Eastern States Gambling on Casinos to Bring in Revenue

In what is part of a trend that is growing in size and respectability throughout the eastern seaboard, New York Governor Andrew Cuomo announced last week that he has plans to transform Aqueduct Racetrack into a mega tourism/gambling/casino complex.

Baby Steps

Aqueduct Racino

Last October New York took its first baby steps into the world of casino gambling when a “racino” with limited facilities opened at Aqueduct. Even with just 4,500 video slot machines and only 500 electronic table games, the racino was able to earn $13 million just last week, which translates into $676 million a year. New York State’s cut is 44%, going straight to a fund for education.

Cuomo’s new proposal, however, dwarfs what Aqueduct offers gamblers now. Working together with the Genting Group, one of the world’s largest and most profitable gambling companies and the company which built and operates Aqueduct’s racino, Cuomo plans on creating the nation’s largest convention center, hotels with 3,000 rooms, and a major expansion of the casino.

Eastern States Getting in on the Action

The plan comes fast on the heels of a law passed two months ago in Massachusetts, once known for its puritanical, anti-gambling values, which will permit the establishment of three resort casino and a slot machine parlor, at several locations around the state.

Ohio also has plans to open its first ever commercial casinos this year after voters in 2009 approved a plan to build up to four such complexes. Maryland’s first of several casinos opened this year, while Pennsylvania has been operating its own casinos since 2006, which are threatening to overtake Atlantic City’s casinos as the country’s second most popular venue for gambling.

Florida is now in the midst of a legislative debate on whether to allow up to three multi-billion dollar casinos, and whether to permit more slot machines at Florida’s dog tracks. Genting believes the Florida law will pass, spending about $450 million on waterfront property purchases in Miami, where it hopes to build a $3.8 billion complex.  The facility would include a casino, restaurants and a shopping mall.

Its All About the Money

After years of rejecting gambling due to the fears of the danger to society, states have begun to accept gambling for two main reasons: gambling is a seemingly abundant source of revenue; plus casinos have the potential of stimulating tourism.

“They are faced with tough decisions. They are in recession … And we pay taxes far over and above normal taxes,” said Frank Fahrenkopf, president of the American Gaming Association.

Compared to what Genting estimates they can make if the Miami complex comes to fruition, the total that the Aqueduct racino brings in is miniscule. Genting is guessing that they can bring in $1.4 to $2 billion each year in Miami, if they get their way.

About Alison Meadows

Alison Meadows has a PHD in Economic Trends in Modern Times and is a known writer who focuses on hedge fund investments. Meadows, her husband, and three kids live in Boston, where she grew up and attended college. Contact Alison at alison[at]businessdistrict.com