NEW YORK GAMING ASSOCIATION 2012 Annual Report
Table of Contents Board of Directors Michael Speller Timothy Rooney, Jr. Daniel Gerrity William Bissett Charles Degliomini Jeff Gural Thomas Osiecki Michael Kane Officers James Featherstonhaugh, President Timothy Rooney, Jr., Vice President William Bissett, Secretary Christian Goode, Treasurer Michael Wilton, Executive Director Board of Directors and Officers...2 Message from the President...4 Record of Results...5 Who We Are...6 Our Members...8 Distribution of Gross Gaming Revenue Financials...10 Education Funding...12 Job Creation...14 Racing and Breeding...16 Capital Investment...18 Support for State and Local Government...19 Charitable Giving...20 Promoting Responsible Gaming...21 New York Gaming Market...22 Citations...23 2 3
Message from the President The New York Gaming Association (NYGA) is pleased to present this 2012 Annual Report. The information contained in this report can be summarized simply: Racetrack casinos are good for jobs, good for generating revenue toward education and good for our agricultural economy. In fact, the gaming industry in this state which follows a unique public/private partnership business model is among the most successful anywhere in America. Whether you are talking about funding for education, jobs, paying good wages and benefits, generating revenues for the state, or support for agribusiness racing, breeding and family farms the raw data is impressive. You will read about this in the pages that follow. You will read how New York s model is flourishing. It goes beyond the numbers. The most important facet of the New York gaming model is that it is by, for and about New Yorkers. Our members have a special commitment to the communities in which they operate. Our facilities are leading regional economic catalysts. Our facilities are stable business partners. Our facilities are good corporate citizens. Further, our facilities are the most transparent, regulated and monitored business enterprises in New York. As this report shows, our nine existing facilities are tremendous economic assets that should be nurtured and developed. Despite paying one of the highest taxes in the nation, with sound policy choices, we can increase revenues, create more jobs, support our regional economies and increase local and state tax revenues. NYGA s goal for 2013 is to continue to grow and do more for New York, and with the help of our partners in state government, we will do just that. James Featherstonhaugh President New York Gaming Association Record of Results From the first facility opening in 2004 to the end of 2012, New York Gaming Association members $3.8 Billion for Education have had a significant economic impact that includes: $170 Million to Local Governments $839 Million for Racing and Breeding Support 4 5
Who We Are Formed in 2011, the New York Gaming Association is comprised of the state s nine racetrack casinos. Our members facilities are located at thoroughbred and harness racing venues in communities across the state. Our members are the heirs to New York state s storied legacy of horse racing, representing an aggregate of more than 617 years in operation. In 2001 New York state authorized Video Lottery Terminals (VLTs), leading to the opening of the first racetrack casino in 2004. Since then, our members have become significant employers and growing contributors to state and local government revenues. Our members are committed to being conscientious corporate citizens and proud supporters of organized labor, and are a national model for effective gaming operations. Members Batavia Downs Casino Hamburg Casino at Buffalo Raceway Saratoga Casino & Raceway Vernon Downs Casino & Hotel Finger Lakes Casino & Racetrack Tioga Downs Casino Monticello Casino & Raceway Empire City Casino at Yonkers Raceway 6 Resorts World Casino New York City at Aqueduct Racetrack 7
