Vernon Downs gets job-creation break as gaming revenue sinks

David Hill
Staff writer
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Posted 7/12/19

With increased competition for places to gamble in upstate New York, Vernon Downs hasn’t been able to maintain the employment level set in a 2010 deal with Oneida County to help with an expansion, …

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Vernon Downs gets job-creation break as gaming revenue sinks

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With increased competition for places to gamble in upstate New York, Vernon Downs hasn’t been able to maintain the employment level set in a 2010 deal with Oneida County to help with an expansion, but the company says it’s taking steps to rebuild its market share and to be a more attractive place to work.

The company was granted a modification last month in the number of full-time-equivalent jobs it has to maintain under an assistance package with the Oneida County Industrial Development Agency. Under a 2010 package for an expansion at the Vernon Downs complex in Vernon, its goal was to have 280 FTEs. The IDA board modified that to 220 at its June 27 meeting. The package expires in two years.

Vernon Downs had 233 FTEs at the end of December. Employment varies widely over the year, with many more added during the racing season, company representatives noted. It approaches 300 at peak, they’ve told the IDA previously.

As of June, it had 61 open positions, chief financial officer Alex Figueras told the board. A state-mandated increase in the upstate minimum wage likely has made other employers more attractive, particularly when new employees have had to pay a $200 licensing fee, though Vernon Downs has begun paying that upfront and offers referral bonuses when an employee’s family or friends join on, Figueras said.

With no bus lines to Vernon Downs, employees need a vehicle or a ride to get to work, company representatives told the board.

Yet Vernon Downs hasn’t cut jobs or laid-off employees, Figueras said.

“Vernon Downs has not had any layoffs even though we have had some very difficult years,” he told the IDA board. “We have a very loyal core group of employees but attracting and retaining employees has really been a constant struggle for us.”

Meanwhile, revenue from video lottery terminals, representing 80 percent of revenue, has decreased 33 percent to $29 million since the peak year of 2013.

That was the year New York voters approved adding up to seven commercial casinos upstate, which led to new gaming venues in the Finger Lakes, Schenectady, the Catskills and Southern Tier, including one owned by Vernon Downs’ parent company. The Oneida Indian Nation, which runs Turning Stone resort casino in Vernon, also has added two new gaming venues.

Another factor, Figueras told the IDA board, is a state limit on non-Native American gaming venues related to free play credit given visitors. A tax is imposed on free-play credit beyond 15 percent of net revenue from video lottery terminals, while Native American casinos do not have a tax on free play, according to Figueras.

Horse racing loses money on its own but is financially maintained by its connection to video lottery terminals, the electronic slot machines tied to a state central computer system and allowed at racetracks. A portion of proceeds go to pay for public education.

“Racing, as a standalone, loses money but is financially maintained by being connected to a VLT,” Figueras said in a email to the Sentinel to elaborate on his earlier comments.
Entertainment and food-and-beverage service also are seen as loss-leader amenities for guests.

Vernon Downs faces other headwinds. Newer venues may attract some visitors, and where being non-smoking once was a draw, other venues have adopted the same policy, company representatives noted.

Another impending challenge may be legal sports betting following a federal court ruling allowing it last year. Legal gambling on sports awaits promulgation of rules by the state Gaming Commission, and several casinos, including Turning Stone, have announced preparations to offer it as soon as it’s allowed.

To fight back, Vernon Downs is boosting its promotion, according to Figueras.

“Starting this year and going forward our marketing programs have been revitalized to increase guest engagement and excitement across the casino floor – more drawings, more winners, and bigger prizes,” Figueras said.

“We’ve changed up our weekend entertainment to feature the most popular locally known bands. We also engaged a national, award-winning advertising agency and have subsequently introduced new branding and advertisements across outdoor, television, and radio. These are just a small portion of all the great, positive steps we’ve taken to increase our market share,” Figueras added.

The state Legislature this year also extended 2017 legislation loosening limits on using revenue for operation through 2021.

General Manager Charles Otto told the IDA board that while at least one other race track closed as the popularity of harness racing declines, Vernon Downs and Tioga Downs owner Jeff Gural, a New York City real estate developer and philanthropist, has chosen not to out of love of harness racing and other concerns.

“Jeff could do that tomorrow and save tons of money,” Otto said. “He cares about the community, he cares about the people that are in this community working at that track. That’s why he continues to support that track even though we lose money year over year.”

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