New York sees uptick in Lottery plays despite added casino competition

in Lottery

Also hitting a new high was Lottery aid to education, finishing the fiscal year at $3.372 billion, about a third of total sales

GAMING: Scratch-off, draw ticket sales near $10B mark, while OTB revenues decline.

ALBANY — Despite new competition for gambling dollars, New York's Lottery games and video gaming parlors saw a modest increase in sales in the most recent state fiscal year.

A routine audit of Lottery operations reviewed by CNHI found that the Lottery and the computerized, slot-like machines they oversee churned out a gain of about 3 percent in the latest state fiscal year, which ended March 31.

That amounts to growth of nearly $300 million, with total sales achieving a record high of $9.97 billion.

Also hitting a new high was Lottery aid to education, finishing the fiscal year at $3.372 billion, about a third of total sales.

The growth in sales comes despite the fact that four non-tribal casinos have been added to New York's menu of gambling options over the past two years.

The del Lago Resort and Casino in Tyre, Rivers Casino & Resort in Schenectady and Tioga Downs Casino in Nichols opened in 2017. A fourth non-tribal casino, Resort World Catskills in the town of Thompson, opened in February. Those facilities were licensed after New Yorkers approved a constitutional amendment in 2013 to end the state prohibition on casino gambling.

Sales of Lottery instant tickets — known to players as scratch-off games — inched higher in both the 2017 and 2018 fiscal years, according to an independent audit by the Manhattan firm, Mitchell Titus. The firm's report accompanies the state gaming commission's annual report.

Scratch-offs are the most popular category of jackpot games in New York, generating $4.2 billion in sales in the past year.

Powerball, another popular jackpot game, ended the year with $408 million in sales, while Mega Millions racked up nearly $312 million in sales.

Lottery tickets are sold at approximately 17,500 licensed retail shops across the state. The retailers took in nearly $1.39 billion in commissions from the state-controlled games, an increase of nearly $43 million from one year earlier, the audit noted.

Retailers selling draw and instant game tickets get a 6 percent commission based on total tickets sold.

Daniel Hogan, a former state racing board commissioner and a Niagara Falls native who is now a consultant on government issues, said the recent growth in lottery sales is likely due in part to several highly-publicized jumbo jackpots in prize money.

Lottery tickets, he noted, remain much more accessible for many consumers than casinos.

"I would say an increase of 3 percent is pretty decent," said Hogan. He also noted brisker sales also reflects growth in the national economy and higher sales tax collections for many New York counties.

While lottery games got a boost, the gaming commission's annual report shows gradually declining interest in wagering on horse racing through regional off track betting parlors.

The total OTB handle in the calendar year 2017 came in at $530.2 million, a decline of $28 million from a year earlier.

One reason for the drop, suggested Donald Groth, president of Catskill OTB, is a shift in demographics, with younger adults showing less interest in horse racing than their parents had.

"Many of the people who bet with us for decades are now in their graves and young people are not replacing them," Groth said. "They like choices with fast action from the devices they can hold in their hands."

Several other states have moved quickly to generate new revenue through commercial sports betting after the U.S. Supreme Court struck down a federal law that prohibited it outside Nevada.

In New York, however, lawmakers ended their 2018 session unable to reach agreement on a sports betting measure. Their failure to do so, said state Sen. John Bonacic, R-Orange County, the chairman of the Racing and Gaming Committee, could cost the state tens of millions of dollars.

"We lost an opportunity to maximize revenues for education," Bonacic said in an interview. "These other states will be eating our lunch now. "

Legislation is needed to allow OTB corporations to offer sports betting.

Two upstate casinos, in anticipation that the gaming commission will create sports betting regulations, have already struck partnership deals with companies that have sports betting platforms. Del Lago Casino and Resort in Tyre has been working on a sports book with DraftKings, while Tioga Downs in Nichols has said it is partnering with FanDuel for wagering on sports.

The Seneca Nation, which operates casinos in Niagara Falls, Buffalo and Salamanca, has signaled that it is reviewing "potential opportunities" to jump into sports betting. The Oneida Nation, which operates Turning Stone casino in Oneida County and two smaller gambling parlors in Madison County, has said it expects to move forward with a sports book "in the near future."

While some analysts suggest New York is approaching a saturation point for gambling availability, the competition for wagering dollars is likely to get more intense, said Gary Greenberg, a minority partner in the Vernon Downs racino.

He pointed out that a sprawling new casino built by MGM Grand will open in Springfield, Mass., later this month.

"It's already advertising in upstate New York," Greenberg said. "That is going to have an impact on New York."