Catskills Casino Misplaces $37.3 Million in Q2
In the last couple of months, the gambling industry has been in a strange situation, trying to maintain a balance between past and present. As many online casinos continue to develop and get the attention of the general public, many land-based establishments are taking hits and experiencing lower profits. Considering players are accepting modern ways of playing they favourite games, traditional casinos will continue to decrease in popularity.
The online way is becoming more convenient, and many people enjoy gambling at their homes. But, to back up our claims, we are going to demonstrate our point with financial evidence. The Empire Resort, a parent company of New York-based casino Catskills, has revealed a shocking quarterly loss of $37.3 million for the second fiscal quarter.
While the New York’s casino net stayed relatively stable during the second quarter, achieving $49.1 million and surpassing the last year’s revenue, the official admitted that operating costs have become too high for them to keep up. The future will be quite unstable for this establishment, especially if the current trend continues to rise. More and more people will switch to online casinos, leaving behind the traditional ones.
The costs are increasing
The operating costs enhanced for Catskills by massive 197%, which means they had to pay $71.5 million for the quarter under review. This raise will rapidly drain the Empire’s revenue. The operator also pointed out the long-term debt of over $462 million across both of its establishments, even involving small gambling floor in Monticello Raceway.
The Empire Resorts establishment opened Catskills Casino in February, spending more than $1.2 billion for its construction. This is only the fourth non-Indian gaming venue opened in Upstate New York in the last two years. This fact strongly indicates that the market is over-saturated and that there is no demand for the land-based casinos.
People are becoming aware of this fact, and that’s why they are choosing the online gambling sites. They provide them with the convenience, opportunity to play from home and easy profit.
Operators show proceed with caution
With the apparent loss in revenue and massive operating costs, other operators should learn on Empire’s example. Empire Casino has suffered significant damage and this should be a warning to other casino owners and people who are planning to invest in similar projects.
Also, experts have urged operators to do detailed research and maybe review other areas, which could contain untapped profitable markets that may even offer them dominance over regions they select.
The Empire Resort operates and runs two casinos in the general New York area. It was founded in 1993 and currently employs more than 300 people at its head office. The last reported annual revenue was $752.9 million in 2017 and price on NASDAQ now stands at $12.75 per share.
The company may still have a chance to pull out, but with the current online casino trend, we are scared for the future of the land-based establishments.