The mayor of New York City wants to see a pair of casinos in The Big Apple.
“We would love to have two in New York City,” Eric Adams told reporters Wednesday.
State policymakers are trying to expedite the authorization of three downstate casino licenses from 2023 to 2022 as the April 1 budget deadline nears.
Negotiations are ongoing — and NY politics can prove unpredictable at times. However, there is optimism that the expedited casino licenses could be in the final state budget, industry sources told PlayNY. And the public backing by Adams only supports that optimism.
“Finer details are being worked on, but it’s still in play,” Sen. Joe Addabbo told PlayNY earlier this week.
A cautiously optimistic Addabbo later told PlayNY Wednesday afternoon: “It looks like the talks are progressing well. … It would be a great step.”
Optimism remains for state budget to include downstate NY casinos
It’s worth noting that the downstate licenses were in Gov. Kathy Hochul’s original budget proposal, as well as the Senate one-house budget proposal. However, they were rejected outright in the Assembly.
The Senate one-house budget proposal called for a minimum of $1 billion in licensing fees and a minimum of 45% tax on slots. Those figures were met with ire from some with a vested interest in obtaining a license. But NYC is an extremely lucrative casino market. And the competitive bidding process for those three licenses only figures to ramp up. So the state might ultimately be able to get its desired sums, which have yet to be finalized.
Existing video lottery terminals (VLTs) Genting-owned Resorts World NYC and MGM Empire City have garnered significant local support to be awarded full casino licenses. They have a key advantage in speed to market. But to avoid any calls of favoritism, they will still have to go through the competitive bidding process like everyone else.
Lobbying efforts are well underway, with gambling companies spending around $300,000 per month, as reported by the New York Times. Spending money and gaining political influence stands, as usual, at the forefront. And that stands to benefit the most powerful entities.
Who else could bid for downstate casino licensing?
Las Vegas Sands, Hard Rock and Bally’s have all been aggressive in trying to find their way into the marketplace. All are thought to be willing to pay a premium for that right.
Las Vegas Sands
The Times reported that Adams’ chief of staff Frank Carone met recently with Las Vegas Sands CEO Robert Goldstein. Late last year, Las Vegas Sands had talks with Mets’ owner Steve Cohen about the possibility of a casino going next to Citi Field. And Cohen gave $1.5 million to the political action committee backing Adams’ mayoral bid.
But that Queens location could face significant local opposition. And the Times noted that Adams’ aides have spoken with other casino operators as well.
The Times also reported that Hard Rock could have ambitions of building a casino in Times Square. But any such casino ambitions in Manhattan would also face significant opposition from local council members. Other possibilities mentioned included a “Monaco-style casino atop Saks Fifth Avenue” and “a gambling den with East River views.”
Other possibilities that were at least kicked around by developers, sources said, included a casino on Governor’s Island (where customers could take the ferry) and stationing a luxury cruise liner on the West Side.
Bally’s CEO Soo Kim, however, told the Times that his company has ruled out Manhattan. And given that Bally’s and Genting are sharing a lobbyist, according to the Times, it’s possible that Queens might be off the table too. After all, the two companies likely wouldn’t want to compete with one another for customers in the same area. That could mean Suffolk/Nassau County as a potential site for Bally’s.
Pros and cons of downstate casinos in New York
Downstate casino licenses would bring jobs and revenue to the state in the form of educational funding. But opponents say they would also bring added traffic, crime and addiction. The competition will be about economic value, but local support could provide the smoothest path for a bidder.
The process to ultimately award licenses — should they be expedited as part of the budget — is expected to take several months. Sources speculated that if Resorts World and Empire City were granted licenses, the soonest they could begin conversion to full casinos would be in the first quarter of 2023.
The third casino could then take two to four years to build, giving Resorts World and Empire City an advantageous head start.
Downstate casinos would help the push for legal online casinos in New York, because it would put more stakeholders in the state. Brick-and-mortar casinos and NY online casinos have been able to co-exist without any negative financial impact elsewhere, such as nearby New Jersey. Online casino gaming is expected to be a featured item in next year’s budget.