Hold that bet on gambling in the Catskills
Not that long ago Sullivan County worried about the spillover effects of prosperity. Casinos and their associated development would turn Route 17 into a parking lot every Friday and Sunday evening. Oil wells would desecrate a landscape scarred by the ruts of heavy equipment rolled in to tap the wealth in the Marcellus Shale.
With oil trading more than $100-per-barrel below its record high and credit markets a dry hole, the economics of exploration have turned around, halting the rush to the Catskills. That should give the state and local governments the time they feared they might not have to absorb lessons from other areas where drilling has had time to mature and to firm up regulations to make sure that any damage from the work would be minimized, repaired and paid for.
On the gambling front, the news is equally bad and more discouraging. Aside from geologists, most people in the area had never heard of the Marcellus Shale before the rapid rise of energy prices made it a potential profit center. Gambling has long been the presumed savior of the Catskills, the industry that would revive the economy and recreate the glory of the grand resorts.
Based on the news of the past week, there’s only one response — don’t bet on it.
Gambling revenue is down in Atlantic City, Las Vegas and both Uncasville and Mashantucket, Conn. Donald Trump has quit the board of Trump Entertainment Resorts, and the company, the owner of three casinos in Atlantic City that have been through bankruptcy twice, has filed for a third round after missing a $53 million interest payment at the start of December.
If you feel bad about your 401(k), consider how Donald feels when he thinks about his company plunging from a net worth of $842 million in 2005 to $7.3 million today.
Indian gaming operations are doing no better. Winnings at Mohegan Sun were down almost 8 percent in January from the year before, and winnings at Foxwoods were down more than 7 percent, better than the 19-percent drop in December.
Gamblers aren’t the only ones holding back. Moody’s and Standard & Poor’s downgraded the credit ratings of the two Connecticut operations based on the decline already on the books and expectations of more bad news for a while.
Where does that leave the plans for reinventing the Concord with hotels, restaurants, a relocated Monticello raceway complete with racino but without the gaming operations that seemed to be an inevitable evolution in the near future? Stalled would be the most accurate answer for now, with the developer working to find funding and plans being scaled back and delayed.
Nobody can blame Louis Cappelli for this. He had big dreams and made big promises. Once the economy turns around, gamblers will find their way to the tables once again, and the ancient promise of prosperity for the Catskills will return.
For now, it might be more prudent for those local officials who have been so supportive and cooperative to start thinking about alternative ways to attract jobs and development. The odds have changed and not in their favor.