Don’t panic, say the owners and operators of the new Resorts World Catskills casino. It’s early.
Can we at least worry a little considering the numbers that came out in a story in the Times Herald-Record over the weekend?
These were not “early” numbers in the sense that nobody expected much at this point. They were not unrealistic estimates imposed from outside or above.
The take from table games and slot machines was about half of what the casino operators themselves had hoped they would be at this early date. They were well below the amounts that the people behind the casino expected when they were seeking one of the coveted licenses from the state. All this talk about the coming completion of the water park and more hotels and increased marketing are not comforting because all of those developments were not supposed to be in place by now. Once they are, the expectations for revenue will be even higher, making them that much harder to fulfill with such a poor start.
While it is possible that the poor showing will be eclipsed by dramatic improvements over the next months, nobody who knows the industry is promising that.
Ryan Eller, Empire Resorts' president and CEO, said “The results are indicative of a challenging marketplace … There’s a huge market out there, and we’re developing better ways to go after it.”
They need to do that quickly because the people who determine the ultimate bottom line — the ability to pay off debt — are already squeezing.
Moody’s, the credit rating agency, is already making it harder for the casino, downgrading the operating company’s debt to a low “negative” rating for debt “in poor standing” and threatening to push it lower should earnings remain weak.
Even the comforting words from Moody’s were on the cold side, saying that the issue is not the quality of this casino but something impossible to control, market saturation which has had similar depressing effects on the other new casinos open in the state.
Sports betting might help if New York ever got around to it. But New Jersey has already jumped ahead on that front with reports over the weekend that action on sports contests is brisk across the border, especially at the Meadowlands complex which is much closer to the metropolitan area.
And for those looking farther into the future, the prospect of Yonkers Raceway and the Empire City Casino being operated by MGM Grand in preparation for the day when the state issues more licenses indicates that the market saturation which poses such a challenge today will only get worse.
If there are plans to meet this competition and thrive, we need to know about them. If there are plans to scale back the ambitions, to operate a more modest family-friendly resort with a water park, some golf courses, hotels and restaurants and some gambling as one of the many possible activities, we need to know that as well.
The community and the state have given the casino everything it asked for. We need to know what the casino will do to make this relationship as good as promised.