The year is coming to a close. And when 2024 picks up, so, too, will the race for one of three downstate casino licenses in New York.
Why? Well, it’s no secret: Casino gaming around the New York City area is primed to be among the biggest in the world.
“New York,” Howard Glaser put it while appearing on CNBC’s Squawk Box earlier this week, “it’s the holy grail for casino expansion.”
So much so, the global head of government affairs for Light & Wonder said, that New York could compete with – if not outshine – the Las Vegas Strip.
How downstate NY casinos could outperform Las Vegas
When you consider all the factors, the math does begin to add up.
As it was emphasized during the program, the New York City area boasts a population of around 23 million. Another 50 million visitors frequent the area annually.
All of this, Glaser said, creates projected revenue numbers that are “eye-popping.”
“A study New York State itself did said $8 billion a year in potential casino revenue from three casinos,” Glaser said. “To give you some perspective, the Las Vegas Strip produced $8 billion in casino revenue last year.
“Now, you might say, ‘How is it possible that three New York casinos equals the whole Las Vegas Strip?’ You just said it: It’s 23 million people live here, 50 million people visit, and there’s a significant opportunity. Even though it’s a tough competition, the costs are going to be high, casino executives want to be into this market.”
Las Vegas Sands will build something if it doesn’t get a license
Robert Goldstein wants Las Vegas Sands to land one of the three downstate licenses, of course. That said, the company’s bid faces an uphill battle after a court invalidated its 99-year lease agreement to take over Nassau Coliseum.
Still, that has not deterred Sands from its pursuit. And the reason is simple.
“This is a destination resort in New York,” Goldstein told CNBC. “It’s worth all the effort we put in. And we’re very excited about it. It’s a market that can’t be replicated.”
Even without a casino license, Sands still expects to build something on the land. Even if, financially, it doesn’t make sense, which is what Goldstein conceded. However, he added, Sands isn’t securing the space just for a casino.
“We did that or a different reason,” he said. “We did it because we wanted to who this community that we’re committed, short- and long-term.”
Downstate casino revenue could quickly add up
Not everyone holds the same outlook – at least publicly – as Goldstein.
In Queens, Hard Rock International partnered with New York Mets billionaire owner Steve Cohen to develop an $8 billion resort near Citi Field.
Jim Allen, chairman of Hard Rock International, told CNBC that seeing a return on investment without a casino license is “pretty challenging.”
“I think the scope of $8 billion,” Allen said, “cannot be justified unless you are able to maximize the amazing population.”
New York does stands as the “last greatest, untapped market in the world,” Glaser said, with an “estimated $5 billion in gross revenue.”
Around a dozen groups appear willing to pay the $500 million licensing fee to operate a downstate casino in New York, which would likely open the door for NY online casino licensing once the state legalizes the industry. But many expect bidders to pay over $1 billion for a license.
“A billion dollars sounds like a lot of money, because it is a lot of money,” Glaser explained.
“But at $8 billion a year in revenue over the 20-year term of these licenses – plus the other things that go with it, the hotels and the resort amenities – that’s $200 billion over 20 years split between three casinos.”