Tioga Downs Casino: Current and Future Economic Impacts of Live Table Games

Tioga Downs Casino:

Current and Future Economic Impacts of Live Table Games

January 2012

The Tioga Downs Casino, established in 2006, is located in the Town of Nichols in southern Tioga County, New York. It is owned and operated by American Racing & Entertainment, LLC. As of November 2011, Tioga Downs offered 800 video lottery terminals (VLT’s), as well as restaurants and live entertainment. During the year ending March 31, 2011, attendance at the casino totaled 1,230,790. Because of its proximity to the Pennsylvania border, Tioga Downs draws the largest percentage of its attendance from out-of-state (23 percent) of any of New York’s racetrack casinos.

During the twelve months ending in November 2011, credits played at Tioga Downs totaled $731.9 million, of which $670.3million (91.6 percent) was returned to players in winnings.

Throughout this report, the term “enhanced gaming” is used to describe the proposed Constitutional amendment, which would permit live table games and slots in the State of New York.

Economic impact of current operations, 2011

The casino contributes to the TiogaCounty economy through:

  • The operations of the casino itself;
  • The support that the casino provides to the local racing and breeding industries; and
  • Off-site spending by out-of-state visitors to the casinos.

As Table 1 shows, as of November 2011 the casino directly employed 249 full- and part-time workers, with wages and salaries totaling $7.336 million, and spent $1.613 million on purchases of goods and services from businesses in TiogaCounty.

Table 1: Economic Impact of current operations, 2011 (in $000’s)

Jobs / Output
Casino operations
Direct employment / 249 / $7,336.3
Purchasing and construction / 12 / $1,612.7
Indirect and induced effects / 12 / $1,286.0
Subtotal / 273 / $10,235.0
Support for racing and breeding
Direct impact / 130 / $5,593.9
Indirect and induced effects / 36 / $2,902.8
Subtotal / 166 / $8,496.7
Out-of-state visitor spending
Direct impact / 162 / $8,492.5
Indirect and induced effects / 10 / $1,191.9
Subtotal / 172 / $9,684.4
Total / 611 / $28,416.1

Taking into account its direct operations, support provided to horsemen and breeders and off-site visitor spending, we estimate that in 2011 the casino directly and indirectly accounted for 611 jobs in TiogaCounty, and $28.416 million in economic output.

Impact on state and local government revenues

In 2011, we estimate that the Tioga Downs Casino’s operations directly generated more than $27.1 million State government revenues (including more than $21.1 million that was allocated to State aid to education). In addition to these direct payments from the casino, we estimate that other activity generated by the casino – including local purchasing and construction, support for horsemen and breeders, and off-site visitor spending – accounted for more than $1.08 million in additional state tax revenues.

The casino also accounted directly and indirectly for $601,900 in local government revenues, including $286,620 in municipal aid payments to the Town of Nichols and TiogaCounty.

Table 2: Impact on state and local revenues, 2011 (in $000’s)

Direct / Indirect / Total
State
Contribution to education / $21,101.1 / $21,101.1
Contribution to Lottery administration / $5,593.9 / $5,593.9
State income tax / $271.3 / $655.8 / $927.1
State sales tax / $163.2 / $295.5 / $458.7
State corporate tax / $1.1 / $138.3 / $139.4
Total / $27,130.6 / $1,089.6 / $28,220.2
Local
Aid to municipalities / $286.6 / $286.6
Local sales tax / $81.6 / $147.8 / $229.4
Real property tax / $85.9 / $85.9
Total / $454.1 / $147.8 / $601.9

Impact of investment in expanded facilities

Expansion of casino operations to include the full range of table games would significantly increase the casino’s impact on the economy of TiogaCounty. If the constitutional amendment authorizing enhanced gaming is approved, Tioga Downs plans to invest approximately $21.5 million during 2013 and 2014 in new and expanded facilities, including:

  • A 72,000 square-foot hotel;
  • 10,500 of additional gaming space;
  • 19,900 square feet of event space;
  • 11,300 square feet of additional restaurant space; and
  • A parking garage.

We estimate that during 2013 and 2014,, this investment will directly and indirectly support approximately 222 person years of employment and more than $27 million in county-wide economic output.

Table 3: Impact of expansion: construction (employment in person-years, output in $000’s)

Employment / Earnings ($000’s) / Output ($000’s)
Direct / 176 / $5,185 / $21,500
Indirect / 26 / $923 / $3,222
Induced / 20 / $566 / $2,321
Total / 222 / $6,674 / $27,043

Impact of expanded operations

Tioga Downs estimates that authorization of enhanced gaming would result in the creation of 136 new jobs in hotel, gaming and restaurant operations (over and above the 249 employed by the casino in 2011). Based on 2011 salary and wage levels, we estimate as shown in Table 4 that the annual payroll for these 136 new employees (including tips) will total approximately $4.41 million.

Taking into account its direct casino operations, support provided to horsemen and breeders and off-site visitor spending, we estimate that the introduction of enhanced gaming would directly and indirectly result in the creation of 253 new jobs in Tioga County, and an increase of $12.52 million in County-wide economic output.

Table 4: Impact of expansion: increase in impact in the first full year of operation (output in $000’s)

Jobs / Output
Casino operations
Increase in direct employment and payroll / 136 / $5,330.5
Increase in purchasing / 2 / $333.3
Increase in indirect and induced effects / 6 / $645.6
Subtotal / 144 / $6,309.4
Support for racing and breeding
Increase in direct impact / 18 / $750.0
Increase in indirect and induced effects / 4 / $370.5
Subtotal / 22 / $1,120.5
Visitor spending
Increase in direct impact / 82 / $4,430.8
Increase in indirect and induced effects / 5 / $665.6
Subtotal / 87 / $5,096.4
Total / 253 / $12,526.3

Impact of enhanced gaming on state and local revenues

Enhanced gaming and the expansion associated with it will also increase state and local government revenue. We estimate that the casino’s investment in new and expanded facilities will generate approximately $320,000 in state income, sales and business taxes; and nearly $27,000 in local sales taxes.

In addition to these one-time, construction-related revenue increases, expanded casino operations will also increase annual state and local revenues on an ongoing basis. This will include an increase of $6.15 million in payments to the state from the casino’s net win, over and above what it would pay in the absence of enhanced gaming; and $759,400 in other state taxes.

Assistance to municipalities would increase by $184,600 (assuming that it increases by the same percentage as payments to the state out of the casino’s net win); and local sales taxes would also increase by $97,500. We estimate that the planned new hotel would also generate about $105,500 in local hotel taxes.

Table 5: Increase in annual state and local revenues resulting from enhanced gaming (in $000’s)

Direct / Indirect / Total
State
Increase in contribution from net win / $6,150.0 / $6,150.0
Increase in State income tax / $234.5 / $238.6 / $473.1
Increase in State sales tax / $87.5 / $107.5 / $195.0
Increase in State corporate tax / $41.0 / $50.3 / $91.3
Total / $6,513.0 / $396.4 / $6,909.4
Local
Increase in municipal aid / $184.6 / $184.6
Increase in local sales tax / $43.8 / $53.7 / $97.5
Increase in hotel tax / $105.5 / $105.5
Increase in real property tax / TBD
Total / $333.9 / $53.7 / $387.6

As the following graphs show, with enhanced gaming:

  • The total number of jobs directly and indirectly generated in Tioga County by the casino will increase by 41 percent to 864.

  • Total output will increase by 44 percent, to $40.9 million.

  • State revenues will increase by 65 percent, to $46.6 million.

  • Local government revenues will increase by 64 percent, to $990,000.

1Appleseed