Cuomo Under Pressure to Pick Winners in Saturated Casino Market

ALBANY (Bloomberg) -

Gov. Andrew Cuomo is playing a game of chance with his plan to buoy the upstate economy with four casinos.

If a board named by a Cuomo-controlled gaming commission picks the right bids from a pool of 16, jobs and tax money that he promised may come through. Choose wrong, and the casinos could crash in a market that was fatal to four gambling halls in the resort of Atlantic City, N.J.

The siting panel, which the state’s gambling chief said could award no licenses, heard final pitches on Monday and Tuesday. It will then weigh Cuomo’s stated hope that casinos can add $430 million to state and local coffers against the reality that there’s little room for growth. Operators say they can overcome that as they try to set themselves apart.

Each bidder claims to tap into a niche market of gamblers. If those arguments don’t sway the panel, there may be no new casinos in the third-most-populous state, said Rob Williams, acting director of the New York State Gaming Commission.

Recent events don’t bode well. A third of the gambling halls in Atlantic City are closing, putting more than 7,300 out of work and adding pressure on homeowners to make up the difference in taxes. Garden State officials are considering expanding gambling in northern New Jersey, the closest option for New York City’s 8.4 million residents. And New York’s own video slot parlors outside the metro area are off to their worst start since 2011.

In June, Moody’s Investors Service changed to negative from stable its outlook on the U.S. gambling industry. A month later, Fitch Ratings said revenue for casinos “will remain challenging.”

The casino cash haul in Atlantic City has fallen about 44 percent since 2006 as options expanded in Maryland and Pennsylvania. The $2.5 billion Revel Casino Hotel closed this week, the third Atlantic City gambling destination to shut this year. And Trump Plaza is set to close Sept. 16.