Three downstate casinos in New York to bring economic benefits

Legalized gambling can bring significant economic stimulus in the form of tax revenue. In the growing land-based market in the United States, there are close to 1,000 commercial and tribal gambling venues, judging by data from the US gambling industry association, the American Gaming Association (AGA).

Per the AGA's data, as of December 31, 2022, the legalized land-based casinos in the country support some 1.8m jobs and have an economic impact of $261.36bn. With gross gaming revenue of $99.4bn, the tax impact and tribal revenue share are valued at nearly $41bn. This data reaffirms the scalability and significance of the land-based gambling sector in the country and its ongoing economic impact.

With only a few states that outright do not permit casinos, around most of the US there are tribal or commercial venues. Still, it's important to mention that some states restrict the activity to a handful of venues that are usually run by Tribal operators. Still, those casinos play an important part within the local communities by supporting Tribal operators and jobs within the respective regions.

New York's competitive casino license application process launched

Judging by data from the AGA, there are more than two dozen retail casinos in New York. The economic impact of those locations is estimated at some $6.55bn and they support close to 26,000 jobs. Similar to online sports wagering, casinos contribute with tax revenue. However, there is a difference in the taxation for land-based casinos that offer table games and electronic gaming devices, as well as racinos, that are limited to slot and racetrack machines.

In April last year, lawmakers in New York passed the state budget along with a proposal that called for the establishment of three new casinos. State legislators along with Governor Kathy Hochul showed approval for the idea for three new downstate casinos. Then, in January this year, the application process started.

Although a total of three new downstate casinos are expected, it is likely the big fight will be for a single license. This is because Genting Group and MGM Resorts International already have established racinos and it is expected for them to fill in the first two license applications. That prediction comes in the context of being easier to expand the racinos by adding table games rather than building new locations.

Ultimately, by expanding casino gambling, the state expects to see a boost in new investments, raise more tax revenue and create new jobs within the sector. Moreover, to submit their applications, casino operators would also need to present research about the economic impact their project may have.

Not unexpectedly, New York downstate casino operators' investment must be a minimum of $500m. The application for the project itself is $1m. The tax revenue applicable for the three new licenses is expected to be 10% of gross gaming revenue while slots' gross gaming revenue is expected to be taxed at 25%. In addition to the $1m application fees, each of the three new casino licensees would be subject to a $500m license fee. Early projections predict that the three new casino licenses would provide a boost to the tax revenue for the state's coffers.

Major gaming and entertainment operators are interested

So far, more than 10 operators have shown interest in a downstate casino license in New York. While the process itself is lengthy, this didn't bother the operators, as many of them are major companies within the gambling vertical. Caesars Entertainment, the Related Companies, Wynn Resorts and the Soloviev Group, among others, are exploring opportunities for a downstate casino license in New York.

Early last month, Jay-Z's service entertainment agency, Roc Nation, in collaboration with Caesars Entertainment and SL Green, confirmed interest regarding a bid for a casino on Times Square. The trio's plan is to transform the current property on 1515 Broadway in Times Square, creating a new Caesars Palace Times Square, a venue that would likely help further boost tourism in New York City.

The Soloviev Group, along with the leading casino and entertainment operator, Mohegan, is another participant in the race for a downstate casino. Their pitch, called The Freedom Plaza, involves the establishment of a unique entertainment district on the east side of Manhattan. Details released by Mohegan earlier this year reveal that the project would be the home of the world's first Democracy Museum.

Additional amenities that would be available, given that the project is greenlighted, include a casino, a first-class hotel, as well as two residential towers. A unique Ferris Wheel would become a landmark for the project but there will also be plenty of green spaces, as well as entertainment outlets.

Famous real estate firm The Related Companies in collaboration with the leading gaming and entertainment company, Wynn Resorts, also teamed up to pursue a downstate casino license in New York.

The duo's proposal is for a land-based casino and entertainment resort along the Hudson River on the Western side of Hudson Yards. Ideally, the resort is expected to be positioned next to one of the busiest convention centers in the US, the Javits Center. Recently, the center has undergone a massive $1.5 billion expansion and the addition of a world-class casino and resort is expected to create a new entertainment and convention district.

The three new casinos are expected to boost tourism

The launch of mobile sports betting in New York early in January last year was a roaring success. The sports betting handle reported by licensed operators surpassed records set by states that offered the activity for years. Now, the same positive effect is expected with the three new downstate casinos.

Keeping in mind how attractive New York is for tourism, it is likely that the new downstate casino licenses will impact such processes positively. At the same time, the three new licensees would help raise tax revenue and boost the local economy of the areas where they are located.

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