Big Gamble in the Big Apple? Senate Budget Proposal to Fast-Track 3 NYC Casinos

New York lawmakers are careening toward an April 1 deadline to agree upon a state budget for the 2021-2024 fiscal year.

Both Democrats and Republicans have put forth their many, often competing desires. Embattled Gov. Andrew Cuomo has also submitted an executive budget proposal amid the complications of a recently launched impeachment investigation by the New York General Assembly.

Meanwhile, there is a new Senate push to authorize three new casinos in New York City. Whether such an effort might help advance the cause of NYC casino proponents or not remains to be seen. For now, the topic of downstate casinos is among items up for debate as the budget deadline looms.

Senate proposal would fast-track approval of NYC casino licenses

As City Limits notes, the issue of New York City casinos was going to be addressed one way or another, and soon. NY voters approved four upstate casinos in 2013. When they did, the new law included a provision to decide by 2024 whether to allow casinos in NYC as well.

The Senate budget bill calls on the New York State Gaming Commission to move ahead and put out a call for applications for casino licenses by July 1. Furthermore, the proposal directs regulators to move quickly and grant three licenses within 150 days.

The proposal would require the three new casinos each to pay a minimum license fee of $500 million. The casinos would also be required to pay annual taxes at 45%. That tax rate could be reduced by deductions for spending and promotional credits.

The proposed bill requires the City Council to approve locations for the three casinos. Manhattan, Brooklyn, and Queens are possibilities. The two currently operating video lottery terminal facilities (VLT), Empire City Casino in Yonkers and the Resorts World Casino in Queens, could become full-fledged casinos with a third added elsewhere.

In any event, if the proposal were to pass the City Council would face the considerable task of making such decisions.

None of the General Assembly’s proposed budget bills include provisions related to downstate casinos. Therefore, inclusion of the Senate’s casino proposal requires the reconciliation of the two chambers’ bills.

Downstate casinos excite lobbyists, could bring revenue, jobs

In preparation for the NYC casino discussion, the state hired gaming consultant Spectrum Gaming to assess the potential prospects.

Spectrum found adding three casinos to the two existing VLT facilities would produce $5.5 billion in gross gambling revenue. Of that total, $841 million would be tax revenue. Converting the two VLT facilities and adding a third casino would be less lucrative though still generate considerable revenue. Under that scenario, the casinos would produce $4.2 billion in revenue annually with $500 million in taxes.

Spectrum’s assessment also determined the majority of casino traffic would likely come from NYC residents, not tourists. That potentially means whatever revenue and taxes the casinos produce would be largely taken from other sources in the city.

Meanwhile, Spectrum also estimates the new casinos could create as many as 30,000 new jobs in the state.

City Limits notes how one indication of the potential popularity of downstate casinos is the significant money spent by lobbyists over the last year.

The Genting Group (owners of Resorts World) spent $1.2 million in 2020 on lobbying efforts. MGM (who own Empire City) also spent over $525,000. The Las Vegas Sands Corporation (now known simply as the Sands Corporation) likewise spent nearly $450,000 funding lobbying teams. Bally’s has also recently become involved in the lobbying game.

The Senate budget proposal would affect the existing four upstate casinos in another way as well. The bill includes a means for those casinos to apply for reduced state taxes. The discount could be as much as 20% should the casinos meet certain criteria to receive the reduction.

For some, three downstate casinos might be one too many

As noted, we’ll see if the Senate proposal to push ahead on three downstate casinos ultimately becomes part of an approved budget. There has been pushback already, including from J. Gary Pretlow who chairs the General Assembly’s Committee on Racing and Wagering.

As Spectrum News reports, Pretlow remains on board when it comes to introducing mobile sports betting in the state, although he opposes Gov. Cuomo’s suggested single-operator plan.

However, when it comes to the Senate’s idea for three NYC casinos, Pretlow is less enthusiastic.

According to Pretlow, the primary objection concerns adding a third casino into the mix.

“Basically, what the Senate bill did was grandfathered the two existing racinos downstate [Empire and Resorts World] that have indicated they want to have a full casino license, which I totally support 100 percent.”

“But there’s this fear that other entities that think they can bid for this, the third license, would have been left out,” he added. Pretlow further noted how that situation could lead to subsequent “legal issues” that would delay the entire process.

In any case, that budget deadline is now less than a week away. That means there shouldn’t be much of a delay to find out whether the Senate’s casino proposal makes it into the new budget.