The state Legislature approved Gov. Andrew Cuomo’s controversial gambit to place nontribal gambling casinos in select upstate regions last month—but it remains an open question whether an expansion would live up to the governor’s vision of “destination resorts” that will dramatically boost the upstate economy.
And while Cuomo has tirelessly promoted the plan as a way to create jobs and boost tourism upstate, the final say lies with the voters, who will decide whether to allow the proposal in a November referendum.
So far the voters remain divided: A June Quinnipiac poll shows 48 percent of New Yorkers support amending the state constitution—the final legal hurdle blocking the proposal—and 45 percent opposed.
Cuomo’s plan calls for the immediate construction of four upstate casinos: two in the Catskills, one in the Capital Region and one in the Southern Tier along the Pennsylvania border. After seven years three more would be built, with New York City on the table as a possible locale. But despite the governor’s enthusiasm, some experts aren’t so optimistic.
“The days of ‘build it and they will come’ are over,” said Alan Woinski, who blogs about the gambling industry for Gaming USA Corp. “With how many casinos there are around the United States now … look at Ohio—they have four casinos and seven racetracks, and they’re all underperforming because they’re surrounded by states with other casinos.”
Woinski said that the competition from casinos in Pennsylvania, New Jersey and Connecticut could mean that only local gamblers would be interested in a casino in the Catskills. The success of the Resorts World Casino in Queens, which opened in 2011 with slot machines and electronic table games, has occurred simultaneously with plummeting revenues in Atlantic City. And New York is already home to five full-scale tribal casinos upstate.
“This is why I call it a zero-sum game overall,” Woinski said. “We’ve reached a point where you can’t open another casino and expect to grow the entire market, so you’re basically stealing from others. And if you destroy another casino, how successful are you, really?”
Chad Cotti, a professor of economics at the University of Wisconsin’s Oshkosh College of Business who has studied the effects of gambling on local economies around the country, said that his research shows casinos providing an immediate increase in jobs, but minimal spillover into other industries
“The casinos themselves are largely self-contained, so there tends not to be a meaningful effect that propels other industries or other jobs outside of the casino,” Cotti said. “In an urban area, the effect that a casino has on overall employment is negligible. But [where] you do see a boost is in rural counties.”
Cotti, whose research also links rural casinos with an increase in drunk driving, says he hasn’t analyzed the effects of gambling on traditional vacation destinations specifically. But he doesn’t think it’s a stretch to imagine casinos boosting a region with a history of tourism.
“Anecdotally, if you have areas that are predisposed to tourism,” he said, “the casinos could help bring people back.”