RSS Feed for this Blog

Thursday, August 07, 2014

Meadowlands Casino Could Be the Beginning of the End

I was at the Meadowlands for the Hambletonian on Saturday.  I had last been there just after the new building opened and wrote about it here. There was no live racing that day, and only the first floor was open for simulcasting (and parts of even that floor were not yet quite finished).   As I wrote, it was OK; the same feel as the old building.  Just a typical ol' track, if a new, freshly-painted one with a lot of TVs.

But this was the first time I was there for live racing and the first time I saw any of the upper floors. And I'd have to say that it's a solid execution of what Jeff Gural intended - a facility with a bunch of attractive options for dining and drinking, and for entertaining friends or clients or employees. Particularly impressive amongst the dining/drinking choices was Trotters, a lounge/restaurant for members only (and where security was lax late in the day so I got to go in and check it out). Horsemen are encouraged to bring owners there when their horses race.  In addition to the other restaurants, there are also skybox suites with a great view of the action, along the lines of those at arenas, for groups of 10-60.

Where Gural really nails it though is up on the roof - the Victory Terrace. It's a large outdoor space with plenty of seating, a bar pouring generous drinks, and a great view of the racing.

Here's the view of the stretch drive of the Hambletonian, with Trixton edging away from Nuncio.

And here's another view.....hmmm, not quite sure what was going on here.

 I am not sure if they have live music up there, but they certainly could (and should).  And it stays open late - until 2 AM on Fridays. It's a fantastic racetrack hang; I ended up spending most of the day there.  I'd go as far as to say that it reminded me of what was perhaps my favorite racetrack hang ever - the terrace bar up on the top floor of the old Gulfstream clubhouse, overlooking the first turn. Ah, those were the days...

And while the crowd up there on Hambo day was perhaps not a typical one, it was most definitely a young crowd having a lot of fun.  In fact, it looked like those pictures of young people laughing and having a great time that you see on casino websites (even though you don't actually see it in the casino itself).

In all, it was a very good day; the track was crowded - the attendance was announced as 20,764 - which I presume is accurate and that they weren't counting anyone who had season tickets for the Nets when they played at the arena -  but not oppressively so.  And there were no issues with wireless or cell service anywhere in the facility.

Gural came down to the grandstand apron to be interviewed for the simulcast feed early in the card, and I was a bit surprised when the subject quickly turned to casinos.  He spoke about how the earliest there could be a referendum would be November of 2015.  While he is the operator but not the owner of the Meadowlands, he stands to profit either way; either as the operator of a casino or the recipient of a consolation prize of $100 million to reimburse him for constructing the new building. (Good negotiating there.)  This is a good article from last week on North, with a lot of information on a possible Meadowlands casino from writer John Brennan.

Well, a casino at the Meadowlands.....or even just the eventuality of one should it be approved via a vote next year......could very well be the tinder to spark the conflagration that will inevitably bring the whole casino house of cards in New York crashing down.  We've heard Sullivan County developers lament that an Orange County casino would siphon off potential customers from NYC given its proximity; the Tuxedo site, for example, is only 40 miles or so from midtown.  But the Meadowlands is 5 1/2 miles from the Lincoln Tunnel.  What kind of an effect would that have on a casino in either county?  (Though there are some times that it probably takes one longer just to get through the tunnel!)

Besides, the very second that a referendum passed in New Jersey, we'd start to hear the usual talk about having to keep gambling dollars in the state.  That would, without a doubt, lead to an acceleration in the timeline for a casino in or near the city itself.  Casinos downstate are not supposed to happen for seven years in order to give the upstate facilities a period of exclusivity to benefit the economies of the communities.....but that already went down the drain when Cuomo allowed Orange County to get involved.  When there are casinos at, as seems likely to me, Aqueduct and Yonkers, whether it's in three, five, or seven years, what is that going to do to the casinos upstate?  And to any upstate economies or employment that may have gotten a boost in the meantime?  Yes, we're told that the upstate casinos will be these grand facilities with many attractions for family vacations. But whether that would be enough to induce casino gamblers to travel surely remains to be seen.

