Senecas may slow expansion of casinos
The Seneca Gaming Corp. is hinting at a slowdown in its fast-paced expansion efforts, despite a nearly 10 percent rise in its third-quarter net income.
In issuing results for the three-month period ending June 30, the gaming arm of the Seneca Nation of Indians cautioned Thursday that it is evaluating the “scope, phasing and timing” of expansion at its Seneca Buffalo Creek and Seneca Allegany casino properties. It is also “reassessing the scaling and scope” of clubhouse designs for its Seneca Hickory Stick Golf Course.
“Given the impacts that other gaming operators have felt, we are very proud to report today that Seneca Gaming Corp. has produced a double-digit increase in net revenues,” said Seneca Gaming Chairman Barry E. Snyder Sr.
But he added that moving forward, the gambling and hospitality company “will continue to keep a close eye on the economic conditions that are facing the entire country.”
Seneca Gaming President and Chief Executive Brian Hansberry expressed a similarly cautious tone, citing a general weakening economy and increased competition in the region.
“We are continually managing our operations to mitigate these adverse developments,” Hansberry said.
Seneca Gaming’s capital investments in its three casino properties, and the golf course, totaled $36.2 million in the third quarter, lead by $22.2 million for construction on the planned $333 million Buffalo Seneca Creek Casino & Hotel in downtown Buffalo.
That project, which faces legal challenges, is slated to open in mid-2010.
The gaming company’s current project list also includes construction of a $130 million hotel tower at Seneca Allegany Casino & Resort, in Salamanca, and the $25.5 million Hickory Stick golf club in Niagara County.
Seneca Gaming spokesman Philip J. Pantano said the comments from Snyder and Hansberry don’t reflect any specific retrenchment in the corporation’s rapid and ambitious growth plans.
“We’re doing very well, as our third-quarter numbers demonstrate, but we can’t ignore that fact that casinos around the country as seeing drops in revenue, and putting expansion projects on hold, if not shelving them completely,” Pantano said.
Earlier this week, the New Jersey Casino Commission reported an 11 percent dip in July revenues at Atlantic City casinos. Two gaming companies recently announced delays in Atlantic City expansion plans.
On Aug. 1, Boyd Entertainment announced it is putting its $4.8 billion Las Vegas Echelon mega-casino project on hold due to the tight credit market. And Harrah’s has scaled down its Margaritaville project in Biloxi, Miss.
“The truth is the economic downturn is having an impact on the gaming industry. It’s an old wives tale that we’re recession- proof,” said Holly Thomsen, spokeswoman for the American gaming Association.
In its third-quarter filing with the federal Security and Exchange Commission, Seneca Gaming reported net revenues of $165.7 million, up $16.5 million, or 11 percent, from the prior year’s quarter.
Expenses climbed $9.3 million, or 8 percent, to $124.4 million. Net income was up $2.9 million to $32.2 million, a rise of 9.8 percent.
