MONTICELLO – Last Wednesday afternoon at Monticello Casino & Raceway, there were probably 50 people inside the gambling hall that has 1,100 video-lottery machines.
The empty scene demonstrated why its owner, Empire Resorts, plans to shutter the Sullivan County facility on Tuesday after 15 years in operation, making it the first so-called racino in New York to close since they were approved in 2001.
Empire Resorts also owns the $1 billion Resorts World Catskills casino just six miles away, and the company says the two facilities simply couldn’t co-exist.
The betting at Monticello Casino & Raceway’s video-lottery terminals has slowed to a crawl since the larger casino opened in February 2018, while Resorts World Catskills faces its own financial challenges.
“There is not enough business that remains at that VLT facility to justify the cost of operating it,” Ryan Eller, Empire’s president and CEO, said last week.
The closure raises questions about the future of horse racing at Monticello Raceway and whether the VLTs can be relocated to another venue in the region, which Empire Resorts and state lawmakers are considering.
What happens next?
Empire Resorts is vowing to keep open the venerable harness track, which started racing in 1958.
But closing the VLT facility is drawing criticism from local officials and customers, who talked about missing the small, family atmosphere at Monticello.
Resorts World “will never be like this. This is like a family here. You get to where you know everybody,” Hunter Rhinesmith, 77, of New Jersey, who has come to the track since 1959, said as he and his wife left the racino last week.
There are also concerns the company ultimately wants to dump racing all together, but Resorts World said it has no plans to do so.
“The guardians of racing are the horsemen. Track operators are the guardians of their pocketbooks and nothing else,” said Joe Faraldo, president of the state’s Standardbred Owners Association.
The VLTs could get a new life in other locations in the region.
A state bill would let the Catskill Off-Track Betting Corp. take over the machines and locate them in three locations in its region, which stretches across the Hudson Valley and into the Southern Tier.
To counter the legislation, Empire Resorts has quietly floated its own proposal to reopen a VLT facility with 1,100 machines in Orange County, ideally near the popular Woodbury Common outlet mall.
Empire Resorts had downplayed relocating the VLT facility, but the USA Today Network’s Albany Bureau obtained a copy of the company’s 15-page proposal dated March 19 circulated at the state Capitol that boasts of the money and jobs a gambling hall in Harriman could bring to the region.
On Wednesday, Eller confirmed Resorts World’s interest in a new VLT parlor in neighboring Orange County.
“We’re eager to explore various options to preserve the Monticello Raceway operations, and relocating the raceway video-gaming machines to Orange County would definitely go a long way to that goal,” he said.
“It creates jobs, increases revenue for the state of New York and education, and we look forward to continuing the dialogue with the state, Orange County, Sullivan County and all stakeholders.”
Closing a racino
When Resorts World Catskills opened in February 2018, Empire Resorts said it would keep open the VLT parlor at Monticello Raceway, hoping to serve enough customers so both could be profitable.
But Resorts World has struggled to draw customers from the New York City area as it had anticipated, and it appears the new casino is simply pulling customers from Monticello.
Resorts World’s net win per day — the money left in the slot machines after payouts to winners — has been the lowest in the state at about $119 per machine.
Monticello has been even worse over the past year: a mere $75 win per day, which is the lowest of any racino since the VLT parlors starting opening across New York 15 years ago.
The amount bet at Monticello over the past year fell 50 percent compared to the year prior, records show.
Empire Resorts announced in January it would close Monticello’s gambling hall April 23. All players’ points and perks will be transferred over to Resorts World.
About 40 employees will remain at the racetrack, while the roughly 160 workers at the Monticello casino were offered either a severance package or a job at Resorts World.
Mona Karasik, 65, of Bethel, said she is retiring as a slot engineer at Monticello, saying she wasn’t offered a comparable position at Resorts World.
“It’s a big loss, and I’m going to miss all my people,” she said. “I have two physically challenged sons and to me this was my escape for the last 15 years. And my co-workers were the best. We were like a family.”
The state Gaming Commission said it is set to remove the VLTs, which the state owns.
“The commission has been working with both Empire Resorts and the central system and game vendors to appropriately close the gaming activity and secure and remove all technical equipment,” the commission said in a statement.
The state gets a portion of the revenue from Monticello’s VLTs to fund education, and the horsemen also get a piece for racing, as do local governments for hosting the facility.
Those payments will now be covered by Resorts World Catskills. The state budget doesn’t anticipate any reduction in revenue to the state.
Resorts World, meanwhile, is lowering the number of slot machines it has: Last month, the state approved it going from 2,150 machines to 1,600 machines, 26 percent fewer than initially mandated.
A horse track remains
While the racino at Monticello was nearly empty inside last week, the harness track outside had more horses than people.
Just three or four people were along the rail watching the races last Wednesday afternoon, a sign of how horse racing has become reliant mainly on simulcast betting rather than on-track attendance.
Indeed, attendance at Monticello Raceway in 1987 was about 426,000, state records show, but was down to a meager 13,000 in 2017. With the racino closing, there will be even fewer people on the property.
The amount bet on races there fell from $13 million in 2007 to $4.6 million in 2017.
Jimmy Walker, 81, of Monticello, remembered when the expansive grandstand at the track would be packed. He said he has been coming since it opened.
“The parking lots were full; you couldn’t find a place to park,” he recalled.
Faraldo said he fears Empire Resorts will look to get out of the remaining six years of its contract with the horsemen to run racing at Monticello.
Faraldo said it would difficult to try, though: State lawmakers have opposed any inkling of talk of closing racetracks, citing the jobs they create.
Moreover, state law requires any racino to maintain racing in order to keep their VLT license. Faraldo contended Resorts World’s license could be in jeopardy if it decided to close racing, since Monticello’s revenue sharing is now tethered to the casino.
But Eller said it has no plans to close the track.
“We have an intention and a commitment to continue to run racing operations for the foreseeable future,” he said. “So we have no intent to shut down the racing operations. As long as we’re able to support it, we’ll continue to support it.”
Talk of moving the VLTs
Assembly Racing Committee chairman Gary Pretlow, D-Mount Vernon, introduced a bill in February that would turn over Monticello’s VLTs and the track to Catskills OTB.
The structure would be similar to the one by Western OTB, which owns and run Batavia Downs — a harness track with VLTs.
Pretlow said the measure would put the track on better footing and allow the state and local governments to benefit from keeping the VLTs open.
The bill would let Capital OTB open three smaller VLT facilities in the region, including potentially in Broome, Chemung, Orange, Rockland, Dutchess, Tompkins, Putnam or Ulster counties.
“My concern has always been the viability of the racetrack, and that’s supported by the activity in the racino, not the casino,” Pretlow said last month.
“When they said they wanted to shut down the machines, I suggested that we, the state, take over those machines and make them part of Catskill OTB.”
Resorts World, though, has indicated it could run a VLT parlor in Orange County, projecting in its analysis that the facility would be a revenue boost for the region, include $100 million or more of investment from Resorts World and add about 400 jobs.
Resorts World said it intends to talk to local leaders about the idea.
Either way, officials locally hope that the soon-to-be empty casino at Monticello Raceway can be reused as a space for events or another full-time purpose.
“It’s a great location for economic development,” said Joshua Potosek, the Sullivan County manager.
“There is a lot of real estate where they can do a lot of things.”