New York City is gearing up for a high-stakes competition as several casino developers vie for one of the three downstate casino licenses that will be awarded by the state in 2024. The city, which is home to more than 8 million people and millions of tourists every year, is seen as a lucrative market for the gaming industry, but also a challenging one due to the complex regulatory and political landscape.
The State of Play
The state legislature authorized up to seven casinos in New York in 2013, with four upstate licenses granted in 2014 and three downstate licenses to be issued no earlier than 2023. However, the COVID-19 pandemic and the resulting budget crisis prompted Governor Kathy Hochul and lawmakers to expedite the process and allow the downstate licenses to be awarded in 2024, with a minimum bid of $500 million each.
The downstate licenses are expected to generate significant revenue for the state, which will use 75% of the license fees for education funding and 25% for local aid. The casinos will also pay a tax rate of 10% on table games and 25% on slot machines, which is higher than the upstate casinos.
The downstate region includes New York City and its surrounding counties of Nassau, Suffolk, Westchester, Rockland, Putnam, and Orange. However, the city is the most coveted location for the casino developers, as it offers the largest and most diverse customer base, as well as the potential to attract international visitors.
The Contenders
As of January 2024, there have been 11 casino proposals announced in some form, including the following locations:
- Five in Manhattan (Midtown, Hudson Yards, Penn Station, Times Square, and adjacent to the United Nations building)
- One in the Bronx (Throgs Neck)
- Two in Queens (Willets Point and Ozone Park)
- One in Brooklyn (Coney Island)
- Two outside the city (Yonkers and Belmont Park)
Some of the developers that are currently eyeing the new licenses include:
- Resorts World New York City in Queens, owned by Genting Group, which operates the largest and most profitable casino in the state at the Aqueduct Racetrack and plans to expand its facilities and offerings.
- Empire City Casino in Yonkers, owned by MGM Resorts International, which runs the second-largest casino in the state at the Yonkers Raceway and hopes to transform it into a full-scale resort with a hotel, entertainment, and dining options.
- Related Companies and Wynn Resorts, which have partnered to propose a casino at Hudson Yards, the massive mixed-use development on the west side of Manhattan that features luxury apartments, office towers, retail, and cultural venues.
- Hudson’s Bay, Saks Fifth Avenue, and Mohegan Gaming & Entertainment, which have teamed up to propose a casino at the flagship Saks Fifth Avenue store on Fifth Avenue, which would be converted into a gaming and entertainment destination with a hotel, spa, and rooftop pool.
- Vornado Realty Trust and Caesars Entertainment, which have joined forces to propose a casino at Penn Station, the busiest transit hub in the country that is undergoing a major renovation and expansion project.
- SL Green Realty Corp. and Hard Rock International, which have collaborated to propose a casino at 1568 Broadway, a prime location in Times Square that is being redeveloped into a mixed-use tower with a hotel, retail, and entertainment space.
- The Soloviev Group and Bally’s Corporation, which have formed a partnership to propose a casino at the Water Club, a luxury hotel on the East River near the United Nations headquarters, which would be rebranded as Bally’s on the Water and feature a rooftop casino, restaurant, and lounge.
- Steven Cohen, the billionaire owner of the New York Mets, and Rush Street Gaming, which have proposed a casino at Willets Point, the site of a long-delayed redevelopment project near Citi Field that would include a hotel, retail, and entertainment complex.
- Hard Rock International and RXR Realty, which have proposed a casino at the Peninsula Hospital site in Throgs Neck, the Bronx, which would be redeveloped into a waterfront resort with a hotel, marina, and concert venue.
- Las Vegas Sands Corp. and Madison Square Garden Entertainment Corp., which have proposed a casino at Belmont Park, the historic racetrack in Nassau County that is also the site of a new arena for the New York Islanders hockey team and a mixed-use development.
- Wynn Resorts and Brooklyn Sports & Entertainment, which have proposed a casino at Coney Island, the iconic amusement district in Brooklyn that would be revitalized with a hotel, entertainment, and dining options.
The Challenges
While the casino developers are eager to enter the New York City market, they also face several challenges and uncertainties that could affect their chances of winning a license. Some of these include:
- The competition: With 11 proposals and only one license likely to be granted in the city, the developers will have to convince the state that their project is the most beneficial for the public interest, the local community, and the gaming industry. They will also have to outbid their rivals and offer the highest license fee and tax rate to the state.
- The regulation: The state gaming commission, which is responsible for issuing the licenses, has not yet released the criteria and timeline for the selection process, leaving the developers in the dark about the exact requirements and expectations. The commission is also expected to conduct a thorough review of the proposals, including their financial viability, environmental impact, social responsibility, and compliance with the law.
- The politics: The casino projects will also have to navigate the complex and often contentious political landscape of the city, which involves multiple stakeholders and interests, such as the governor, the mayor, the state legislators, the city council members, the community boards, the labor unions, the business groups, the advocacy organizations, and the residents. The developers will have to secure the support and approval of these parties, or at least avoid their opposition, to advance their proposals.
- The public opinion: The casino projects will also have to win over the public opinion, which may be divided or skeptical about the benefits and costs of having a casino in the city. The developers will have to address the potential issues and concerns that the public may have, such as the impact on traffic, crime, gambling addiction, quality of life, and local businesses. They will also have to highlight the positive aspects of their projects, such as the job creation, revenue generation, tourism attraction, and community investment.
The Future
The casino race in New York City is expected to heat up in the coming months as the developers finalize and submit their proposals to the state gaming commission, which will then evaluate and select the winners by the end of 2024. The casino projects are expected to take several years to complete and open, depending on the size and scope of the development and the regulatory and legal hurdles they may face. The casino industry is also expected to evolve and adapt to the changing market conditions and customer preferences, as well as the competition from other states and online platforms. The casino race in New York City is not only a gamble for the developers, but also for the state, the city, and the public, who will have to weigh the risks and rewards of having a casino in their backyard.
