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Long IslandSuffolk

Islandia casino grosses at least $200M in August, plans updates to hotel

Electronic roulette, blackjack and craps are available at

Electronic roulette, blackjack and craps are available at Jake's 58 Hotel & Casino in Islandia, which generated $199.6 million in revenue through Aug. 26. Photo Credit: Barry Sloan

Some Long Islanders preferred baccarat and blackjack this summer over beaches and barbecues.

Suffolk County OTB’s 6-month-old video lottery betting parlor at Jake’s 58 Hotel & Casino in Islandia continued its run as one of the state’s most successful this summer after adding 273 terminals in late May.

The new terminals gave the casino 1,000 machines — the maximum it is allowed by state law.

The expansion helped revenue at the casino jump by 7 percent in June — and another 24 percent in July — figures from the state Gaming Commission show. And August revenue, $199.6 million through Aug. 26, were on pace to set a new monthly high.

“We’re real pleased with how we’re doing. The numbers have been very, very strong,” Suffolk OTB president Phil Nolan said in an interview.

The bankrupt agency is counting on casino cash to help pay off $15 million in debt. “We’re anticipating continued strength, to put it mildly,” Nolan said.

Nolan and officials at Delaware North, the Buffalo company that operates the casino, said one measure of the facility’s success is the more than 80,000 people who participate in a rewards program through which bettors earn points for free games, hotel rooms and dinners by playing frequently and betting more money. The Gaming Commission reimburses the casino for free bets made as part of the rewards program, Jake’s 58 general manager Chuck Kilroy said.

“Long Island has an awful lot of things in the summertime,” Kilroy said of activities that compete for visitors. “Overall, we keep seeing more people coming in.”

Revenue at the Islandia casino jumped to $169.3 million in June, compared to $157.7 million the month before, records show. Revenue spiked again in July, to almost $210 million.

Delaware North is paid a percentage of casino revenue under a contract with Suffolk OTB to manage the facility.

Critics contend the long-term prognosis for video casinos is poor and that they eventually will lose money as bettors find other things to do.

But the Islandia casino’s short-term prospects are strong, said Fitch Ratings analyst Colin Mansfield, who tracks the gaming industry for the Manhattan-based agency.

He said the casino essentially has a monopoly on Long Island and benefits from an affluent population of about 3 million in Suffolk and Nassau counties.

“It’s obviously one of the strongest-performing casinos in New York,” Mansfield said. “It’s really the only game in town.”

Mansfield said casino revenue could suffer in the long run as Long Island’s population ages and residents on fixed incomes have less money to spend on entertainment. Casinos also may face competition from non-casino gaming, such as online betting and smartphone gambling apps, he added.

The Islandia casino could also struggle to attract younger residents who have “not yet shown as high a propensity to gamble as the older generation,” Mansfield said.

Nolan said he is confident the casino will continue to succeed.

“It’s a popular recreational activity that cuts across all lines, and we have the market on Long Island,” Nolan said. “It’s close to home.”

Kilroy said he already is planning to give the casino a fresher look.

Within a month, the casino will replace some video lottery terminals with electronic table games run by a “virtual dealer,” he said, adding that the change is in response to bettors who said they prefer a more traditional casino experience.

“We’re going for some variety,” Kilroy said.

Changes are in store, as well, for the 35-year-old hotel, which Delaware North purchased last year. It was previously operated as the Islandia Marriott Long Island hotel.

Kilroy said each of the hotel’s 228 rooms will be renovated, with larger bathrooms and improved accessibility for disabled customers, and that improvements also are planned for the hotel’s plumbing and fire safety systems.

“The rooms are nice now, but they’re going to be really nice when we’re done,” Kilroy said. “Of course, it doesn’t hurt earning the money from the casino in order to pay for it.”

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