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SEP 16- SEP 24, 2014

Gaming Industry Future Uncertain While City Pins Hopes on Comeback

By Mike Hudson

September 16, 2014

Why drive 100 miles from Erie PA. to Niagara Falls to gamble when Presque Island Downs and Casino has 2000 slot machines?

An editorial in the New York Times last month and the recent decision by Moody’s Investment Services to downgrade the future prospects of the gaming industry has some wondering whether or not the reliance of Mayor Paul Dyster on future casino income to cover long term debt is sound fiscal policy.

Thus far, the city of Niagara Falls has received around $175 million as the local share of slot machine revenues generated by the Seneca Niagara Casino since its opening in 2003.

Niagara Falls City Councilman Glenn Choolokian said the money has been squandered.

“I don’t think you’d find anybody who would say that the city is better off now than it was prior to the opening of the casino,” Choolokian told the Niagara Falls Reporter. “I’ve been saying from Day One that we have to be careful about how we spend the casino money.”

Indeed, aside from the North Main Street courthouse building, which ran millions of dollars over budget and has been plagued by structural deficiencies ever since, the as yet unopened Whirlpool Street train station and various subsidized rock concerts and community events have taken up a lion’s share of the money.

Thus far, not a single, permanent private sector job has been created.


Since the opening of the Seneca Niagara Casino, Presque Island Downs and Casino has opened in Erie, PA. providing a gambling venue for thousand who, in the early days, were bused every morning and afternoon from that Lake Erie city. With a full race track, 2,000 slot machines and green table games, it is located around 100 miles from the Seneca Casino.

Another nearby city that used to send gamblers to Seneca Niagara in great numbers was Cleveland, OH a little more than two hours away. But not so much since the Horseshoe Cleveland, with 1,600 slots and 89 green tables opened in May 2012. The long bus rides along the bleak, snow covered Lake Erie shoreline are largely a thing of the past as the Cleveland locals enjoy fun and games in their own back yard.

Seneca Niagara is facing increasing competition as new casinos open in cities where flocks of people used to come to gamble here. The full impact will be felt in the next few years.

Last month, as 17 proposals for four new casinos reached Albany, Moody’s issued a report downgrading the national gambling business from “stable” to “negative.”

The Times editorial was quick to seize on the timing.

"The fact regional gaming revenues excluding Nevada remained flat, despite further improvement in the economy and additional regional casinos throughout the U.S., is a strong indication that U.S. consumers will continue to limit their spending to items more essential than gaming, even as the U.S. economy continues to improve," wrote Moody's Senior Vice President Keith Foley in the report "Outlook Update US Gaming Industry: Moving to Negative Outlook on Weaker-than-Expected Gaming Revenue."

One of those new casinos will likely be opened in the Rochester area, which has been and is currently a big draw for the Seneca Niagara Casino. As with the gambling operations in Cleveland and Erie, even more money will likely be siphoned off.


But Seneca Nation of Indians President Barry Snyder Jr., undoubtedly with the aid of his highly paid public relations department, said the future of Native American casino gaming in the Niagara Frontier is so bright, he’s got to wear shades.

Snyder said the tribe’s three casino properties — Seneca Niagara Casino & Hotel in Niagara Falls, Seneca Allegany Casino and Hotel in Salamanca, and the Seneca Buffalo Creek Casino — attract more than 15 million annual visitors. Based on those totals, the casinos are luring almost double the volume of tourists to the Niagara Falls State Park every year.

With five new casinos slated for New York State alone, and another dozen opening or in the planning stages in New Jersey, Pennsylvania, Ohio and Massachusetts, one wonders what the tipping point will be for casino gaming in the Northeast. Are we nearing the stage when there will be more casinos than there are suckers to gamble at them?

Elsewhere, the Trump Plaza will become the third casino to shut down in Atlantic City, New Jersey, as early as this month. A Mississippi casino closed its doors recently, and state Comptroller Thomas Di Napoli warned that economic gains in communities where new casinos are built “may be offset by losses elsewhere,” the Times reported.

