Some of the world’s largest casino operators are showering Albany with glittering dollar signs in hopes of persuading legislators and Gov. Andrew Cuomo to let them set up shop in New York City.
Cuomo, so it appears, is having none of it.
“I am very skeptical about some casino deal put together by casino operators promising billions of dollars and everybody is happy,” the governor told reporters last week.
MGM Resorts International wants full-scale gaming for the VLTs-only Empire City Casino at Yonkers Raceway it bought last year for $850 million. Genting Group wants the same for its Resorts World New York City racino at Aqueduct in Queens. Las Vegas Sands is promising to invest upwards of $2.5 billion to build a ground-up gaming resort somewhere in the Big Apple.
The three have launched an aggressive lobbying campaign to lift a moratorium on new casinos before 2023.
The restriction dates back to 2014 and was designed to protect the four upstate operators that won competitive bids for licenses to run New York’s first commercially owned casinos. The licenses were granted after voters approved a constitutional amendment authorizing a total of seven commercial casinos as an economic development experiment. Accordingly, the Legislature decided that none of the initial investments could be in New York City. The four𑁋del Lago Resort & Casino in the Finger Lakes, Rivers Casino & Resort in Schenectady, Tioga Downs Casino Resort in the Southern Tier and Resorts World Catskills, owned by a company controlled by Genting𑁋paid a combined $300 million in license fees for that exclusivity and opened between the end of 2016 and last spring.
As Cuomo put it last week, “When we did casinos we were very careful because there’s a lot of money floating around and a lot of lobbyists floating around. And we were very careful to go through a process. It was primarily for upstate New York.”
Now, MGM, Genting and Sands are promising the state hundreds of millions more and thousands of new jobs to change course and grant them access to
Ron Reese, a spokesman for Las Vegas Sands, which has hired former Gov. David Patterson to press its case, predicts that three licenses competitively awarded for the largest metropolitan area in the United States could garner the state at least $500 million each and ultimately provide more than 16,000 jobs.
MGM has promised to add a hotel to Empire City, a convention center and other attractions, while Genting is already well into a $400 million expansion Resorts World NYC that will add 500,000 square feet of meetings, dining, retail and gaming space and other attractions and includes a 400-room hotel.
All told, it’s a tempting prospect for a state facing a $2.3 billion budget deficit in the coming fiscal year.
Then again, Cuomo’s skepticism is not without foundation. Upstate New York is awash in casinos, racinos and racetracks, and several of them are struggling in a market many observers believe has reached saturation. None of the four commercial operations have achieved the revenue thresholds they forecasted in their winning bids. At the same time, their presence has angered the state’s tribally owned incumbents which themselves were promised exclusivity. In retaliation, the Seneca Indian Nation, for one, has stopped paying the state its compacted share of slot machine revenues from the tribe’s casinos in Buffalo, Niagara Falls and Salamanca. The impasse, now in its second year, has cost the state and the casinos’ host cities well more than $100 million.
Meanwhile, the state Gaming Commission is preparing regulations that could see the four commercial casinos taking sports bets as early as May, with the tribes expected to quickly follow This promises to complicate the state’s gaming picture even further. Pro-sports betting lawmakers are pressing Cuomo to support mobile wagering. The governor believes such an expansion would require an amendment to the state Constitution, and thus far he has refused.
And deep divides are already cutting through the wrangling over New York City.
One thorny issue is how much would have to be paid to the four upstate casinos, whose licenses provide for compensation if the moratorium is lifted. Assemblyman Gary Pretlow, a Yonkers Democrat and chair of the Assembly’s Gaming and Wagering Committee, said he would only consider “breaking the promise” of a seven-year moratorium if the existing casinos are on board.
A split also is emerging between those advocating for licenses for Empire City and Resorts World, local leaders in Westchester County and Queens among them, and those like Las Vegas Sands that want to see competitive bidding.
Michael Levoff, a spokesman for Genting, said, “Unlike other aspirants that will have to start from scratch and face massive regulatory and vetting hurdles, Resorts World is a proven operator ready to move immediately once given the authorization.
“Resorts World NYC has been operating in Queens for over seven years,” he added, “and converting our facility into a full casino would generate instant value for New Yorkers in the form of not only thousands of more good-paying union jobs, but hundreds of millions of dollars each year in additional revenue for the state.”
Conversely, Patterson has argued, “New Yorkers can’t afford a closed-door process that would shortchange our state and our communities. Not only would we lose out on significant revenue and jobs, it would threaten the very values New Yorkers live by—fair, open and equitable competition to provide opportunity for all.”
Last week, Cuomo dealt a blow to MGM and Genting when he made it clear he “just would not support” licenses for the existing racinos.
“It’s a double bank shot,” he said. “We’re going to open up downstate casinos, and we’re going to give money to the upstate casinos, but we don’t want to bid the licenses. We want to give them to existing enterprises.”
But either way, the entire discussion is moving way too fast for his liking.
“Long term, you’re still hurting the long-term competitiveness of those upstate casinos,” he said.
