Del Lago Resort & Casino creates jobs though falling short of projected gambling revenue, while impact on Finger Lakes Gaming & Racetrack is mixed

Seneca County officials are basking in benefits from the county’s new cash cow, del Lago Resort & Casino. The $440 million casino with hotel, spa and perks galore — 1,956 slot machines, gaming and poker tables, entertainment center and more — has created jobs and generated cash since it opened Feb. 1. There is nearly $6.5 million more in the county coffers to run the government and provide services, according to Seneca County Manager John Sheppard.

On jobs, too, a drop in Seneca County unemployment is directly attributed to del Lago. The New York State Department of Labor reports the unemployment rate dropped from 4.4 percent in October 2016 to 3.9 percent this October, giving it the fourth lowest unemployment rate out of the state’s 62 counties.

“We are thrilled to see that the unemployment rate for Seneca County has decreased, as it’s largely due to del Lago Resort & Casino hiring hundreds of Seneca County residents,” said Seneca County Board of Supervisors Chairman Bob Shipley. Shipley also noted a spark in economic growth and major development along Routes 318 and 414.

Neighboring counties are also benefiting, according to del Lago, with nearly 400 of its employees coming from Cayuga, Ontario and Wayne counties.

“More than 1,200 people from the region are currently employed at del Lago Resort & Casino, and that number continues to grow,” said Jeff Babinski, del Lago executive vice president and general manager.

“In addition, we know that hundreds of jobs have been created at new and existing businesses,” added Babinski. He mentioned restaurants, wineries, retail outlets, service providers and others throughout the region benefiting directly from del Lago’s opening in February. “And that number, too, will continue to grow,” said Babinski, who lives in Canandaigua.

 

Crowded market

On the flip side to the fanfare are other factors pointing to a less than rosy picture. The $113 million del Lago generated in gambling revenue in its first nine months fell short of its projected $263 million. Two other new gambling venues in upstate New York missed their mark as well. Some blame a crowded market.

At Finger Lakes Gaming & Racetrack, the long-established thoroughbred horse-racing track and racino in Ontario County, the heat was on months before del Lago opened. Competition from del Lago was projected to steal some 20 percent or more from Finger Lakes. It wasn’t even clear there would be a racing season in 2017 until an 11th-hour agreement was made containing a two-year plan to help FLGR over the hump.

“Finger Lakes Gaming & Racetrack has faced stiff competition for the regional gaming dollar in 2017,” said Steve Martin, regional director of marketing for FLGR. In an increasingly competitive upstate New York gaming market, most recently the year-over-year declines in gaming revenue are about 20 percent at FLGR, he said. Martin said there will be “additional challenges” as the newest competitors fine-tune their operations, fully engage their marketing and put their offerings to full use.

Aside from five full-scale Indian casinos, New York is home to ten “racino” horse tracks with video lottery terminals that includes FLGR in Farmington, which is a 27-mile drive from del Lago .

“Obviously there is a pie that is divided up too much,” said Alan Woinski, president of Gaming USA Corp., a New Jersey-based gambling consultancy. A spokesman for the state Gaming Commission said it will be more accurate to analyze third-year revenues, when the casinos are more established.

Del Lago spokesman Steven Greenberg noted that their hotel only opened this summer and that they are confident about growth in 2018. Woinski noted that competition will only increase next year. A fourth $1.2 billion casino resort selected by state officials is set to open in March in the Catskills, about 90 miles northwest of New York City. Another casino less than an hour from the New York border in Springfield, Massachusetts, is set to open later in 2018. And the Oneidas are set to open a second mini-casino near Syracuse in the spring.

“It’s very hard to see a situation where things improve,” Woinski said.

At FLGR in Farmington, Martin is keeping his chin up. “We are proud to continue to remain a centerpiece of jobs and economic activity in Ontario County,” he said

Economic impact from FLGR is estimated to be $80 million annually for the regional economy.

“Our focus remains on providing and enhancing what our guests tell us is the most comfortable and convenient gaming and entertainment experience in the region,” Martin added.

