A casino atop Saks Fifth Avenue. A Monaco-style casino for James Bond wannabes. A casino on Times Square. How about a casino along the East River? In New York, these are some of the ideas being bandied about as lawmakers consider three new gaming licenses for the New York City area, where gaming companies may be willing to ante up $1 billion to run a casino.
If lawmakers in Albany are serious about listening to communities, however, Manhattan may be discarded as a location.
Not that New York City will be shut out. The city has five boroughs, and one of them—Queens—already has a racino, raking in money with its slots-only inventory. Resorts World is considered a frontrunner because it’s open already and the upgrade to a full-scale casino wouldn’t take nearly as long as a casino in virgin territory. Same with MGM Resorts’ racino in Yonkers, just north of the city.
If the frontrunners prevail, that’s leaves one license to be coveted. Could it be sited in Manhattan, and if so, where? Staten Island? Or should lawmakers look at Long Island or Westchester County? So much to hash out.
The details will be hammered out eventually, but it’s unlikely to happen before baseball season kicks off in little more than a week. Suffice it to say one casino will likely end up at Empire City in Yonkers, another in Resort World in Queens and a third will be up for grabs.
The goal is to get more money in the state treasury through licensing fees and additional taxes. Fees under consideration range from $500 million to $1 billion, according to CBRE Equity Research. It’s not for the faint of heart or those with short pockets.
The discussions also touch on taxes. So far, we’re talking 10 percent for table games and a whopping 45 percent for slot machines. By way of comparison, Atlantic City has a 9.25 percent tax on everything. Then again, the two VLT operators in Queens and Yonkers pay an average of 66 percent.
Still, there will likely be no shortage of takers. The state has received around 30 responses from companies willing to play ball in New York. Las Vegas Sands, Hard Rock, WYNN, Rush Street and more.
Since license fees and taxes remain constant among all the respondents, legislators outlined other metrics: speed-to-market, maximizing revenue to the state and host communities, maximizing capital investment, and providing the most quality jobs. Indeed, in a post pandemic world, high paying employment is a major factor. One report said the three full scale casinos could lead to 21,500 jobs.
New York City Mayor Eric Adams believes the city deserves two of the three licenses, according to the New York Times. To drive home the point, Adams’ chief of staff, Frank Carone met with Robert Goldstein, CEO of Las Vegas Sands. You can be pretty confident their discussion did not dwell on blackjack strategies.
Governor Hochul’s plan speeds up the timeline by doing away with penalties downstate operators would have to pay to the upstate casino owners if they moved forward before the ban expires.
Still under discussion is how much control local communities wield. “We want to make sure all the parties involved have some say as to if the location as proposed is acceptable by them,” said New York Assemblyman Gary Pretlow, chairman of the Racing and Wagering Committee, according to Spectrum News.
Casino operators point out that delaying the decision for a year will cost New York state to lose tax revenue as gamblers seek out neighboring states.
Governor Kathy Hochul wants a provision in the budget to accelerate the process. The Senate seems favorable to the change, the Assembly maybe not so as it does not include it in its initial budget proposal. But that could change. Remember what’s also at stake: jobs, jobs, and more jobs. About 95 percent of members of the Hotel Trades Council, AFL-CIO union—or 37,000 people—lost their jobs in the pandemic. Almost 10,000 remain unemployed.
“These are jobs that pay $36 an hour, have free family health care and have a pension plan,” said Richard Maroko, the current union president. “So, they are in dire straits because many of them have been out of work for two years without any immediate prospect of comparable employment.”
The hotel union has funneled at least $880,000 in campaign contributions to Democrats in Albany since 2020, according to campaign disclosure reports.
Add the Water Club to the list of venues seeking a casino license in New York. An upscale restaurant and event locale on 30th Street and the East River in Kips Bay, the Water Club is on the list of potential sites, according to the New York Post.
“The third casino shouldn’t go anywhere but Manhattan,” said Michael O’Keeffe, the owner of the Water Club, who argued Manhattan is ideal for a small, high-end, Monte Carlo-style casino that will cater to a different market than casinos in Queens and Yonkers. “There’d be no taking money away from poor people who can’t afford to gamble.”
