At first glance, Upstate New York may seem like a dream location for any business functioning in the entertainment sector. But things aren’t always what they seem to be at first glance. Empire Resorts, parent company to NY casino Catskills, has reported a loss totalling a massive $37.3 million for the quarter ending 30 June.
Despite the fact that net revenue earnings appeared to be on the up swing, the insanely high operating costs seem to be the main problem in the equation.
Notable is the fact that Catskills is the fourth non-Indian casino to have opened doors in Upstate New York in the last two years. Also worthy of mention is the fact that Moody’s investor services sector earmarked the Upstate New York market as having been oversaturated by land-based gaming venues back in 2015.
At the time, casino endeavours were already functioning on a pinch and operations were for the most part, hanging on by a thread. During that same year, New York’s Gaming Commission was in the process of reviewing applications for the opening of 4 new upstate casinos, all recommended by a special committee during 2014.
At the time of Moody’s predictions, the New York Gaming Association, at the time headed up by James Featherstonhaugh, issued a reply to the statements made by Moody’s, saying that competition was healthy and that any time that more gaming role-players entered the market, it brought about operational challenges.
The association seemed to genuinely be of the opinion that the market could make provision for even more new venues to enter the playing field, and that this would stimulate growth instead of over-saturating the market.
New York’s siting board seemed to be more in tune with the market at the time, having recommended approval for the opening of only three new casinos in the Upstate area over the course of the period 2016 to 2018. At the time, applications had been lodged for four new venues, but the board recommended the approval of three only, for fear that the market would undergo a process of cannibalization if four new developments were to be approved.
Catskills casino seems to be bearing the brunt of all the bad news.