An extensive report on the future of gaming in New York state suggests the powers that be in Albany would do well to act sooner rather than later to license casinos in New York City.
The long-awaited report, prepared by Spectrum Gaming Group under contract with the New York Gaming Commission, warns that a new full-scale casino in New Jersey is a distinct possibility, and its likely location in the Meadowlands Sports Complex in East Rutherford—less than a half-hour drive from the New York City—could pose a threat to the three licenses New York is authorized to award in 2023 in and around the Big Apple.
“In such an environment it is important that the state’s new gaming policies consider how licensing, tax rates and other regulations will impact the ability of downstate gaming to remain competitive with a future Meadowlands casino,” the report states.
The Covid-19 pandemic has battered New York’s finances and spurred a growing movement in the Legislature to speed up the downstate timetable, a move the report appears to support.
“Owners/operators/developers associated with both the Meadowlands complex and Liberty National Golf Club in Jersey City are ongoing proponents of casinos at those locations,” it states. “Being first to market would allow a casino on the New Jersey side to develop player loyalty.”
The report examines a number of scenarios for the downstate licenses, the likeliest being the addition of live table games and house-banked slot machines to the market’s existing racinos: Empire City at Yonkers Raceway, owned and operated by MGM Resorts International, and Resorts World New York City, located at Aqueduct racetrack in Queens and owned by a U.S. subsidiary of Malaysian resort conglomerate Genting.
There has been much talk of placing the third license in midtown Manhattan, a proposal that has attracted influential supporters and equally powerful opponents.
Spectrum estimates the gaming revenue potential at around $1.3 billion annually with little variation regardless of where the third license ends up, and less than half that, incrementally speaking, factoring out the dollars that would have gone to the two racinos as they currently exist.
The report projects the cost of a Meadowlands casino to New York state’s annual tax revenue to be $90 million to $130 million, while its potential negative impact on gaming revenues would vary depending on location, minus-3 percent at Jake’s 58 slots venue on Long Island, 8 percent at Resorts World Catskills, 12.5 percent for a Manhattan casino, minus-20 percent at a slots venue Resorts World plans to develop in Orange County.
The case for speeding up the downstate license awards include an immediate boost to the state treasury of as much as $1.5 billion, based on a widely discussed $500 million one-time fee for each license. That’s not counting a prospective tax rate on slot machines of up to 40 percent and 10 percent on table games.
But whatever direction the state takes, the report urges lawmakers and the administration of Governor Andrew Cuomo to proceed with due deliberation.
“The addition of a commercial casino in the New York City area, either through issuing commercial licenses to one or both VLT facilities in the region or by approving a new property, would profoundly alter the gaming landscape in New York, and arguably throughout the nation,” it says.
“Policymakers need to ensure that whatever gets authorized in the nation’s largest metropolitan area will serve the interest of New Yorkers for decades to come. Whatever entities are granted the privilege of commercial casino licensure in that market, whether they are existing VLT operators or new entrants, must rise to the challenge of developing projects that are iconic, that are sufficiently capitalized to capture and expand multiple market segments and that advance public policies that will serve the entire state.”
The report ignores, however, a 2018 advisory referendum where New Jersey voters rejected a Meadowlands casino by more than 70 percent of the vote. The casino would require a constitutional amendment that must be approved by state voters that would allow gaming to expand outside of Atlantic City, which was approved in 1976 as an amendment to the state constitution.