 

‘Damage was not as great’

Based on the agreement to save thoroughbred racing at FLGR and soften the blow from the opening of del Lago, FLGR was to contribute a minimum of an additional $600,000 and up to $1 million for purses toward the racing operation — subject to the impact to its gaming revenue in 2017. Additionally, the New York Breeders Association was to contribute $1.5 million for purse enhancements and del Lago Casino & Resort was to give $447,000 per year over the next two years.

All parties fulfilled their obligations.

What’s more, David Brown, president of the Finger Lakes Horsemen Benevolent Protective Association, said FLGR was able to give the full $1 million for purses. That’s because the amount of revenue del Lago competition took away from FLGR was less than 30 percent, while some projections had put the loss closer to 40 percent.

‘“The damage was not as great” as feared, said Brown. Because it’s a two-year agreement, the 2018 season will be “a mere image of 2017,” he said.

The challenge at the moment, for the racing side, is surviving the winter, Brown said. That, along with finding a long-term solution for past 2018.

The number of racing days this season was cut, from 155 to 145. In addition to 10 fewer days, the number of races dropped as well. That meant less revenue for the horsemen. Now, trainers, owners and others in the community whose livelihoods rely on thoroughbred racing at FLGR are hurting. Most of the people live in Ontario County and surrounding communities. “A lot of them are in trouble,” Brown said. Finger Lakes Horsemen Benevolent Protective Association is looking for ways to help them through the winter.

“We can’t bring people in from other states like Ohio and Pennsylvania,” Brown added. That’s because insurance costs in New York state are higher than other states. “So we are trying hard to keep people who are already here,” he said. He added that Finger Lakes is a great place to work and it’s a leading track nationally for horse safety, with few breakdowns compared to the rest of the country.

“We pride ourselves on that,” Brown said.

 

Turf and optimism

Brown said talks are underway to improve racing at Finger Lakes, to make investments that will pay off for the long-term future at the track — to carry on the rich tradition of racing there, where 2017 marked the 56th season.

Creating a turf track is one avenue being discussed locally and in Albany. Brown said the Finger Lakes Horsemen Benevolent Protective Association voted to put $1 million toward a turf track. In all, such a project would cost $4 million. The hope is that FLGR owner Delaware North and other supporters might help out.

It would pay off, Brown said, because it would boost the number of horses that race at Finger Lakes. Many horses can only run on turf.

Ontario County Board of Supervisor Chairman Jack Marren said he was in Albany recently for a meeting of the New York State Association of Counties. Feedback from around the state is that the casinos and gaming sites, with so many in place, are not hitting their marks, he said. Marren said he is concerned for FLGR, one of Ontario County’s largest employers.

Ontario County Economic Developer Mike Manikowski said the “first blush of del Lago was a big deal. It’s still a big deal.”

Even so, Manikowski sees del Lago as drawing more business from the Rochester market over the long haul and he is optimistic about the future for FLGR. Manikowski pointed to the two-year deal to help FLGR weather the first couple years with del Lago and the support FLGR has from owner Delaware North, a giant company with a proven track record.

State Senator Pam Helming, R-Canandaigua, who was involved in brokering the two-year deal to boost FLGR, said she is “committed to working with stakeholders” toward the long-term health of the Farmington venue.

“The data gathered this year and next year will determine the future of this agreement,” she added. “I will continue to advocate that these businesses and organizations work together to develop a long-term solution. It is critical that we preserve racing and gaming jobs at Finger Lakes Racetrack. Racing has a tremendous positive economic impact for our local farms and small businesses.”

Collectively, the gaming facilities “provide thousands of jobs for local families and help drive tourism and economic development,” Helming said. She added that she has met with representatives from the New York Racing Association (NYRA) to make them aware of the issue.

“Finger Lakes Racetrack plays a key role in the success of New York's entire racing industry. Many of the horses raised here locally race at tracks across New York and the success of Finger Lakes Racetrack is important for the success of the horse breeding and racing industry across New York state,” Helming said.