Report urges caution in projecting casino revenue

Created: 05/30/2014 3:24 PM WHEC.com
By: Associated Press

New casinos in upstate New York will face challenges in drawing customers, and the state should be cautious in making revenue projections, according to a state comptroller's report released Friday.

The gambling report comes as the state accepts applications from developers for four upstate casinos, which will be chosen this year.

Gov. Andrew Cuomo has promoted the casinos as a regional economic boost and a state revenue generator. But the report said uncertainty over location and customers, as well as competition with other gambling operations in a crowded market, make it hard to quantify the new casinos' financial benefits.

"Given the experience in other states, where casino revenues have been lower than expected, the state will need to use caution in projecting new revenues and any expenditures based on such resources," according to the report.

The state has estimated that the law ushering in the casinos will bring in $238 million annually in additional state aid for education and $192 million a year more in aid to local governments. The report said that legal gambling activity in New York totals well over $36 billion annually.

Casinos are authorized for the Albany-Saratoga area, the Southern Tier-Finger Lakes region and the Catskills and mid-Hudson Valley.

The comptroller's report said upstate regions may have greater difficulty attracting large numbers of customers because of their distance from population centers. Also, much of the revenue will come from in-state residents, and a large portion of the money spent on gambling simply would have been spent on other consumer purchases.

The report from comptroller Thomas DiNapoli's office echoes industry analysts, who see challenges in opening casinos in the already competitive Northeast market.

New York already has five Indian casinos and nine racinos with slot-like video lottery terminals.

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