A bill in the New York State Senate was amended Tuesday to outline selection criteria for the three downstate casino licenses, while stating that the New York State Gaming Commission will determine the tax rate following a competitive bidding process.
Sen. Joe Addabbo said in January that the expedition of the three downstate NY casino licenses has the potential to bring in $1.5 billion in revenue for the state, additional education funding and improvements to problem gambling programs.
Selection criteria for downstate NY casinos
According to Senate Bill 8009, applicants will be selected based on a number of factors including, in part:
- Realizing maximum capital investment exclusive of land acquisition and infrastructure improvements
- Maximizing revenues received by the state and localities
- Providing the highest number of quality jobs in the gaming facility
- Offering a reasonable and feasible construction schedule to completion of the full gaming facility
- Demonstrating the ability to fully finance the gaming facility
- Carefully considering local views and consulting with appropriate local governments
Existing video lottery terminals (VLTs) Resorts World NYC (Aqueduct) and MGM Empire City (Yonkers) have received significant backing from local policymakers to become full-fledged casinos. Certainly, those properties remain attractive due to speed to market.
What about out-of-state casino companies?
Several other casino corporations have also expressed interest. Hard Rock chairperson Jim Allen recently told the Associated Press that the corporation has three potential sites on which it could build a casino in New York City but declined to divulge specifics. But Caesars’ CEO Tom Reeg said it’s unlikely his corporation enters the fray.
“New York, how do I answer this politely — New York is a difficult regulatory state. I think it’s going to be extremely expensive to build there. I think it’s going to be an extremely expensive license fee. And I think there’s a likelihood that you’re going to have to solve some other problem for the city in addition to creating the jobs that you do in building a casino,” Reeg said.
“So it’s not going to be enough to pick a site, build a casino, create the jobs and generate a return. There’s going to have to be other investment there as well. So I would say on our balance sheet it’s extraordinary unlikely that we make a material investment into New York land-based.”
More casinos could lead to lowered NY sports betting tax
The Empire State has already benefited greatly from the 51% tax rate waged on mobile sportsbooks in New York. From Jan. 8 to Feb. 13, the state received a staggering $78.5 million in taxes. But it remains unclear whether operators can become profitable at that rate — the highest in the country — long-term.
Nevertheless, Assemblyman Gary Pretlow has introduced a bill that would prohibit NY online sports betting operators from asking for a tax rate reduction. Pretlow has said he wants to make sure that operators can’t try to change the tax rate. Casinos did it before, lowering the rate from 37% to 30%).
“I’ve been experiencing this whole bait-and-switch for too long, and I’m tired of it,” Pretlow said. “I always say, if you make your bed, you lie in it.”
Based on the NY matrix, one way to potentially reduce the tax rate would be to add four more operators. Going from nine to 13 sportsbooks would allow the rate to drop from 51% to 35%.