New York Times

A casino that opened a year ago at the fading Aqueduct horse racing track in Queens has emerged as the country’s highest-grossing slot parlor, helping to reshape the gambling landscape in the Northeast as patrons chose less opulent, more local casinos instead of traditional gambling meccas in Atlantic City and Connecticut.

The casino, Resorts World Casino New York City, generated nearly $630 million in revenue over the last 12 months from electronic slot machines, more than the slots at any of the 12 casinos in Atlantic City or at Foxwoods or Mohegan Sun in Connecticut. The average income from an electronic slot machine is more than $370 a day, compared with $169 for slots on the Strip in Las Vegas.

The success of the casino, the only one in the five boroughs of New York, suggests that no matter how luxurious the accommodations or exciting the entertainment, nothing appeals more to gamblers than a casino that is nearby. More than 5.6 million people live within 10 miles – a short subway ride or car trip – of the casino, which expects to see its 10 millionth customer by the end of October. At the same time, the runaway success of the casino is also expected to have an impact on how the administration of Gov. Andrew Cuomo moves ahead with plans to approve more, even larger casinos around the state.

“Convenience and location are the driving factors today,” said William R. Eadington, director of the University of Nevada’s Institute for the Study of Gambling and Commercial Gaming. “If you put a casino in a high-density population like Queens, you’ll do well.”

And others will not. Casino revenues in Atlantic City have dropped 36 percent, from a high of $5.2 billion in 2006 to $3.3 billion last year. Revenues are also down at Connecticut casinos. Last month, Mohegan Sun in Uncasville, the world’s largest casino, announced it would lay off 328 more workers, blaming the casino at Aqueduct and a weak economy.

“I used to go to Mohegan Sun and Foxwoods on the fast ferry,” said Ralph Barbaro, 77, a retired salesman, as he played a slot machine at Resorts World. “This is very convenient. It takes me 20, 25 minutes to get here from my home on Long Island.”

Genting New York, a subsidiary of the largest gambling company in England and Southeast Asia, opened the casino last fall, with 4,525 electronic slot machines and 475 electronic table games. Genting transformed the aging grandstand at Aqueduct, where racing seldom drew a crowd, into a palace packed with clanging machines, restaurants and gamblers. There are now nine racetrack slot parlors and five tribal casinos in New York.

New York’s slot parlors pay the highest tax rate in the nation, a total of 60 percent or more, compared with less than 10 percent in Las Vegas and Atlantic City. By law, the bulk of the money, 44 percent or $3.3 billion since 2006, goes to education.

There are similar success stories in other states. Gamblers no longer have to get on a plane or endure a three-hour bus ride to play slot machines and blackjack now that casinos and slot parlors have proliferated across Delaware, Maryland, Pennsylvania and Rhode Island. More casinos are on their way in Pennsylvania, Massachusetts and Maine.

“This trend is really tough on traditional hotel-casinos with 1,000-room hotels,” Eadington said. “They have trouble filling the rooms.”

With the proliferation of casinos and slot parlors, the Connecticut and Atlantic City establishments are not the only ones feeling the pinch of competition. Empire City Casino in Yonkers, until recently the most profitable of New York slot parlors, says it has seen a 15 percent drop in business since Resorts World opened.

State officials and gambling executives say they believe that major resort-casinos, especially one in Manhattan, would be an enormous boon to the economy. Casino proponents say that operators would pay as much as $1 billion for a license in New York City. And some experts contend that resort-casinos employ seven for every $1 million gambled, while slot parlors average only three jobs for the same sum.

But the success of the casino at Aqueduct could also be used as an argument against future casinos, because it appears to be stealing some customers from others to succeed. A full-scale casino in New York City or on Long Island would attract huge crowds, experts say, and almost certainly put a big dent in profits at local slot parlors.

“You may be successful with a commercial casino in New York City, but there’s going to be collateral damage,” said Alan Woinski, president of Gaming USA, which publishes analyses of the gambling industry. “Everybody thinks casinos print money. Those days are over. The market is becoming saturated.”

State officials contend, however, that gambling is still growing in New York, where revenues have jumped to $1.4 billion in the last fiscal year from $875.2 million in 2007. The Aqueduct and Yonkers casinos generated over $1.1 billion in revenue in the past year, more than double what Empire City did a year earlier. Officials say they want to balance economic development and tax revenue while avoiding pitfalls of increased competition and tax rate changes.

But Genting, MGM Resorts, Las Vegas Sands and the other gambling companies that want to build full-scale casinos in New York also say they want the tax rate slashed substantially in order to justify building a $2 billion resort-casino.

With a drop in revenue in some slot parlors and a lower tax rate at the full casino, the state could well see a decline in direct revenues to education from the nearly $1 billion a year it gets from the slot parlors.