Our Members Tioga Downs Casino Hamburg Casino at Buffalo Raceway Resorts World Casino New York City Resorts World Casino New York City is owned by the Genting Group, the world s largest destination casino resort operator. The Genting Group has a combined market capitalization of $45 billion and employs more than 50,000 people worldwide at locations including Singapore, London and soon Las Vegas. Located at the historic Aqueduct racetrack, Resorts World Casino New York City opened in October 2011 and now boasts more than 5,000 slot and table game machines. Empire City Casino at Yonkers Raceway Yonkers Raceway was founded in 1899, with famous thoroughbreds including Seabiscuit gracing the track over the years. The fabled Rooney family acquired Yonkers Raceway in 1972, and in October 2006, they opened Empire City Casino, adding to their East Coast gaming operations. The facility now offers 5,300 slot and table game machines, live entertainment and trackside dining. Owned by Nichols, NY-based American Racing and Entertainment, LLC and located in the heart of the Southern Tier, Tioga Downs Casino offers live entertainment and dining in addition to gaming. The track has been in operation since the 1970s, and, since Tioga Downs Casino opened its doors in July 2006, it has grown to include more than 800 slot and table game machines. Vernon Downs Casino & Hotel Also owned by American Racing and Entertainment, LLC, Vernon Downs Casino & Hotel opened in October 2006 and now has more than 750 slot and table game machines. Set in idyllic farm country, the hotel s 150 suites feature trackside rooms with stunning views. Batavia Downs Casino Batavia Downs is the oldest lighted harness track in North America, opening in 1940. Operated by Western Regional Off Track Betting Corporation, Batavia Downs opened its casino doors in May 2005 and offers patrons more than 640 slot machines to choose from. Also managed by Delaware North Companies, Hamburg Casino at Buffalo Raceway traces its origins as a harness racing track to 1942. Located on the Erie County Fairgrounds, it opened in March 2004 and has more than 900 video gaming machines. Buffalo Raceway became a harness racing fixture with the start of the 1960s and was considered one of the top 10 tracks in America. The New York Sires Stakes, a series of statewide 2 and 3 year races for New York-bred horses, made their debut at the raceway in 1961. This stake series remains a part of the current raceway program. Monticello Casino & Raceway Monticello Casino & Raceway is owned by Empire Resorts, a publicly traded gaming and entertainment company. The track has been harness racing since 1958 and the casino opened its doors in June 2004. The facility boasts more than 1,100 slots and has already hosted over 5.5 million visitors. In January 2013, the Town of Thompson approved a multi-phased development plan that would see Monticello Casino & Raceway move to the famed Concord Resort site in the Catskills. Saratoga Casino & Raceway Saratoga Casino & Raceway traces its history back to 1941, when the first harness racing program was run. In January 2004, Saratoga Casino & Raceway became the first of NYGA s members to open its doors and now boasts more than 1,750 slot and table game machines. Recently the company purchased a casino in Colorado, and operates a thoroughbred track in Kentucky. Finger Lakes Casino & Racetrack Finger Lakes Casino & Racetrack is owned by Delaware North Companies, a Buffalo, NY-based global leader in hospitality and food service. With more than $2 billion in annual revenue and 55,000 employees, Delaware North is owned by the Jacobs family, making it one of the largest privately owned corporations in America, operating gaming and racing facilities in six other states across the country. Opened in February 2004, the facility has nearly 1,200 slot machines. 8 9
2012 Distribution of Gross Gaming Revenue Gross Gaming Revenue (GGR)/Net Win: Sometimes referred to as the hold, GGR is the remaining net revenues after payout of winnings is returned to players, which is a true measurement of the economic value of gaming. Racing & Breeding 11.7% $211,325,779 Operations 23.2% $417,579,872 Lottery Admin & Gaming 10.0% $180,221,155 23.2 11.7 10.0 9.5 Capital Investment 9.5% $170,409,813 45.6 Net Win 7% *NYGA members pay one of the nation s highest effective tax rates 67% of GGR. $1.21 billion Education Contribution 45.6% $822,674,915 45.6% 11.7% 10.0% 23.2% 9.5% 2012 Financials $1.8 billion in gross gaming revenue resulted in the following: 45.6% Education Revenue $822,674,915 Racetrack casinos generate more revenue for education than any other state. This aid represents the largest share of revenue transferred to the Division of the Lottery, whose sole purpose is to further fund education. The annual support for education is equivalent to funding the salaries of 12,100 teachers and helps hold the line on property taxes. 