Published: January 18, 2018

New York Lottery, already nation's largest, grows again, but competition shows

ALBANY - New York's lottery reached nearly $9.9 billion in revenue last year, a slight increase from 2016, but some upstate racetracks struggled amid growing gambling competition, records showed.

New York runs the largest lottery in the nation, and total revenue grew a mere 0.3 percent between 2016 and 2017, largely because there were huge Mega Millions and Powerball jackpots in 2016 that were not replicated last year.

But New York made up the difference in its lottery revenue mainly through a surge in sales of scratch-off games, records obtained by the USA Today Network's Albany Bureau from the state Gaming Commission showed.

Sales of instant lottery games — aided by a statewide promotion program last year — grew 6 percent, up about $4.2 billion last year.

"That’s a positive outcome having it be up," commission spokesman Brad Maione said about the overall results.

"We’re looking to maximize where we can and to work our staff on the lottery side to come up with better games to maximize our return."

The profits from the lottery go to fund education in New York. About $3.3 billion each year goes to fund schools, about 14 percent of the state's total education budget.


Meanwhile, the records showed how stiff the competition for the gaming dollar has become in upstate New York after three new casinos opened about a year ago.

With the opening of Rivers Casino in Schenectady and del Lago casino in the Finger Lakes, both nearby racetracks with video-lottery terminals saw revenue fall.

Finger Lakes Racetrack in Farmington, Ontario County, had its net win — the amount of money left in the machines after payouts to winners — drop 16.5 percent. At Saratoga Racetrack, the net win dropped nearly 18 percent, the records showed.

Both tracks have received better tax rates from the state because of the new casinos, but they still struggled amid the new competition.

"The facilities at Saratoga and at Finger Lakes were dramatically affected by the commercial casinos that opened up in February adjacent to their locations," said Mike Kane, executive director of the state Gaming Association, a group that represents the state's racetracks with video-lottery terminals.

"The numbers don’t lie."

Finger Lakes spokesman Steve Martin said the revenue declines for the facility are now closer to 20 percent, and "We expect additional challenges as our newest competitors fully utilize their additional amenities, fine tune their operations and fully engage their marketing."

He added, "We are proud to continue to remain a centerpiece of jobs and economic activity in Ontario County."

In the Southern Tier, Tioga Downs converted from a racetrack with video-lottery terminals to full-scale casino in December 2016.

Owner Jeff Gural said revenues for the year were off about $20 million to $30 million compared to initial projections. He said, though, the numbers should pick up in 2018 after a new hotel there opened and other amenities are being added.

Tioga Downs, Rivers and del Lago all have failed to meet their projections in their first year.

Gural also owns Vernon Downs, a racino in central New York, and Vernon Downs' revenue fell 16 percent between 2016 and 2017, the state records showed.

Last year, Gural threatened to close Vernon Downs without a better deal from the state — which was ultimately done by the state Legislature and Gov. Andrew Cuomo.

Even with the new agreement, though, Gural said Vernon Downs is losing money because of competition from neighboring Turning Stone casino and other casinos in upstate New York.

"Vernon was a disaster. We got killed at Vernon," Gural said. But he added, "I’ve committed to keeping it open."

In western New York, Batavia Downs' revenue was up slightly to $54 million in 2017. It too is seeking a better tax rate from the state because of casino competition in the region.

Downstate, the revenue picture for the video-lottery terminals was better.

Empire City Casino at Yonkers Raceway had a net win that grew 1.6 percent year over year, while the state's total lottery revenue was aided by the addition of the machines on Long Island.

"With the sixth largest gaming floor in the country, Empire City Casino continues to focus on providing our guests with a superior entertainment and gaming experience," Empire City said in a statement.

The largest video-lottery facility is Resort World at Aqueduct Racetrack, which brought in $700 million last year. Empire City is the second largest at about $600 million last year.

The racinos are concerned about some aspects of Cuomo's budget proposal released Tuesday.

One proposal would put a revenue cap on a "hold harmless" provision that provides revenue to some racinos located in the same region as casinos.

Kane said any change would be troublesome for the tracks.

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