Not everyone agrees.
“There should not be a casino there, and I’m not even happy that the Water Club is there,” Community Board 6 member Anton Mallner said at a meeting. Others called the idea for a 24,000-square-foot casino with 450 feet of “open deep-water pier” for gaming a bad idea, citing concerns about traffic and rowdy high rollers. But board member Daniel Devine said a casino would be a financial windfall for the city and neighborhood.
“I would love for it to be in our district,” he said. “We really have to think about the long-term viability of the tax base in New York.”
“There already is a casino in New York, and it’s on Rockaway Boulevard (Queens), so I encourage you to go and enjoy,” board member Sandra McKee said.
Diane Liotta said no dice. She fears it will attract bad characters.
“Rowdy people have never been allowed into any of my establishments in my career,” O’Keeffe said. “We set a tone that proper behavior is expected.”
“I think a casino would have a harmful effect on the whole atmosphere in the area surrounding it,” said Assemblyman Richard Gottfried, a Democrat who represents parts of Manhattan’s West Side, and Times Square, according to the New York Times. “I find it hard to believe that once there is one casino in Manhattan, there wouldn’t be strong pressure to have more.”
Even if the third license goes to Long Island, the same pressure for another and another will likely rear its head.
Gottfried, as well as other Manhattan lawmakers, such as Liz Krueger, an influential chairwoman of the Senate’s finance committee, have long been seen as political roadblocks to a Manhattan casino. They are among the lawmakers who have insisted that localities have a strong say in the location of new casinos.
Krueger has also met with representatives from Hard Rock and SL Green, a commercial real estate company, who want to put a casino at SL Green’s skyscraper at 1515 Broadway in Times Square, pitching the project as a way to increase tourism in the area.
Other companies, perhaps wary of the challenges that a casino in Manhattan represents, have focused their sights beyond the borough, such as near Citi Field in Queens.
Soo Kim, the chairman of Bally’s, a Rhode Island-based gaming company with 16 casinos across the country, said that Bally’s had ruled out Manhattan because “it’s not the easiest place to get in and get out of.”
“We’re thinking more of the outer boroughs, a place where we think that we can have the convenience for people from New York City, but also to be able to pull from the suburbs,” said Kim, adding that the key was to “find a community that’s willing to host the project that you want to build.”
“We want to make sure all the parties involved have some say as to, if the location as proposed is acceptable by them,” said Pretlow, the Democrat who leads his chamber’s Racing and Wagering Committee.
“I didn’t have community input when I had Resorts World thrust upon us,” said Senator Joe Abbaddo, Pretlow’s counterpart in the state Senate. “I’m thankful 10 years later that we have it. But we couldn’t even pick out the color of the carpet. But community input is important. The degree of community input is what’s being discussed.”
New York has also expanded its gambling laws to include sports betting apps on mobile devices. With so much gambling, some industry experts have warned of a Northeast seaboard oversaturation by a variety of gambling options. The impact will be felt in Connecticut, Atlantic City, Rhode Island and Massachusetts.
But Pretlow pointed to research showing table-top gaming attracting an older set of people; sports betting a younger crowd.
“I don’t think there is a worry about saturation because the population of the area is well over 10 million people,” he said.
The response is to bring in more amenities. Both Foxwoods and Atlantic City are developing an indoor water park. Foxwoods will add a convention center and high stakes bingo hall.
“We’re reaching oversaturation in the Northeast,” said analyst Clyde Barrow. “That’s why so many are in financial trouble,” including an upstate New York casino that faced having to declare bankruptcy in 2019 and some Atlantic City casinos that struggled amid the pandemic, according to The Day.
“In New York, will adding table games to two casinos downstate grow the pie or cannibalize it?” Ray Pineault, CEO and president of Mohegan Sun said. “The only other one (potential Northeast casino site) on our radar is northern New Jersey. … That’s always been on our radar. New York may force New Jersey to do something yet.”
