Canada Warily Eyes New York Casino Expansion
Canada's gambling industry is warily eyeing the goings-on across the border, as the state of New York mulls the option of adding up to seven new land casinos on Indian territory.
Canadian casinos are already suffering because of the gambling establishments in the United States, and there is a growing belief that if even more casinos are built in the US, it could have a major impact on the Canada's gambling industry.
In the last decade alone, profits from Canadian casinos near the US border have dropped from $800 million down to $100 million.
Now, with New York planning a major expansion of gambling establishments - besides those operated by the Senecas, Mohawks and Oneidas - profits could fall even further.
New York has said that prime locations for new locations would be the Niagara Falls and Western New York areas.
Niagara Falls Casinos Suffer
Casinos in the Niagara Falls are a prime example of how competition, a weak dollar and post-911 security issues could have a negative impact on their establishments.
As more and more casinos are build in the area, the competition becomes tougher and existing ones suffer the most.
"We're getting beat up on all sides," the mayor of Niagara Falls, Ontario, Jim Diodati is quoted as saying.
The Canadian casinos have been badly impacted by the growth in popularity of the Seneca Niagara Casino in the US, which was established in 2002. The casino attracts visitors with its tax-free policy, free alcohol and significant hotel discounts.
As a result, the Casino Niagara and other casinos on the Canadian side may be shut down. The OLG has already hinted of this possibility as it introduces the idea of a bigger gambling resort in Toronto.
Loss of Jobs at Canadian Casinos
Besides poor profits, the closure of casinos such as Fallsview in Niagara will have a detrimental effect on the local economy.
The mayor believes that nearly 5,000 jobs could be in jeopardy, and this could have a chain effect on the rest of the economy.
"Any negative effect on the casinos sends a negative message to the businesses that set up on the periphery of the casinos in Niagara Falls," said Diodati. "They're woven into the fabric of the tourism community - the hotels, restaurants are all tied together."
However, some analysts believe that New York casino expansion does not make US casinos immune to decline either, with the chances of greater competition impacting the profits of existing gambling establishments in the state.
