Since New York green-lit downstate casinos a year and a half ago, a number of companies have emerged, showing their interest in joining what promises to be a competitive gambling market.
That included Vornado Realty Trust. Now, though, the pool of bidders no longer includes the real estate investment trust.
During a recent Vornado earnings call, CEO Steven Roth noted that it was “highly likely that we will not pursue a casino license.”
Why Vornado won’t pursue a NY casino license
As is typical with Roth, he did not dive into the details of why Vornado will pull out of the race for one of three downstate licenses available, which likely would open the door for licensing once NY online casinos are legalized.
Vornado did report an increase in net income, up to $52.8 million, in the third quarter – well up from the $7.7 million reported in Q3 of 2022. Operation funding, however, saw a $30 million-plus decline to $119.5 million. That dropoff comes in part due to higher interest rates.
This is all to say, as Roth pointed out during the call, that financing for projects has become more and more difficult to land. And developers aren’t as eager to take on new construction.
“Capital is scarce and back-breakingly expensive,” Roth said. “While the circumstances will cause pain in the short term, they lay the foundation for a recovery and fundamentals and values in the future.”
Of note, last year, Vornado decided against any new major construction projects as a result of “economic headwinds.”
Of course, the remaining bidders for downstate licensing all have gaming partners, including some brand-name operators such as Caesars and Bally’s. It is also believed that two of the three licenses will be carved out for existing racinos Empire City Casino and Resorts World NYC. Likely, then, it didn’t seem viable or logical for Vornado to compete with the gaming giants for one remaining license.
Vornado first big name to pull name from downstate NY casino consideration
In January, Vornado expressed an interest in pursuing a downstate casino license. Roth considered building a casino at the site of the recently demolished Hotel Pennsylvania.
One of the city’s largest commercial real estate investment firms, Vornado saw value in building a casino near Madison Square Garden, though there are no reports that the group every secured a gaming partner.
At the time, Vornado said in a statement that the company’s “most important criterion for any project is that it meet the economic development objectives and produce the transit and public improvements set forth in the state’s General Project Plan.”
Vornado also considered building office towers as part of a $7 billion overhaul of Pennsylvania Station. But over the summer, Roth made it known that Vornado would not continue with those plans, which would have helped the state cover some of the costs of the project. In the wake of that decision, Gov. Kathy Hochul said that New York is “decoupling” that station’s improvements from Vornado’s office developments.
Again without providing many details, Roth indicated that the location could host events such as fashion shows, temporary uses that would help monetize the space.