Of course, this is all still quite theoretical.  A recent poll showed New Jersey voters to be quite tepid to the idea of casinos outside of Atlantic City (though a bit less so about one at the Meadowlands than at Monmouth) (not that those would be the only possible sites).
Only 42 percent of those polled favor the idea.
“New Jersey has a couple of reasons to be skeptical about opening new casinos outside of Atlantic City,” said Dan Cassino, a professor of political science at Fairleigh Dickinson and an analyst for the poll, in a report about the findings on the college's website. “Increased competition is only going to hurt Atlantic City more, and casinos just aren’t the revenue source for the state that they were ten or fifteen years ago.” [Star Ledger]
- Interesting story over the weekend in the Pittsburgh Tribune-Review about the effects of slots in Pennsylvania some ten years after they were legalized in the state.  It shows that, even if casino revenues are plentiful indeed, they don't always fulfill the promises that were made. 
Lawmakers promised homeowners an average of $300 a year in property tax relief when they passed the law legalizing 14 casinos statewide on July 4, 2004. The average turned out to be about $180, according to state Department of Education data.
Property tax cuts make up the largest single piece of the $9 billion casinos have paid in taxes, but billions more flow to county and municipal governments, subsidize horse racing, pay down Pittsburgh International Airport's debt, and cover the operating deficit at the David L. Lawrence Convention Center, Downtown, among other projects. Tens of millions of dollars goes to volunteer fire and EMS departments, police agencies, and drug and alcohol programs.
What really caught my attention here was that $9 billion figure.  At a 56% tax rate, that would mean that gamblers have lost around $16 billion in Pennsylvania.  We always read figures like that concerning projections or actual revenue; mentions of billions of dollars casually tossed around. What we never hear about is where that money comes from.  One might think that the money is simply generated out of thin air.  In fact, that $16 billion came out of peoples' pockets.

Now I'm no economist, but it seems to me that there just has to be a downside here that we never hear about in Executive Summaries of casino proposals.  Assuming that most of the money is disposable income on the part of the gamblers, wouldn't they be disposing of it somewhere else if not in a casino?  (Hopefully, not money intended for the supermarket, but we know that's not always the case.)  Doesn't there have to be some kind of downside in other areas of the economy?  Maybe politicians in Pennsylvania don't really care, if the gamblers are coming from New York or New Jersey.  But very soon, it's going to be one big regional casino community in the Northeast, and any cannibalization effect is going to even out.

This is, I suppose, what New York Comptroller Tom DiNapoli was talking about when he noted that:  "Such activity primarily represents substitution of spending on casino gambling for other consumer purchases or spending at other existing gaming venues."  Don't know what percentage is being substituted for which; but when you're talking about this much money, the "other consumer purchases" part has to be significant.  Yet DiNapoli's report was brushed aside; "for its utter lack of facts," by the Gaming Commission spokesperson.  But the "facts" of casinos in New York State remain to be seen.  And, given the current trends and the coming competition, I can't imagine that the picture will remain rosy for very long (if at all).


jk said...

DRF is reporting NYRA plans to add NYRA Rewards betting terminals in Manhattan bars/restaurants. Casinos in Manhattan are inevitable as well as everyone defends their turf. The "destination" resorts planned for upstate will suffer imo.

Dan said...

JK- smart move about getting betting machines in bars- low overhead (rent ect).

I really don't see in the next 10 years that Manhattan will get any type of casino.

I can see AQU closing (about 4-5 years) & Genting will expand & make the track a full casino with hotels.

El Angelo said...

I agree with Dan on all counts. Simply the real estate costs of a Manhattan casino make it pretty tough to contemplate. Expanding Aqueduct into a full-scale casino makes much more sense.