The New York State Gaming Facility Location Board's recommendation for three new casino sites announced on Dec. 17 is a credit positive for the host municipalities, according to Moody's Investors Service.
The Upstate locations of the planned casino projects that were selected from 16 proposals are in the Aa3-rated Town of Thompson in Aa3-rated Sullivan County; Schenectady, rated A3 with a negative outlook in Aa1-rated Schenectady County; and Tyre in Seneca County, both unrated by Moody's.
These localities will benefit from additional employment opportunities, casino host fees as well as potential for sales tax growth and property tax expansion, Moody's analysts Valentina Gomez and Robert Weber wrote in a Dec. 19 report. However, long-term, economic benefits from the casinos "could be muted" because of increased competition in the northeast region.
Host fees for the counties that will house the three casinos are estimated by the New York State Gaming Commission to be $14.7 million for Sullivan, $13.1 million for Schenectady and $6.9 million for Seneca.
The towns and school districts will also receive smaller amounts in host fees, but all the impacted municipalities will "likely" see increased property taxes from new construction along with sale tax growth, Gomez and Weber wrote. Moody's notes however that new revenues may be offset by increased expenditures needed for infrastructure improvements and public safety to accommodate increased traffic.
The Upstate casinos will be built at a time when Moody's has a negative outlook for the U.S. gambling industry due to weak revenues, waning demand and high fixed costs. Four casinos have been shuttered this year in Atlantic City in what Moody's largely attributes to a "weakened brand" and increased regional competition.
