State officials have finalized the New York State budget for fiscal year 2024. And it will direct the initial money earned from the three available downstate casino licenses to help fund the Metropolitan Transportation Authority (MTA).
Once the New York State Gaming Commission (NYSGC) determines which three NY casinos applicants will be chosen to move forward with their projects, each must pay a $500 million licensing fee and a minimum $500 million investment.
All $1.5 billion made from licenses will go to MTA funding, along with a share of an estimated $231 million to $413 million in incremental annual tax revenue.
Had the MTA failed to receive funding, officials warned of cutting down subway, bus and commuter railroad services. So getting the much-needed cash is a positive, but the MTA won’t receive the cash anytime soon.
Now, the question is when will the MTA actually receive the money from licensing fees?
NYSGC downstate casino licensing timeline is unclear
The NYSGC hasn’t set any firm deadlines for when each part of the casino license bidding process will be completed, one of several questions raised by Wall Street investors.
But earlier this month in a Q1 earnings call, MGM Resorts International CEO and president William Hornbuckle shared his expected timeline, which shed some light regarding how things appear from an applicant’s point of view.
“On the development front, we are working through the RFA process in New York,” Hornbuckle said.
“We plan to submit our official application in this summer and hope to receive a response by the first half of next year. We continue to expect total spend in New York to be approximately $2 billion, inclusive of the licensing fee.”
Majority of MTA funding not expected until 2026
Sen. Joe Addabbo, who also serves as chairman of the Committee on Racing, Gaming and Wagering, isn’t a fan of Gov. Kathy Hochul’s plan to direct funding to the MTA. The main reason being that the MTA won’t see the cash until 2026 because of the lengthy road ahead regarding the casino licensing process.
Addabbo is a major proponent of legalizing New York online casinos, and views that as a stream of new revenue that can be received quicker.
“But I will offer a counterproposal to the governor: We can give her more significant money in a quicker timeframe than 2026, and it’s unspoken for money because it’s a new product, and that’s iGaming,” Addabbo told PlayNY.
“So we’re not shifting it from education. In the bill it says education, but it’s a placeholder. This is new revenues. So you want to use it for healthcare, you want to use it for social services, you want to use part of it for the MTA? Here it is.”
Addabbo also disagrees with the FY2024 budget because NY currently sends gaming tax revenue to the state’s education system. And the senator doesn’t want to see funding taken from the schools.
An update on the downstate casino licensing process
We remain in the early phases of the license bidding process, with very little progress made in recent months.
The Gaming Facility Location Board (GFLB) will eventually choose the three casino applicants best suited to enact their proposals. But ultimately, the NYSGC will have final say regarding which groups win the licenses.
An early step in the process included any parties interested in acquiring a license to forward the questions they have to the GFLB. A March 2 update on the NYSGC website says staff members are currently reviewing questions and drafting responses.
The NYSGC previously posted that the board would post responses to the groups’ questions by late March. Two months after that timeline, answers have yet to emerge. And the GFLB has not provided an updated timetable for responses.
If this is an indicator of how the downstate casino licensing process will go, this undertaking will be long and drawn out.