What Details Need To Be Ironed Out For Downstate New York Casino Licenses

Written By Mike Mazzeo on April 1, 2022 - Last Updated on July 13, 2022
new york state budget final details

Other key issues, including bail reform, are holding up the final state budget, which will likely go beyond Friday’s deadline. But as far as the New York gaming front is concerned, hope remains that — barring any last-minute setbacks — the three NY downstate casino licenses will be included. 

“I’m still extremely positive and optimistic that it’s in the budget,” Sen. Joe Addabbo told PlayNY.

However, a few details still need to be decided. Among them: 

1. Downstate NY casino licensing fees

The Senate’s one-house budget proposal called for a minimum of a $1 billion fee per license. That rankled some in the industry with a vested interest in securing a coveted license.

By comparison, the state-commissioned Spectrum Gaming Group study calls for a minimum of $500 million per license. Market access in the downstate region is extremely valuable. It’s possible that, following a competitive bidding process, the licensing fee winds up in the $750 million range. 

That would bring somewhere around $2 billion-$3 billion to the state. Whatever the final number, Addabbo would like to see the licensing fees realized for New York in the upcoming fiscal year. Addabbo said:

“It’s a two-step process (who gets the licenses and where they’re sited). But I’m hoping that the process can be decided by April 2023 so that we can recognize that money and then the jobs and educational funding and addiction funding that comes with it.” 

The minimum tax on slots in the Senate one-house proposal was 45%. That’s higher than the slot tax charged to the upstate casinos (two pay 30%, two pay 37%). 

2. Local control and community input

An oversight committee — that could include local policymakers and community leaders — could be implemented to direct the process of selecting a location. The assembly has said voting should be required to be unanimous. Others have argued for a two-thirds or simple majority vote.  

Assemb. Gary Pretlow told PlayNY:

“If the sticking point becomes the oversight of the location board — the number of members, how many votes to accept the location — we didn’t spell all of that out. We just talked about what local control should look like. Now they have to decide does one person kill it or does a majority.”

One of the reasons for optimism is that local policymakers who have been historically opposed to an NYC casino have reconsidered their positions. Mayor Eric Adams said he’d like to see two of the three downstate licenses in NYC. The assembly has also been talking about it after not including the downstate licenses in its one-house budget proposal. 

3. Process and timeline deadlines

Including deadlines, as was the case with the competitive bidding process for operators to secure an online sports betting license, would give the NYS Gaming Commission (NYSGC) a framework to get everything completed. As pertaining to OSB, the NYSGC came up with the finer details of the scoring system breakdown that was used to determine the winners. So it would make sense that a similar system is implemented for the downstate casinos. 

The hope would be that the competitive bidding process would be completed by the end of 2022. That would include a framework of the NYSGC taking applications/bids, an evaluation period, and then awarding them by Dec. 31. 

A popular iteration that has local support would be for existing video lottery terminals (VLTs) Resorts World NYC (Queens) and MGM Empire City (Yonkers) to become full-scale casinos. If they receive licenses, Resorts World could be months away, while Empire City (which needs more upgrades) could potentially be ready within a year. Under that plan, the racetracks would still need to be taken care of financially as per the existing VLT agreement. 

The third license would likely be a new construction project that could take three to four more years, including siting, going through the local process, and then groundbreaking to ribbon-cutting. 

The expansion of New York online sports betting (minority inclusion) seems unlikely to make it into the budget.

The fiscal impact of reducing the 51% tax rate after adding additional skins wouldn’t make financial sense for the state, which has already made a staggering $153.3 million in tax revenues from online sports betting. It’s something Addabbo and Pretlow will likely turn their focus to post-budget before the session ends in June. 

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Mike Mazzeo

Mike Mazzeo is a contributing writer for PlayNY, reporting on legal sports betting in New York while covering the potential legalization of NY online casinos and poker. He previously wrote for ESPN, the New York Daily News and The Ringer, among others.

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