The quest for the final three casino licenses in the New York City area has begun. The New York State Gaming Commission received 30 requests for information, an informal gauge of interest.
Of the 30, eight come from casino operators: MGM Resorts International, Okada Manila International, Las Vegas Sands Corp., Wynn Resorts, Rush Street Gaming, Genting New York LLC, Hard Rock International, and Bally’s Corp.
Here’s the potential rub. Of the eight, two of them have their foot into downstate New York already. MGM Resorts operates the Empire City Casino at Yonkers Raceway, while Genting runs Resorts World New York City, at Aqueduct Racetrack in Queens. Neither is a full-scale casino. Along with Jake’s 58 Casino in Islandia, they offer video lottery terminals and electronic table games.
There is growing support to make at least Empire and Resorts World into full-fledged casinos, which would just leave a single gaming hall license.
Getting full approval means live table games, slot machines and a sportsbook.
In 2013, voters approved a constitutional amendment legalizing commercial casinos, with up to seven across the state. Four of them went upstate and downstate casinos were not permitted to open for seven years from the first opening of the other venues. The period, designed to give the upstate casinos a head start to build up business, ends in 2023. But some lawmakers want to move forward now.
Senate Racing, Gaming, and Wagering Committee Chairman, Joseph Addabbo, estimated the three licenses could provide $2 billion in funding for the state.
Addabbo and his Assembly counterpart Gary Pretlow, favor a plan to give Empire City and Resorts World full casino licenses. They’re not alone.
The New Bronx Chamber of Commerce sent a letter supporting the plan to elevate Empire City. Chamber President Lisa Sorin said almost 30 percent of Empire City’s workers live in the Bronx.
“The expansion of its operations will generate additional opportunities for job creation benefiting Bronxites,” she said.
Westchester County Executive George Latimer added that converting Empire City would create 2,500 new direct jobs and 7,500 indirect jobs.
New York City Council Member Adrienne Adams wrote in support of Genting’s Resort World, which operates in her district. She said Genting has invested hundreds of millions into the community and has helped spur economic development in the area.
Rush Street Gaming, which operates Rivers Schenectady in upstate New York, want the commission to establish a request for proposal process that lays out the requirements and how the commission will evaluate submissions. The company also says all licenses should be subject to open competition.
“It is critical that there be a level playing field for all potential applicants within the process, creating an impartial system and incorporating community input and assessment of current operations,” Rush Street said.
In other New York news, with the final stages in motion for mobile sports betting to launch by Super Bowl, supporters expressed concern over the high tax rate of 51 percent. Will it drag betting down? Will the tax rate keep bettors going into New Jersey to wager as they did before the passage of mobile sports betting?
Speaking at the National Council of Legislators from Gaming States conference in Austin, Texas, industry lobbyist and attorney Bill Pascrell III compared the approach to socialism.
He told NY Online Gambling, “When you’re taxing someone at 51 percent, with a thin margin, it’s essentially a socialist gaming empire,” Pascrell said. “The state is essentially their partner without having to spend any money.”
Some 25 percent of New Jersey’s online gaming comes from New Yorkers, Pascrell said. He doesn’t expect that to change much. To avoid the high taxes, New Yorkers could still travel to New Jersey to bet, where the rate is 14.25 percent.
“The incentive for all of the major operators, and I’m not going to single anybody out, is they’re going to be buying buses, caravans, and limousine services to get their players to move across the river,” Pascrell said. “I think it’s very short-sighted of New York.”
Is the size of the market and the cachet of the nation’s media capital enough to neutralize the hefty tax burdens? So far, casino operators say they’re ready to go.
“For FanDuel, we’re thrilled to participate in New York and it’s an exciting state,” said Stacie Stern, the sportsbook’s government affairs director. “Every state has its own thing going. I just think that states really do cling to their own identities and do things in their own ways. Or, maybe they look at it as a lesson in what not to do.”
Brandt Iden, head of government affairs for Sportradar U.S., called the tax rates in New York “astronomical” and speculated they could be back-breaking to operators.
“We’re quickly killing the golden goose. If you tax the heck out of it, it will die. You’re not supposed to do that as a legislator.”
Pascrell doesn’t know why New York didn’t adopt the New Jersey model of relatively low taxes.
