago will not be able to achieve a level of performance that can support its existing debt capital structure.”
The revenue struggle is not limited to del Lago. Both Rivers Schenectady and Tioga Downs fell short of expectations. The new Resorts World Catskills Casino is arguably faring even worse. So far del Lago is the only one asking for help from the state though.
After pushing casino bill, Pretlow blames casino for its problem
Assemblyman J. Gary Pretlow was one of the key politicians who pushed through the New York casino bill. However, he is not taking much of the blame when it comes to Wilmot and his property’s problems.
“I think it was a bad business decision to move there in the first place, but they knew what they were doing when they got into. They made their bed, basically,” said Pretlow.
What Pretlow fails to mention is that most people cite issues besides the casino’s location. Namely, the oversaturation of New York casinos. With so many properties, cannibalization is something those in the industry repeatedly bring up.
The deflection of blame is not surprising from Pretlow. Back in November, he wrote a letter to the state Comptroller, expressing concern at how wildly off revenue projections were for the new properties:
“It is critically important that we have reliable and realistic long-term revenue projections — so we can prevent the recent gaming expansion from creating an arms race for more and more tax subsidies.”
“When our state passed legislation to expand gaming, our decision was based on projections of robust revenues and promises that casino development would not place new burdens on taxpayers. The last few months, however, have called into question those projections and promises.”
It looks like Pretlow’s fear is coming to fruition. The question now is what the state is or is not willing to do about it.