“As with other consumer expenditures, there is a limited market for casinos and other legal gambling”

The report from Comptroller Thomas DiNapoli’s office comes as the state accepts applications from developers for a total of four casinos in three upstate regions, including the Hudson Valley-Catskills.

Your report says that new casinos in upstate New York will face challenges in drawing customers, and the state should be cautious in making revenue projections. What has been the experience in other states? Can you expand on this issue?
Seventeen states now allow Las Vegas-style commercial casinos, and Native American-owned casinos operate in 28 states, so the level of experience varies. As casinos become more widespread, they draw some new customers who have not previously gambled at casinos as well as some customers who transfer their activity from existing facilities. It is expected that this will be true in New York as well.  So the state’s overall revenue from legalized gaming will increase, but some of the revenue from casinos will be offset by losses from existing activities such as racinos or off-track betting. 
 
How can competition from other states affect winnings in New York?
As with other consumer expenditures, there is a limited market for casinos and other legal gambling.  The rising level of competition among states, particularly in the Northeast, means that New Yorkers who choose to visit casinos will have a variety of options. Casinos currently operate on certain Native American lands in the state and in the nearby states of Connecticut, New Jersey, Pennsylvania and Rhode Island. Commercial casinos are expected to open in neighboring Massachusetts in 2015.
 
One of the arguments in favor of casinos in New York was that people should gamble in the state. Do you agree with this argument?
If New Yorkers choose to gamble, it is in the state’s economic interest that such an activity takes place within the state, as the resulting jobs and tax revenue will benefit New York.

Do you believe the overall gambling market in New York is getting close to the point of saturation? Do you also think that there is a casino saturation across the country?
Evidence suggests that the industry has room to grow in New York. Gross gambling revenue at New York racinos was US$ 1.8 billion in 2012 – substantially lower than those in New Jersey and Pennsylvania (which have smaller populations.)  But New York is also a more mature market, which indicates that the rate of growth may slow, and caution is essential in projecting such revenues.
 
Are there any downsides to the increase in legalized gaming?
New commercial casinos may increase the level of problem gambling. The state Gaming Commission has indicated it plans to place a stronger focus on problem gambling, and the state must deal aggressively with this issue.