11.7% Racing and Breeding $211,325,779 New York s racing industry is vast. The money generated for racing is distributed to support both thoroughbred and standardbred breeding and racing purses, and agribusiness like family farms, feed suppliers, veterinarians, blacksmiths and a host of other agrarian jobs. It also supports the New York Racing Association with revenue for capital expenditures and operations. 10.0% Lottery Administration & Gaming Operations $180,221,155 Supports video lottery gaming administration, including gaming floor operations and support of payment systems. Division of Budget may authorize the transfer of remaining revenue to the support of education. 23.2% Operations $417,579,872 Racetrack casinos are private sector companies, generating revenue to cover the costs associated with daily operations of the facilities and the almost 6,000 jobs they support. Those costs include wages and salaries, employee healthcare and benefits, utilities payments, facility maintenance and debt service, among other operational expenses. 9.5% Capital Investment $170,409,813 Capital Investment is a combination of both the marketing allowance (8.6%) and capital fund (0.9%). Racetrack casinos are statutorily obligated to designate portions of revenues to market their facilities and set aside capital funds used for construction/expansion projects. 10 11
Education Funding $823 million / $67,991 = 12,100 teachers Revenue for Education Average NYS teacher salary $67,991 $900 Revenue in millions $822.8 $800 VLT Statute In 2001, when Video Lottery Terminals (VLT) were authorized by the New York State legislature, the law required the lottery to dedicate its revenues to education spending. This still holds true today. 2004 2012 1,727 Jobs $117 million 12,100 Jobs $823 million Our members have generated $3.8 billion for education since 2004. In 2012 alone, NYGA members generated nearly $823 million for education. At an average salary of $67,991,this would fund the equivalent of 12,100 teachers. The indirect economic impact of funding these teaching positions is in excess of $629 million. That brings the total economic impact to more than $1.4 billion. $700 $600 $500 $400 $300 $200 $100 $117.3 $156.2 $219.2 $449.8 $446.2 $455.4 $503.3 $593.6 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 12 13
Job Creation As of the end of 2012, our members directly employ nearly 6,000 people with compensation exceeding $160 million. Our predominantly union workforce earn on average more than $34,000 annually. Taking into account the impact of purchasing, construction, support for the racing industry, out-of-state visitor spending and other factors, we are responsible for more than 17,000 jobs and nearly $1.7 billion in economic output. NYGA members economic impact in New York State in 2012 Jobs Wages Output ($000 s) NYGA Member Operations Direct employment 5,785 $160,619 $160,619 Purchasing and construction 1,704 $129,160 $443,991 Indirect and induced effects 2,526 $155,187 $402,659 Subtotal 10,015 $444,966 $1,007,269 State Lottery Division Contracts Direct impact 161 $15,333 $39,998 Indirect and induced effects 159 $9,588 $25,483 Subtotal 320 $24,921 $65,481 Support for Racing and Breeding Direct impact 3,707 $114,764 $211,326 Indirect and induced effects 1,609 $89,739 $225,393 Subtotal 5,316 $204,503 $436,719 Out-of-State Visitor Spending Direct impact 1,059 $32,407 $109,324 Indirect and induced effects 418 $26,151 $69,654 Subtotal 1,477 $58,558 $178,978 Total 17,130 $732,948 $1,688,447 * Output includes wages, salaries and benefits, and the purchases of goods and services 6,000 direct jobs 17,000 total jobs $1.7 billion impact Our employees include a mix of management and union professionals, administrative and clerical staff, customer service personnel, restaurant and other food and beverage workers, facility operations and maintenance workers, and security personnel, all earning good wages and benefits. Shift Supervisor Accounts Payable Clerk Casino Cage Manager Window Bank Cashier Food & Beverage Concierge Banquet Servers Administration Sales & Marketing Security Barn Manager Groom Horse Trainer Stable/Barn Hand Veterinarian Casino Cage Manager Breeding Manager Foaling Manager Foaling Attendant Administrative Staff Veterinarian Security Personnel Jockey Racing Driver Track Blacksmith Security Personnel Carpenter Electrician Equipment Operators Security Personnel Our Workforce Horse Trainer Mechanic Storeroom Clerk Buffet Attendant Cook Painter Banquet Servers Bartenders Cocktail Servers Dishwashers Hostesses Night Auditor 14 15