“I don’t see how they’ll ever be able to turn a profit in New York and justify massive investment there which is needed to get a system up and running and done in a way that checks all the boxes,” Pascrell said. “Many think it has the potential to be a crown jewel, but when you put a tax rate in like that at its inception, you will see that that will have to be revisited. But tax rates are very hard to revisit either up or down.”
Queens Councilwoman Adrienne Adams is pushing to have Aqueduct become one of the three licensees downstate, according to the New York Post. She gave a December 8 letter to Gaming Commission officials seeking a permit to expand Resorts World slots parlor into a full-fledged casino with live card table games.
“Resorts World has contributed mightily to New York’s economy, creating jobs for local residents, and spurring economic development in the borough of Queens,” Adams wrote.
Resorts World employs more than 1,000 most people of color from Queens. Gaming giant Genting always envisioned expanding to a full-fledged casino when it opened a decade ago.
Meanwhile politicians in Westchester County sent letters to the gaming commission urging them to award a full casino license to the MGM Resorts’ Empire City Casino at Yonkers Raceway, including Westchester County Executive George Latimer and Mayor Mike Spano.
In related news, Rush Street, which owns Schenectady’s Rivers Casino, also wants in.
“We are developers of destination casinos, and we are proud of how we have transformed local communities,” reads part of their presentation, which talks about the contributions they have made to Schenectady and other cities where they have developed casinos including Chicago, Philadelphia and Niagara Falls, Ontario, according to the Albany Times-Union.
One of the respondents, the Water Club, located along the East River in Manhattan, proposes a small, exclusive casino, without slot machines. It would be the kind of place where “maybe the next James Bond can play a hand of poker in New York,” according to their response.
An East River casino proposal comes from Water Club restaurateur Michael “Buzzy” O’Keeffe and would be located next to the floating eatery off East 30th Street, according to the New York Post.
He envisioned table games but no slot machines.
“In the Borough of Manhattan, from river to river, this is the most viable location to place a smaller boutique (Monte Carlo) style casino that is easily expandable,” O’Keeffe wrote in his proposal. “An upscale Monte Carlo style casino on the East Side, Mid-Manhattan, and very visible along the FDR Drive on the East River.”
The casino would be 24,000 square feet and would have a modest 100-car parking lot.
He said 450 feet of “open deep-water pier” could be used to build more gaming facility space or “float in a custom casino.”
“Building on the waterfront is far less expensive than building in Midtown Manhattan. It is the easiest deal for the state and the city to make, as it already exists, and is ready to go,” O’Keeffe said.
“New York, the world’s capital, should have a beautiful and upscale casino (so maybe the next James Bond can play a hand of poker in New York),” he added. “One casino in Manhattan will end up as the hottest casino in the world.”
Rush Street Gaming was among the eight casino operators who tossed their chips into ring in search of one of three downstate casino licenses in New York. The company is also the only one to opt out of redacting much of their proposal so prying eyes can’t tell what’s going on.
The decision to go public with its request to allow the public access provides some positive media publicity. But is begs the question why the other seven didn’t follow suit, according to NY Online Gambling.
The commission itself noted in its statement, “Most redactions reflect requested positions of the submitter about material exempted from public disclosure. The commission has not confirmed that any of those redactions are consistent with the New York Freedom of Information Law.”
Rush Street’s filing, however, does give insight into some of the issues with and talking points around building a downstate casino. Rush Street suggested the state permit more than one casino per area.
“We believe the state should select the three casino locations anywhere in the Downstate area where they generate the most benefit regardless of where they each are located including in the case where more than one facility could be located in the same region,” the proposal says. Elsewhere, it says, “We believe it is prudent for the state to keep an open mind regarding the distribution of licenses Downstate.”
Rush Street provided a specific timeline for the project: four months to respond to the RFA and begin planning; six months for review; 18 months to three years for casino development. That means an opening sometime after 2023. Rush believes its Rivers Casino & Resort in Schenectady should give it an advantage, thanks to the synergy.
MGM Resorts runs the Empire City Casino at Yonkers Raceway. Resorts World has a property at Aqueduct Racetrack in Queens. Another submission, from Suffolk Region Off-Track Betting Corp., would be linked to that company’s Jake’s Casino in Islandia.
The request for information is not a formal presentation, more like guidelines for state executives and legislators.