The Horseshoe Cleveland, which just opened in May, has 1600 slot machines. The loss of business at Seneca Niagara from the new Cleveland casino will not be known until the next Seneca quarterly payment is made to the state of New York.

DiNapoli’s concerns are echoed by leaders throughout the state. More casinos would seem, mathematically, to be a formula for reducing the revenue of already existing gaming operations.


While Niagara Falls Mayor Paul Dyster regularly uses 100 percent of the casino cash to fund extravagant new public works projects, rock concerts and to make ends meet in his bloated city budgets, the likelihood of future casino funds decreasing rather than increasing seems a good bet.

And, since Dyster has keyed many long term debt arrangements directly to the maintenance of current casino payments, that may be bad news for the taxpayers of Niagara Falls.

With the exception of about $12 million in casino revenue spent during the administration of former mayor Vince Anello, the remainder has been spent by Dyster.

“It’s just gotten to the saturation point,” New York state Sen. George Maziarz told the Reporter. “There are just too many casinos.”


The roll call of dead or endangered casinos along Atlantic Avenue in Atlantic City is growing so long that semicolons are now needed to recount which ones have closed or threatened to close and when. In chronological order the Atlantic Club Casino Hotel closed in January; the Showboat closed Aug. 31; the Revel, a $2.4 billion property touted by New Jersey Gov. Chris Christie, closed Sept. 2; Trump Plaza is set to close this month; and the Trump Taj Mahal is expected to close in November.

Adding insult to injury, Donald Trump is suing to have his name taken off of the Trump Plaze, which he built.


The new Seneca casino compact, passed by Albany lawmakers with no input from Niagara Falls officials or residents affected by it, extended the agreement to 2023. Dyster and other local officials are projecting $240 million in revenues over the period, and have linked a number of projects to the money coming in at current rates.

For years, economists and analysts talked in theoretical terms about "casino saturation" in the north-eastern United States. Well itís finally happened. If one looks at the dates casinos have opened, one will note how few were around in 2003 when Seneca Niagara opened and how many have opened recently.

“The people of Niagara Falls are going to be hit with a combination punch when they have to begin maintaining that new train station, just as casino revenues start to shrink,” Maziarz said. “Dyster, Grandinetti, Tom DiSantis and those who pushed for this will be long gone by then.”

Choolokian said that the cutoff of casino money while the state and the Seneca Nation battled over non-Indian slot machines at New York racetracks should have served as a wakeup call for Niagara Falls city government.

“We were looking at laying off 30 city workers and raising taxes,” Choolokian said. “Now the money’s coming in again and we’re spending it faster than we can get it. Just a year ago we were in the middle of a very scary situation and now it’s like nobody even remembers it.”

The city received $89 million from the state following its 2013 settlement with the Senecas. The bulk of it has now been spent.

“All of that money and not a single permanent private sector job has been created,” Maziarz said. “It’s a disgrace.”

Choolokian agreed.

“Niagara Falls was in competition with a number of other cities to get the casino,” he said. “What if we hadn’t got it? How bad would things be then.”


New York State Republican Chairman Ed Cox blasted Democrats for their dependence on casino cash in light of the withering prospects for the future.

"Andrew Cuomo's New York is the most taxed, most regulated, least business-friendly state in America, and doubling down on casinos at the expense of tax and regulatory reform proves that Andrew Cuomo prefers tightly controlling government contracts to freeing up the private sector to create jobs."

With uncertainty regarding the future of the gaming industry here, pinning budget projections to expected future revenues would seem to be fiscally unsound, as does the spending of current revenue even faster than it comes in.

That’s what we’re doing, however, and few seem to complain.

Rock concerts no one from the city attends, a museum dedicated to a phony Underground Railroad history that was supposed to open three years ago but never did and other prosaic projects foisted on an unsuspecting populace by the current administration have burned through the many millions quicker than the chain smoking, overweight nickel slots players can generate them.

Which is saying a lot.

Multiple attempts to reach Mayor Paul Dyster for comment on this story were unsuccessful. Repeated phone calls went unreturned.





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