Racing and Breeding A wide array of agriculture-related businesses benefit from the revenues NYGA members generate. These include trainers, family farmers, grain and feed producers, breeders, veterinarians, blacksmiths, grooms, owners, equipment suppliers and many others. Our members contributions to horse racing and breeding in 2012 totaled more than $211 million, 12 percent of gross gaming revenues. These funds supported 3,700 full-time-equivalent jobs and another 1,600 indirect jobs. These 5,300 jobs have a total economic output, which includes wages, salaries and the purchases of goods and services, of nearly $437 million. This substantial economic engine helps sustain New York s 2,300 breeding, training and racing facilities, and 23,000 family-owned farms and stables. Percent Distribution to Racing/Breeding/NYRA 2012 Aid % Distribution ($000 s millions) Standardbred Purses 8.75% $87,502 Standardbred Breeding Fund 1.25% $12,500 Finger Lakes Thoroughbred Purses 8.75% $11,341 Thoroughbred Breeding Fund 1.25% $1,620 NYRA Thoroughbred Purses 6.5% & 7% $44,276 Thoroughbred Breeding Fund 1% & 1.25% $7,005 NYRA Operations Fund 3% $20,177 NYRA Capital Expenditure Fund 4% $26,901 Subtotal Purses $143,119 Subtotal Breeding $21,125 2012 Total Racing and Breeding Support $211,322 * Output includes wages, salaries and benefits, and the purchases of goods and services The year 2012 was a turning point. For the first time, purses at New York s three NYRA thoroughbred tracks were funded by revenue from Resorts World Casino New York City, located at Aqueduct Racetrack. Signs that the industry is rebounding are clear: 500 new broodmares were relocated to the state and foals increased by nearly 40 percent. NYGA funding for breeders is directed through the New York State Thoroughbred Development and Breeding Fund and, for Standardbreds, the New York State Horse Breeding Development Fund. Also in 2012, the New York Racing Association started receiving funds from Resorts World Casino New York City to support both operations and capital improvements. Racing and Breeding Economic Impact Jobs Wages Output ($000 s) Support for Racing and Breeding Direct impact 3,707 $114,764 $211,326 Indirect and induced effects 1,609 $89,739 $225,393 $250 $200 $150 $100 Subtotal 5,316 $204,503 $436,719 History of Racing and Breeding Support Revenue in millions $82.8 $94.7 $101.9 $108.7 $130.0 $211.3 $50 $19.2 $29.4 $42.6 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 16 17
Capital Investment Since 2004, NYGA members have invested in New York State, totaling $1.3 billion in private sector capital. This significant investment over the years has resulted in the creation of 7,800 construction jobs. Working with the NYS Building Trades, our members continue to invest and create jobs in their communities. These investments cover a wide variety of projects, such Construction at racetrack casinos employment # s in persons cumulative 2004-2012 wages, output and taxes in $000 s Employment Employment Wages Output Direct 7,800 $469,856 $1,267,626 Indirect 5,600 $424,317 $1,074,938 Total 13,400 $894,182 $2,342,564 State and Local Tax Direct Indirect Total Income Tax $23,674 $21,379 $45,053 Sales Tax $31,654 $9,282 $40,936 Total $55,328 $30,661 $85,989 * Output includes wages, salaries and benefits, and the purchases of goods and services as new facility construction, upgrades to existing buildings, improvements in racing facilities, gaming operations, restaurants, hotels and various other amenities. The projects have generated over $86 million in state and local government income and sales tax revenue. The total impact, including wages, salaries, purchases of goods, services and supplies, comes out to $2.34 billion. Our members are an important source of income for state and local governments. In 2012, above the $823 million generated in aid for education, NYGA member operations generated tax revenues from income, sales, property and other sources totaling nearly $106 million. These revenues supported general funds, local city school districts, stabilized or reduced property taxes, and defrayed costs associated with our facilities. These revenues are provided