The casino’s financial outlook has been bleak since reporting $147 million in revenue in its first year of operation — more than $100 million shy of the $250 million the casino’s operators projected it would raise during the inaugural year.
Del Lago’s revenues improved slightly in 2018, but not enough to help its ratings. The casino is operated by Wilmot Gaming, which was founded by Rochester-area developer Tom Wilmot, and Peninsula Pacific. The casino is managed by JNB Gaming.
Moody’s downgraded del Lago’s corporate family rating and the probability of default rating. The service said the casino’s financial outlook remains negative amid concerns that it won’t be able to support its annual charges of $50 million in future years.
“Lago’s ramp up in terms of gross gaming revenue continues to be at a level well below expectations, and at a rate that Moody’s believes will not generate enough (earnings before interest, taxes, depreciation and amortization) to cover the company’s interest and scheduled principal repayments during the next 12 to 18 months,” said Keith Foley, a senior vice president at Moody’s.
Foley also noted that del Lago “will require a restructuring that involves some level of impairment” if there isn’t additional equity invested.
A del Lago spokesman didn’t respond to a request for comment Thursday afternoon.
Moody’s acknowledged del Lago’s ability to offer table games which aren’t available at racinos in New York, especially facilities close to the casino. According to its latest weekly financial report submitted to the state Gaming Commission, del Lago has 77 table games and 14 poker tables.
Despite the advantage over racinos, del Lago faces other challenges. The Oneida Indian Nation operates three casinos within close proximity to the Seneca County facility. The Oneidas’ top site is Turning Stone Resort Casino in Verona.
The Oneida Nation isn’t the only competitor. Moody’s named the Seneca Nation casinos in western New York as a “direct competitor” to del Lago because of the tribe’s marketing in the Rochester area. The Oneidas and Senecas also have more favorable tax regimes than del Lago, Moody’s explained.
While the casino’s outlook remains negative, it reported its best weekly gross gaming revenue total since opening in February 2017. For the week from Dec. 31 through Jan. 6, del Lago’s gross gaming revenue totaled $3,747,192.