New York Casino Race Shifts Into Top Gear Ahead of December Deadline

The Gaming Facility Location Board in NY is working on its recommendations for the downstate casino licences, and it has entered a critical phase. There were four community advisory committee-approved entries in the race. But that was narrowed down to just three when MGM Resorts pulled out. There are just three commercial licenses up for grabs, but this doesn’t guarantee that the three entries will receive one license apiece. Now, the board has to analyze the details of the tenders, weighing up the public benefits and frameworks for the operation of each of the casino tenders.

On the end of the operators, there are also questions as to the issues in the NYC potential market. The costs of such projects, the battle of the casino tax rates and license fees, and just how lucrative the market may be is of utmost importance in these next phases. There is still time for any of the remaining three entries to exit the race, and even for the GFLB to turn down their applications. We are expecting more twists and turns right up to the December 1 deadline.

MGM Resorts Withdraws

MGM Resorts’ decision to withdraw from the downstate New York Casino race was a surprise to all. MGM Empire City and Resorts World got the preliminary approvals before the others in the race. The Coney, Freedom Plaza and Avenir were all shot down by the community advisory committees.

Perhaps the most controversial and hyped of those was Caesars Times Square, a partnership between SL Green and Jay-Z’s Roc Nation, which proposed to build a casino in the middle of Times Square. It was fiercely opposed by locals, and this was backed up when push came to shove and the community advisory committees examined the tender.

Pressing Issues and Concerns for Bidders

The proposal set forth by MGM Resorts was nowhere near as ambitious, with plans to expand the already existing Empire City racino in Yonkers. It would have set back MGM Resorts a cool $2.3 billion. MGM Resorts announced the withdrawal, citing a potentially challenging market. Having 4 proposals in such proximity to each other could dampen the potential returns of the project. On top of that, MGM Resorts was eyeing a 30 year casino license for its Empire City Casino, but given the guidance issued by the state of NY, it looked as though they could only qualify for a 15 year license.

MGM Ceo Bill Hornbuckle hinted at some of these new guidelines at the BofA conference. He stated that a note in the deal suggested that the length of the license would correspond with how much the bidders spent on construction.

“If you spend under $1.5 billion, you only get a 10-year license. If you spend, I think it’s over $5 billion, you get a 20 year license.”

Controversial to say the least. MGM was the third entry to voluntarily exit the race, after Las Vegas Sands (April), and Wynn Resorts (May). The MGM Resorts project was highly received by the CAC, receiving a vote of 6-0, and was seen as one of the more practical tenders.

Tender Criteria to Consider

The GFLB does not have the final say over issuing the licenses; that is the responsibility of the New York State Gaming Commission, or NYSGC. Instead, the board has to narrow down the options and put its recommendations to the NYSGC, which will ultimately decide who to give the three valuable downstate NYC licenses to. The Gaming Facility Location Board must factor in numerous conditions into the recommendations; they have to be beneficial to the city.

The three casino license applications are scored and reviewed by the board. They have to meet the minimum financial thresholds, and the GFLB has to examine the framework and financial plans for each tender. Then, when they proceed to the NYSGC, the gaming commission will set the license fees, determine the tax rates, and make the necessary compliance standards and obligations. The GFLB has to weigh up numerous factors into their recommendations, and these are scored in the following way:

• Economic impact and job creation (70%): This is the most heavily weighted category, assessing how many jobs, tax revenues, and long-term economic benefits the project will bring to the region
• Local siting and community support (10%): Evaluates whether the proposed casino has backing from local authorities, community boards, and whether it fits the area’s zoning and infrastructure
• Workforce development and diversity (10%): Focuses on how the operator plans to train, hire, and promote a diverse local workforce, including commitments to fair wages and equal opportunities
• Public benefit and sustainability commitments (10%): Looks at the broader social and environmental impact, including sustainability measures, public infrastructure upgrades, and community reinvestment plans

Who Are the Remaining Three Bidders

As mentioned before, there is a chance that all three proposals get the green light and snap up their casino licenses. But there is a chance that only 1 or 2 get recommended by the December 1 deadline. If any of the proposals do not fit the bill by then, it doesn’t necessarily spell the end of the projects. Before, when the New York State casino tender was made in 2014-15, only three casino licenses were awarded initially, with a fourth issued a year later.

Alongside the proposed changes, construction costs and work opportunities that the casinos would bring, the tenders also have to include a proposed casino gaming tax. They have to state their proposed tax rates on slots games, and on table games.

Resorts World NYC – $7.5 billion

Resorts World NYC, owned by Genting Group, already operates in Queens through its VLT facility. The proposal includes a $5.5 billion redevelopment plan and $2 billion in community development. We could be looking at a full scale integrated casino resort with hotels and leisure facilities. Resorts World runs casinos all over the world, from its Singapore mega resort to popular Philippines casinos and some of the largest casinos in Europe.

Project highlights:

• Strong community support, a 6-0 approval from the Queens Community Advisory Committee
• Solid track record on jobs and diversity hiring
• Promised $600 million licence fee
• Tax proposal: 56% for slots and 30% table games

Bally’s Bronx – $4 billion

Bally’s Bronx proposal stands out for its bold attempt to bring a large scale casino to one of New York City’s most underserved boroughs. The $4billion project would transform a portion of the Bronx into a mixed-use entertainment complex, including a casino, hotel, retail spaces, and community recreation zones. Bally’s has stressed that the Bronx location will generate thousands of permanent and construction jobs while revitalizing a neglected area of the city. The company is famous for its high end Las Vegas Strip casinos, and for running some of the most popular landbased casinos across the US.

Project highlights:

• Backed by the Bronx Chamber of Commerce and several local labor unions
• Estimated $2.5 billion in private investment and infrastructure upgrades
• Proposal includes 4,000 permanent jobs and 14,000 construction roles
• Bally’s promises significant local reinvestment, with a community fund focused on small businesses and workforce training
• Tax Proposal: 30% for slots games 10% for table games

Metropolitan Park – $8 billion

The third remaining bid, Metropolitan Park, is a joint venture backed by Mets owner Steve Cohen, Hard Rock International, and SHoP Architects. The group’s $8 billion vision would completely transform the area around Citi Field in Queens into a year-round entertainment district, with a full on casino, hotel, music venues and event centres, and green park spaces.

Project highlights:

• $8 billion integrated resort and entertainment zone next to Citi Field
• Strong backing from Hard Rock International, providing global hospitality expertise
• Designed as a “community-first” project, incorporating cultural events and sustainable infrastructure
• Seeks to redefine the area as a “sports, leisure, and gaming corridor” for New York City
• Tax proposal: 25% for slots game 10% for table games

Timeline of the Race and When the Results Are Due

The Gaming Facility Location Board is now reviewing and scoring all three remaining bids. Public consultations and community input periods are already complete, and the GFLB is in closed-door deliberations through November. The final recommendations are expected by December 1, after which the NYSGC will issue the three downstate commercial casino licenses. The GFLB is operating on a weekly meeting cadence, meaning there are possibilities to still convene and review the proposals. But by December 1, we should have our answer.