This should be a huge warning to New York state officials, who want to expand gambling. Casinos in Niagara Falls, Canada have suffered a dramatic revenue drop. The Buffalo News reports:
Profits from Canadian gambling facilities close to the U.S. border have dropped from $800 million to $100 million over the last decade.
And at resort casinos like the Fallsview and Casino Niagara in the Falls – built in the last 20 years – profits have dropped by more than $600 million alone.
The stunning decline is blamed on competition from the Seneca Niagara casino on the U.S. side, the requirement to have a passport or enhanced license to cross the border, and the weakening of the U.S. dollar.
There’s such a thing as having too many casinos. New York’s Indian casinos took in less money in 2011. A New Jersey casino just went bankrupt. New York should be very worried the market is already saturated.
Urban v. Rural
Meanwhile, the Boston Globe has an interesting article about whether casinos should be located in cities or rural areas:
“The real secret [to casino profitability] is to get people to stay in the seat longer, and when they win to have them pump the money back through,” (casino consultant Gary Green) said. “In the rural environment, I’m more likely to say, ‘Well I drove all the way out here and I did really well on this machine so I think I’ll stay a little bit longer.’ ”
But Jacob Miklojcik, a casino expert and president of Michigan Consultants, favors city casinos. “I prefer urban only because of job creation,” he said. “That is where the [unemployed] are. What a casino can do . . . is provide a lot of jobs for people without college educations. In a city or urban areas, if developers can make a promise to provide the jobs locally, that’s what matters.”
Miklojcik said the push for “destination resorts” in an attempt to draw large numbers of out-of-state tourists “is way, way overdone.
A problem with the urban casino, said Las Vegas casino consultant Andrew Klebanow, is “we just haven’t seen it done right yet.” With few exceptions, most are designed as “islands” that happen to be within the city limits, but are not connected to the neighborhoods around them: Customers arrive, park in a garage, walk inside, and don’t step out until it’s time to drive home.
This article is interesting when you look at the governor’s desire for destination casinos Upstate. Close to home, the rural Finger Lakes Gaming & Racetrack and Batavia Downs desperately want to become full-fledged casinos. There’s no public push to put a casino in downtown Rochester, but the Senecas are reportedly negotiating for rights for one.
The urban v. rural debate is also interesting because it shows a rural casino isn’t about economic development. It’s about maximizing cash for the state.
Links of the Day:
– A Brooklyn child was attacked with acid 40 years ago. He has led a remarkable life.
– Their wives are first cousins. But Carl Paladino and Brian Higgins had an incredibly bitter falling out.
– There’s a poker club in the Strong Memorial Hospital heart transplant wing.
– It’s a tough market for new lawyers, especially in Buffalo, which has a law school.
– Thomas Cole’s Genesee Valley paintings are masterpieces.