There are two weeks remaining before the final New York State budget is due.
And there are two gaming items — downstate casino licenses and minority/online sports betting expansion — that are generating momentum prior to the April 1 deadline.
“We’re looking at New York being perceived differently as a gaming destination,” Sen. Joe Addabbo said Friday.
Still, there are hurdles to overcome as budget negotiations start to ratchet up.
Obstacles remain before finalization of NY state budget
The potential $1 billion licensing fee and 45% tax rate on slots for the three downstate casino licenses in the Senate one-house budget proposal caused a stir in the industry.
Addabbo, though, urged everyone to “relax.”
“Let the process dictate the value,” he said.
Market access is extremely valuable in New York, meaning three entities could conceivably give the state 10 figures each for a coveted license. Alternatively, the fee could settle somewhere between $1 billion and the $500 million estimated by Spectrum in the state-commissioned study from January 2021. It’s also conceivable that — like with the upstate casinos — the tax rate is different depending on location. Tioga Downs and del Lago pay 37% on slots, for example, while Rivers and Resorts World pay 30%.
At this point, everything is still TBD. Gov. Kathy Hochul included the downstate casino licenses in her January proposal, but the Assembly rejected it outright.
There are also potential siting issues. Existing video lottery terminals (VLTs) Resorts World NYC and MGM Empire City will have to go through the competitive process just like everyone else, but could have the inside track given speed to market. Manhattan is certainly a hotspot for new construction. But there is expected to be significant opposition on that front. Local input will be crucial.
“I think it’s something we can address,” Addabbo said.
Could NY sports betting expand? What about NY online casinos?
As far as minority/online sports betting operator expansion goes, the 51% tax rate is still the biggest concern. The Senate one-house budget proposal didn’t include a reduction.
“Does the expansion equate to a reduction in the tax rate? And if it does and there’s a reduction in educational funds, then forget it,” Addabbo said. “We’re not going to do it because why would we do that? Our version does not reduce the tax rate. Let’s have the analysts look at this. I think it’s a great way to start the conversation. That’s what the next two weeks are for. Let’s see.”
Expansion of online NY sports betting in the form of fixed-odds horse racing and NASCAR on the apps might have to turn into standalone post-budget legislation prior to session ending in June. The same goes for kiosks being placed at stadiums, arenas and racetracks. As for New York online casinos, that topic may have to become a featured item for next year’s budget.
“Our role is to keep making this product more competitive and better for New Yorkers,” Addabbo said. “I love the fact that we’re already thinking about how to improve an online sports betting product that’s already successful, and we’re only 2 1/2 months in.”
