The first round of questions and answers related to downstate New York casinos provides a glimpse into the thinking of both state gambling regulators and the companies behind the various proposals.
While much of what can be found in the 103-page report released Wednesday by the Gaming Facility Location Board is mundane and procedural, some of the regulator’s responses contained useful nuggets of information.
The state’s answers addressed the timetable for downstate NY casinos (hint: it’s going to be a while), what percentage constitutes ownership in a company (one can only imagine the kind of shady characters who might need something like that clarified), gambling revenue tax rates and the lifespan of a casino license. They also touched on North Jersey casinos and online casinos in NY.
This first round of Q&A gave us a little bit of everything.
State taking its time with downstate NY casinos
But, the initial round of Q&As only inches the ball further down the field. The report’s public release — after nearly seven months of waiting — in no way signifies significant progress by state officials toward actually awarding three casino licenses.
Technically, the 11 reported NY casino proposals have not even submitted applications for downstate licenses. Applications cannot be submitted until 30 days from the GFLB’s response to the second set of questions. The second round of questions from prospective applicants are due Oct. 6.
This is an actual response contained in the Aug. 30 report about how long it may take to get questions answered:
Q.570: In previous RFP’s, the Commission took between two and four weeks to respond to questions. Does the Commission believe it will take a similar amount of time in this process?
A.570: Obviously, no.
Seeing as how there is ample time between now and the next step in the casino licensing process, PlayNY selected a handful of questions and answers that, at first glance, appear relevant.
Admittedly, we may have skimmed past a pertinent passage here and there. But, there were 613 (officially, although there are some duplicates) submitted questions and responses to go through. And, as noted, there is plenty of time to get to all of it.
A handful of abbreviations pop up frequently in the Q&A document. They are:
- RFA: Request for Applications
- GFLB: Gaming Facility Location Board (or the Board)
- CAC: Community Advisory Committee
- NYSGC: New York State Gaming Commission (or the Commission)
Questions pertaining to Empire City Casino Resorts World NYC
One of the biggest talking points surrounding the three available NY casino licenses is that two racinos already in the designated downstate area are shoo-ins to become full-fledged casinos.
While it may be considered efficient to approve Empire City Casino and Resorts World NYC as class III gambling parlors, the Board is taking a more deliberate approach.
Q.247: What factors will the GFLB use to evaluate different applications proposing a conversion of an existing video lottery gaming facility or proposing new facility construction?
A.247: The statute details the factors and weight to be used for consideration. The same factors will be applied to both proposed conversions and new facilities.
More details (kind of) about Community Advisory Committees
Another talking point that is of great concern to gambling corporations and developers is the role of the Community Advisory Committees. By law, any of the casino applications must go before a local and appointed CAC.
So, for example, a casino bid in Manhattan will be reviewed by a different CAC than a bid in Nassau County.
But, there seems to be little information as to how much influence these CACs will ultimately have. The answer to the following question was repeated multiple times for other CAC inquiries.
Q.66: Will the CAC be subject to time limitations to undertake their work or will it be open-ended?
A.66: Further guidance concerning the CAC process will be issued.
As for when that “guidance” will be given? Some variation of the following question was asked on eight separate occasions. Each time, the same answer was provided: “The timing of the CAC guidance issuance has not yet been determined.”
Applicants will need to receive local zoning approval
Similarly, local zoning laws are of grave importance in the process.
Just how important are local zoning ordinances to these possible multi-billion-dollar projects? Turns out, an application won’t even be considered by state officials if the local community does not sign off on it.
As state regulators emphasized: “Zoning and CAC approvals are prerequisites to GFLB evaluation.” Even if an applicant receives CAC approval.
“Applicants should pursue zoning approval in parallel with the RFA and CAC processes and provide evidence of compliance with zoning and CAC requirements prior to GFLB consideration.”
What about the tax rate on these NY casinos?
Now, let’s get to what all of this is really about — money. These three potential downstate NY casino projects all involve lots and lots of money.
From the state’s perspective, casino gambling revenue equals one thing: more taxes. But, right now, no one knows how much Albany lawmakers will get their hands on because there are no tax rates set. When will those rates be set? Easy bet that it doesn’t happen before the new year.
Q.250: When will the GFLB establish the taxation rate?
A.250: The Commission will set the final tax rate, as set forth in PML §1351(1-a) following a recommendation from the GFLB after review of Supplement Return Date materials.
This one also stood out and probably needs some clarification from state gambling regulators. Because, as written, it sounds like the state could give a favorable rate to one operator while imposing an unfavorable rate on another. Which, on the surface, seems rather arbitrary.
Q.251: Will the GFLB impose tax rates for each individual successful Applicant or will one tax rate be established?
A.251: The Commission will set the final tax rate, as set forth in PML §1351(1-a). The statute contemplates the possibility of different tax rates for different gaming facility licenses.
This next question is both comical and curious. It seems to be asking the state of New York “Hey, if we were to sweeten the pot, would that be okay?” Not sure if any NY politician – let alone anyone, anywhere – would say no to that.
Q.395: Will the GFLB allow for discrete license fees by successful Applicants?
A.395: Yes, an applicant may bid a higher licensing fee above the $500 million minimum.
Applicants will submit market and revenue studies
All of the casino applicants are required to include two studies with their bids: a market study and a revenue study. Simply put:
A.573: The Market Study is where Applicant plans on drawing its customers from, while the Revenue Study details the revenue derived from such customers.
We will dive into the revenue studies at a later time because that is sure to be an interesting exercise for the applicants. For now, the market studies are far more noteworthy to those in the industry. People in the gambling industry beyond the Empire State are paying close (very, very close) attention to these two Q&As.
Q.445: Is the market study expected to take into consideration the possibility of expanded gaming in Northern New Jersey?
A.445: The Applicant needs to make assumptions of the likely size and impacts of other potential competition.
Q.463: What assumptions should the market studies make regarding online gaming in the state of New York?
A.463: When preparing its response, the Applicant should assume the current landscape of legalized gambling in New York.
There is still much to be learned from the first set of Q&A released this week by the GFLB. PlayNY will continue to examine this report and provide updates, analysis and reporting as necessary.