The best that can be said about Staten Island as a location for one of the three casino licenses in the New York City area is that it hasn’t been ruled out. It’s also not been ruled out that Martians will visit our planet in the not-too-distant future. Brooklyn, the Bronx and Manhattan haven’t been ruled out either, although the latter gets a lot of chatter for and against a casino.
Queens will probably get one of the three licenses because the borough is so far ahead of the game with its existing casino, Resorts World Queens at Aqueduct Racetrack. MGM Empire City Casino at Yonkers Raceway in Westchester County expects to gobble up a license for the same reason. The two racinos have slot-style games and ancillary amenities, with gross gaming revenues among the highest in the U.S. The only missing piece is the table games, and a full license brings that to the party.
Yes, each will cough up at least $500 million to the state for a license. But they get to pay less of their slot income to the state under the new license. They just have to pay a tax on table game income, too.
Let’s not forget Atlantic City, which Fitch Ratings says will feel most of the pain from New York casinos.
For those of you just entering the casino sweepstakes as an interested observer, let’s bring you up to speed on all this.
In 2013, the state of New York approved seven commercial casino licenses, four of them upstate. The other three, appropriately called downstate, were held back from consideration until 2023 to provide enough time to let the upstate casinos get a foothold.
Faced with deficits resulting from the coronavirus pandemic, lawmakers with the support of Governor Kathy Hochul, agreed to amp up the time frame to award downstate licenses to 2022, this year. She also canceled the penalties future downstate operators would have to pay to the upstate casino owners if they moved forward before the ban expired. Keep that in mind when it comes to lawsuits.
New York just approved a $220 billion budget that incorporates the three downstate casino licenses and what they will pay towards the budget. The New York Gaming Commission will oversee the license bidding, according to the New York Daily News. A community advisory committee will give its input as to locations.
“We’re looking more toward conversion: if you can convert an existing facility to a full-fledged casino, then that would be acceptable,” Assembly Racing and Wagering Chair Gary Pretlow said. “So if we can do a conversion, then it’s a slam dunk for Genting and MGM.”
Robert DeSalvio, the president of Genting Americas East, which operates Resorts World Queens, said the company will bring Las Vegas-style gambling to an already successful location.
“We welcome the opportunity to work with the state and local stakeholders on this important leap forward,” he said. “We are ready, willing and able to immediately double our workforce by adding more than 1,000 new union jobs and help the true potential of resort-style gaming, entertainment and hospitality right here in the heart of Queens.”
The third license is up for grabs.
“Following the budget, the legislature must monitor the timely, fair and transparent bidding process for the licenses, and ensure that the siting process is being credibly implemented,” said State Senator Joseph Addabbo.
New York City Mayor Eric Adams would like his metropolis to get two of the three. Resort World in Queens is one of them. This is where Staten Island comes in. Or doesn’t. According to the Advance/SILive, Staten Island has not been ruled out.
Some officials representing parts of Manhattan have made it clear they do not want their borough to be chosen, Politico reported.
“I just want to make sure that they cannot bigfoot any specific neighborhood to take a casino that they don’t wish to have there,” Senate Finance Chair Liz Krueger said.
According to NBC New York, some of the Manhattan locations that have been suggested include the Water Club in Kips Bay, on top of Saks Fifth Avenue in midtown and Time Square.
As noted by CDC Gaming Reports, the gaming tax rate—nominally 25 percent for slot revenues and 10 percent from table games—has not been finalized, nor has minimum capital-investment requirements.
CBRE analysts peg revenue at $1.3 billion a year for MGM Empire City and $1.5 billion annually for Resorts World, once the two complete their conversions. Not only are both operators deemed sufficiently liquid to shell out $500 million for a license, they would additionally benefit from the new, lower, taxation regime, as they’re currently paying out 60 percent of gross gaming revenue to New York state.
“It’s the most popular hypothetical,” Addabbo said of the two racinos. “People don’t want a lot of new gaming sites.”
New York City’s economic recovery cannot be about going back to the way things were, Adams said.
“We are going to rebuild, renew and reinvent our city, and accelerating and expanding gaming options within the five boroughs is the quickest way to make that happen,” he explained. “While the gaming commission will decide on where these casinos will be located, creating new gaming options in New York City will create thousands of good-paying jobs in hospitality, tech, security, construction and countless other industries, while simultaneously spurring billions in economic activity for our city and state.”
