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SEP 16- SEP 24, 2014

Competitions Stiffens for Seneca Niagara As New Casinos Open Just About Everywhere

By Mike Hudson

September 16, 2014

Since the Seneca Niagara Casino opened on New Year’s Eve, 2002, the gaming industry as it pertains to Western New York has undergone significant changes. No fewer than 17 new casinos have been proposed, are opening or have already opened in the Northeast – Midwest region that Seneca Niagara once viewed as its own private bailiwick, and that does not bode well for future revenues here.

Perhaps the most interesting is the Presque Isle Downs Racetrack and Casino in nearby Erie, Pa. When the Seneca Niagara Casino first opened, buses arrived from Erie morning, noon and night, loaded with senior citizens and younger people anxious eager to piddle away their Social Security and welfare checks.

Now those buses are rarer than hen’s teeth.

But perhaps the most interesting thing about Presque Isle Downs is the way in which the Commonwealth of Pennsylvania is using the state share of the revenue from the operation. Under the contract, the track and casino’s private owners, MTR Gaming Group, get to keep 45 percent of the casino revenues while the Commonwealth gets 55 percent.

And the bulk of the Pennsylvania share goes toward reducing local property taxes in Erie and the surrounding communities.

Elsewhere in Upstate New York, hearings will be held on Sept. 22 in Albany, Sept. 23 in Poughkeepsie and Sept.24 in Ithaca to get input on the locations of four new casinos authorized under legislation pushed by Gov. Andrew Cuomo. But the Finger Lakes, Rochester and Albany – all less than a day’s drive from Niagara Falls – have been mentioned as top contenders.

Some are dubious.

"Clearly New York is getting into the market late," said Richard McGowan, a Boston College economics professor who studies casino gambling. "So the primary thing they are doing is trying to reclaim revenue from other states."

In Northeastern Ohio, Cleveland now has three casinos close by. The Horseshoe Casino Cleveland opened in 2012, the Thistledown Racino, and the Hard Rock Casino, both of which opened in 2013, make the 200 mile drive to Niagara Falls a worrisome bother.

It should be noted that none of the casinos mentioned are “Indian casinos,” which have a bad connotation among serious players as places where mom and pop go for the buffet and to feed nickel slots in return for watered down drinks. Given a choice, thoughtful amateurs and high rollers alike will always prefer a privately- run gaming operation to those operated by Native Americans.

Elsewhere, three casinos are set to open in tiny Massachusetts, Mohegan Sun is talking about opening a second and of course there’s the competition directly across the mighty Niagara River, in Niagara Falls, Ont., where the Fallsview Casino Resort and Casino Niagara remain popular attractions on the glitzier side of the Rainbow Bridge.

The Senecas themselves have provided their own competition, with casinos in Salamanca and Buffalo, although we can’t say we know anyone who’s been to the one in Buffalo.

The law of diminishing returns is as certain as Newton’s Law of Gravity. There are only so many people interested in sitting in front of video slots terminals for hours on end, feeding them money, chain smoking and drinking whatever it is they’re handed, as romantic as that all might sound.

And governments who bank on such activity as a viable means of future revenue do so at their own peril.

Mayor Dyster, take note.





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