The Great Yonkers Casino Gamble
Has betting on Empire City paid off?
Photo courtesy of Empire City
After every pull of the lever at a one-armed bandit, the wheels eventually stop spinning so you can see if you got a winning three cherries or a losing mixed fruit salad. It’s that time at Empire City, the casino that promised an economic bonanza for the city of Yonkers. Did the bet made nearly four years ago pay off?
It would seem so, especially if you look at the big, big numbers the casino has racked up since going live in October 2006. It’s been an exceptionally good payout for the Rooney family, owners not only of the Yonkers Raceway and Empire City Casino but also of the six-time Super Bowl Champion Pittsburgh Steelers. Some of the other players in the game have done okay, too, but perhaps not as well as expected when they plunked their quarter in the slot.
Before we get into some mind-boggling numbers, a little background might be helpful. Empire City, the home of what must be one of the world’s largest collection of 25-cent slot machines (more than 5,000 coin guzzlers of all denominations) opened in October 2006, five years and many lawsuits after the New York legislature authorized it. Advocates of video gaming pointed to the economic boon it would bring to the city, and their arguments eventually won the day.
Today, thousands of gamblers flock to Empire City from Westchester, the Bronx, and beyond, filling the 5,000-car parking lot and streaming off buses from Long Island, Queens, and Northern New Jersey. There seems to be a crowd at any time of the day or night, a mix of the underemployed, the overworked, retirees, guys with dates, gals in groups, butchers, bakers, and candlestick makers, all looking for a little escape and a chance to stick their hand in the pot of gold at the end of the rainbow. According to Empire City General Manager Robert Galterio, the average visitor spends $75 in the casino, less than the cost of a ticket to a Broadway play or two tickets in the cheap seats at the new Yankee Stadium.
Here’s the mind-boggling part: in the fiscal year ending in March 2009, Empire City generated nearly $500 million after paying off the winners. Of that, the Rooney family kept about $212 million, which they used to cover their expenses and debt service on the $285 million construction cost of the facility. While the family doesn’t reveal net profits, Galterio doesn’t deny that there’s plenty left over.
The state education fund comes out a winner, too, since it receives a big chunk of all gaming in New York as part of the incentive for communities to allow the casinos and lottery to operate. This last fiscal year (ended in April 2009), though, the state’s school children are doing with a cool $56 million less than they could have received ($293 million) because the share of casino profits allocated to the education fund was cut to help Empire City meet its mortgage payments and increase the amount spent on marketing the casino.
Empire City contributed nearly $237 million to the fund for direct school aid throughout New York State. That, supporters note, wouldn’t exist without the casino.
In other words, the casino supporters—the business community and government officials who wanted to see it happen—were right. It not only saved Yonkers Raceway, but it is now a major contributor to the local economy. The casino and track is the city’s largest single taxpayer and largest private employer with 950 on staff. In 2005, before the casino opened, the track had about 300 employees. The annual payroll is now about $30 million and the majority of the employees are from lower Westchester and the Bronx.
The city of Yonkers came out well, too. The Yonkers Board of Education gets $19.6 million annually from the casino. The city also gets up to $4 million to cover additional expenses such as fire and police protection, according to Yonkers City Council President Chuck Lesnick, who says it’s a bargain since the city’s expenses are much less than initially expected.
“When the facility first opened, there was a lot of fear that traffic would be backed up all throughout the area,” Lesnick says. “But, unlike a baseball or football game that starts and ends at a given time, the gaming is spread out over periods of hours, so there are no bottlenecks.” Aside from a few extra police patrols, the city has no additional expenses related to the casino.
“There is sales tax on refreshments and food,” Lesnick adds. “There is also city income tax on all the people who work there, from the security guards to the jockeys.” Add in property taxes, and Empire City is easily the largest taxpayer in Yonkers.
Yonkers Mayor Phil Amicone sums up the situation by saying, “The cost to the city is less than what we get out of it, which is good. I hate seeing an economy based on gambling, but if we’re going to have the casino here, I’d like to see the money staying in the city.”
In all the excitement over the success of Empire City, its effect on Yonkers Raceway is often overlooked. According to Galterio, a portion of the casino’s share of the take goes to purses for the racetrack. “Our purses went from fifteen-million to about forty-million dollars. That allows owners to go out and buy better horses. It allows more trainers to be hired. We get better drivers than we had before. It makes for more exciting racing.” While this hasn’t brought much more to the betting window in Yonkers, it’s made events more appealing to bettors elsewhere. “We now simulcast our races to three-hundred-fifty different outlets between OTBs in New York State, casinos in Atlantic City and Vegas, and other race tracks around the country and Canada,” Galterio says. That brings even more revenue to the track owners.
The true economic impact of any gambling facility ultimately depends on the wagering itself, of course. While we tend to see Empire City’s winnings as revenue for the establishment and the state, it really represents the amount lost by thousands of individuals who spend hours mesmerized by the magical possibility that somehow they will beat the odds and walk away a winner. As an occasional player at Empire City, Harvey Karp of the Bronx pointed out, “Playing these machines is basically a tax on the stupid.”
“In many cases,” Amicone says, “people who are putting their money into the machines can’t afford it. Having said that, people are responsible for themselves and I’m not saying we shouldn’t have gambling.”
Galterio says playing video gaming machines is just another form of entertainment. “Here, you can have fun with your friends. We’ve got live entertainment, we’ve got horseracing, we’ve got restaurants. Our trackside dining room, which holds six-hundred people, will be three-quarters filled on Friday and packed on Saturday. You can bet and watch the races while you dine.” Afterward, you can step into the casino and feed a few quarters into the voracious maw of 5,300 gaming terminals, knowing that at least part of your wager will eventually find its way to Westchester’s economy.
Dave Donelson was quite happy to lose not a single quarter while researching this story.