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N.Y. casinos don't see lottery as a threat

Jan 30, 2007, 11:15 pm

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New York LotteryNew York Lottery: N.Y. casinos don't see lottery as a threat

Since casino gambling began in New York in 1993, the increased competition for those gaming dollars hasn't seemed to hurt sales of New York Lottery tickets, which saw a record $6.8 billion in sales in the fiscal year ended March 31, 2006.

"Sales have been incredibly strong," said former Lottery Director Nancy Palumbo, who left the lottery late last year. New York's lottery, the most popular in the country, had an increase in sales of 7 percent in 2005-06.

Officials from the four largest casinos in the state - near Niagara Falls, Massena, Verona and Salamanca in the Southern Tier - don't view themselves as competition to the Lottery. They say they are destination resorts.

"They are two completely different types of entertainment," said Phil Pantano, a spokesman for two casinos operated by the Seneca Nation in Niagara and Cattaraugus counties. "We offer the full casino resort experience."

Former New York Lottery Director Margaret DeFrancisco, who now heads the Georgia Lottery, said casinos and the Lottery always had different strategies to lure players.

"They are a destination. People usually plan to go, plan a trip," she said. "The Lottery is more, 'Oh my, the jackpot's big and I'm stopping for groceries and gas, and I need to get a ticket.' It's much more of an impulse."

But in hopes of offering other gaming options - and grabbing more cash from gamblers - the Lottery began opening video gambling centers at horse tracks in 2004. There are eight "racinos" throughout the state now, making more than $6 million profit each week, including Empire City at Yonkers Raceway, which opened in November.

The Yonkers racino, with more than 5,000 machines, plans an expansion and promises to be the largest in the country.

Patricia McQueen, lottery and racing editor for International Gaming and Wagering Business magazine, said the Lottery's venture into video gaming "is almost a footnote. It has not been a big part of the Lottery, but it will be."

The Lottery hopes to offer video lottery terminals at Aqueduct Race Track as well.

Casino officials say the influx of racinos near New York City won't have much of an impact for the existing casinos upstate; they have had competition from casinos in Atlantic City, N.J., and Connecticut for decades.

McQueen said studies vary on the impact casinos have on lottery sales. "Some studies show casinos slow growth a little bit; others don't think it has an impact at all. But it sure doesn't seem to hurt the lottery. It's growing every year."

Pantano said the Seneca's casinos don't feel threatened by the debut of the lottery's video gaming racinos either.

"It's something we keep an eye on, but we offer another experience the patrons are going to enjoy when they visit the property," he said.

And he notes that much of what is spent at casinos comes from out-of-state tourists, who wouldn't be playing New York's lottery anyway. More than 6 million people visit the Seneca Niagara Casino annually; more than 30 percent of them come from outside New York, Pantano said.

The Seneca Allegany Casino opened in 2004. In 2005, it had 3.3 million visitors; more than 63 percent came from outside New York.

And the state is sharing some of the profits from those casinos. The Senecas have an agreement to pay the state 18 percent of their slot machine profits. That payment was $38 million for 2003, $57.1 million in 2004 and more than $68 million for 2005 ($45 million from Seneca Niagara; $23 million from Seneca Allegany).

That 18 percent cut will grow to 25 percent by 2010.

The Akwesasne Mohawk Casino in Franklin County, near Massena, opened in 1999. An agreement with New York in February allowed the casino to add slot machines with spinning wheels, with a percentage of those profits going to the state. The casino expected 770,000 visitors last year; 40 percent of its visitors live outside of New York.

Turning Stone officials will not say how much money that casino makes each year, but said they had 4.5 million visitors in 2005. The casino has table games and video "multigame" machines; no profits are shared with the state.

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