primarily through three different sources: aid to municipalities, taxes paid directly to the state and local governments, and revenues generated indirectly through the economic activity of our employees and our facilities spending on payroll, purchasing and construction. In 2012, our members: Financed nearly $26 million in direct aid to municipalities Directly paid more than $33 million in state and local taxes Indirectly generated more than $47 million in taxes Impact of Racetrack Casinos on State and Local Revenues ($000 s) Direct Indirect Total State Contribution to education $822,674.9 $822,674.9 Contribution to Lottery Admin & gaming $180,221.2 $180,221.2 State income tax $6,107.3 $21,755.5 $27,862.8 State sales tax $4,190.8 $7,446.3 $11,637.1 State corporate tax $1,888.0 $4,891.0 $6,779.0 Total $1,015,082.2 $34,091.8 $1,049,174.0 Local Aid to municipalities $25,867.0 $25,867.0 Local income tax $1,584.3 $4,936.7 $6,521.0 Local sales tax $4,040.4 $7,179.1 $11,219.5 Real property tax $13,931.6 $13,931.6 Local corporate tax, water & sewer fees $1,552.0 $1,472.1 $3024.1 Total $46,975.3 $13,587.9 $60,563.2 Support for State and Local Governments 18 19
Charitable Giving Our members have deep roots in their home communities, and giving back is an integral part of who we are. For example, in the aftermath of Hurricane Sandy, our members contributed volunteers, food and other resources to the recovery effort. These resources included more than $1 million to the Red Cross, Catholic Charities and other relief organizations. Resorts World Casino New York City even served as FEMA headquarters. In 2012, NYGA members donated more than $3.1 million to hundreds of charitable organizations Promoting Responsible Gaming New York Gaming Association members already have programs in place to address problem gambling, and provide referral information to resources in New York State for problem gamblers, including the state s 24 hour hotline. Each facility has its own voluntary self-exclusion programs that are open to anyone who feels it is necessary. Further assistance is available from the Office of Alcoholism and Substance Abuse Services, which can be reached at 1-877-8-HOPENY, or by visiting www.oasas.state.ny.us The Association and its members are active and committed to working with the state and other service providers to ensure that assistance for problem gamblers is readily available to any and all individuals who require it. If you or someone you know has a gambling problem call 1-877-8-HOPENY The New York Gaming Association is a member of the National Council on Problem Gambling 20 21
In 2012, NYGA s members: Welcomed approximately 26 million visitors Accepted nearly $28 billion in total slot wagering (aka coin-in ) Citations All statistical data was obtained from the New York Gaming Commission at www.gaming.ny.gov, and from the New York State Department of Labor at www.labor.state.ny.us. Statistics pertaining to the equine industry were obtained from the New York Horse Racing and Agriculture Industry Alliance s 2012 Equine Industry Economic Impact Study, which may be found at www.nytbreeders.org. Additionally, the New York Gaming Association has utilized the services of the following companies: NYGA members offer video slot machines that include popular titles like Sex and the City, The Hangover and American Idol, as well as electronic table game machines, including roulette, craps, baccarat and sic-bo. Combined, our facilities offer more than 17,000 machines manufactured by the following industry leaders: Bally s IGT Interblock Scientific Games Shuffle Master Spielo Appleseed based in New York City, provides economic and social research and analysis, economic development planning, strategic planning and program development services to government, non-profit and corporate clients. Spectrum Gaming Group based in Linwood, New Jersey, provides a wide range of gaming related research and professional services for public and private entities including gaming operators, developers, investors and government agencies. New York Gaming Market Union Gaming Analytics based in Las Vegas, Nevada, conducts economic impact, market feasibility and various other consulting projects for corporate, government and institutional gaming clients. 22 23
New York Gaming Association 99 Pine Street, Suite 210 Albany, New York 12207 518.436.1122 www.newyorkgaming.org