Nassau County, N.Y., officials are betting that a famed horse track will be a winning location for a new video lottery terminal casino that they believe will deliver much-needed revenue to a local government strapped for cash.
Nassau Regional Off-Track Betting announced on Dec. 29 plans to build the 100,000 square-foot video lottery terminal facility with 1,000 electronic slot machines at Belmont Park in Elmont, N.Y.
The property, on the Nassau County-New York City border, is home to Belmont Racetrack, which each June hosts the historic Belmont Stakes, the final leg of thoroughbred horse racing's annual Triple Crown.
Efforts by Nassau OTB to place a video gambling parlor at Belmont come nearly a year after the agency abandoned plans to open a location at a vacant commercial building at the Source Mall in Westbury, following community opposition.
New York Gov. Andrew Cuomo signed a 2013 bill that allowed Nassau and neighboring Suffolk County to build one VLT facility each with a maximum of 1,000 machines. County officials estimate that the mini casino would generate up to $20 million in annual revenue.
The Nassau Interim Finance Authority, which took control of the county's finances in 2011, approved a $2.95 billion 2016 budget, but has also mandated quarterly reviews tracking revenue and spending levels. County Executive Mangano included $20 million in anticipated revenue from the planned OTB facility as part of the fiscal plan.
"It's not an enormous amount, but relative to the amount of reserves they have it would be large," Moody's Investors Service analyst Cristin Jacoby said of Nassau County's $20 million annual projection for video lottery revenue. "It's not going to make or break them."
Mangano's 2016 budget allocated $4 million toward contingency reserves. The county's bonds are rated A2 by Moody's and A by Fitch Ratings.
"Belmont Park is a logical selection as the existing gaming facility is underutilized," said Mangano in a statement.
Nassau OTB wants to build a temporary VLT hall with restaurants that would cost around $10 million and could take four to six months to construct.
A permanent gambling parlor estimated to cost $75 million requires approval from the New York state legislature.
Nassau OTB announced in December 2014 it was planning $100 million in bonds for its planned mini casino site.
"After exhaustive study and review, including the input of nationally recognized consultants to the gaming industry, Nassau Regional Off-Track Betting strongly believes that Belmont Park is the best possible site for the location of a video lottery terminal facility," said the agency in a statement. "The addition of VLTs and other first class amenities to existing gaming operations will enhance the entertainment experience for visitors to Belmont Park as well as producing revenue that will support vital public services that the county provides to its neediest residents."
Mangano and Nassau OTB president Joseph Cairo met with state and local officials on Dec. 21 to try and build support for the Belmont Park VLT location. Nassau County legislators Richard Nicolello, R-New Hyde Park, and Vincent Muscarella, R-West Hempstead, both attended the meeting and have expressed support for the proposal. Nassau County Legislative Presiding Officer Norma Gonsalves, R-East Meadow has also announced backing for the Belmont plan.
"Belmont Park will provide an exciting entertainment destination for Nassau County's residents and yield a significant economic benefit to our communities, taxpayers and small businesses," said Gonsalves in a statement.
Anthony Figliola, vice president of Uniondale, N.Y.-based consulting firm Empire Government Strategies, said it makes sense to have Nassau County's OTB location at a venue like Belmont where there is already a form of gambling. He said having VLTs available on site could also help boost horse racing attendance at Belmont Park's two sessions, which run from May to late July and early September through late October.
"If you have horseracing there it makes sense to have everything under one roof," said Figliola, a former deputy supervisor for the Town of Brookhaven in Suffolk County.
Figliola said a new gambling facility will not likely address the county's financial challenges due to a saturation of casino options.
Just 10 miles from Belmont is the Resorts World Casino at Aqueduct Racetrack in Queens and 20 miles away is Empire City Casino at Yonkers Raceway in Westchester County.
He also points to struggles of Atlantic City, which suffered four casino closures in 2014, and the Foxwoods tribal casino in Connecticut as being further signs that gambling may not generate as much revenue as projected in Nassau County.
"I don't believe at the end of the day that this going to help the county in terms of revenue long-term," said Figliola. "I'm highly skeptical that this is going to fill in the budget gaps on a long-term basis."
Fitch Ratings has a stable outlook on U.S. gambling in 2016, but emphasized in a Dec. 7 report that the younger population is less interested in casinos than baby boomers and are more drawn to "convenience" alternatives like lottery tickets and online gambling. Fitch is forecasting this trend will most negatively impact slots-oriented regional operators, with resort-style casinos less affected.
Moody's revised its outlook for the U.S. gambling market to stable from negative in July due to expected revenue growth in the next year. Moody's also cautioned in a Nov. 30 report that the northeast may become saturated with gambling options because the region is expected to see a 30% growth in casinos over the next three years.
"There is a chance that if you continue to open new casinos you are going to see them not grow the market," said Moody's analyst Pete Trombetta. "There is a chance there will not be enough incremental revenue coming in."
