The legislation proposal meant to speed up the bidding for downstate casino licenses in New York has pretty much stopped in its tracks. People who know the industry and political scene agree that the bill is as good as dead. The bill intended to get bids rolling in by the end of August 2024. But Gov. Kathy Hochul will not do anything with it, so it will just run out of time and die on its own.

Governor’s Inaction Casts Shadow on New York Casino License Bill

The bill, introduced by Senator Joseph Addabbo (D-Queens) and Assemblyman Gary Pretlow (D-Mount Vernon), proposed a deadline of August 31 for casino operators to submit their bids for three available licenses in the New York City area. However, with only a few weeks remaining in August and no action from the governor’s office, observers believe the bill is moot. 

Bennet Liebman, a government law professor and former member of the New York State Racing and Wagering Commission, pointed out the impracticality of expecting casino developers to prepare proposals for multi-billion-dollar projects within such a short time frame, reported Newsday.

The governor’s quiet stance on the bill has many people guessing that her team likes the schedule set by the state’s Gaming Facility Location Board. This plan gives companies until June 2025 to hand in their bids. 

Michael Hershman, CEO of the Soloviev Group, one of the companies planning to bid for a casino license, expressed that the bill’s lack of movement indicates a clear preference for the 2025 timeline, which is considered more feasible for both applicants and regulators.

Extended Casino License Timeline Raises Concerns Over Potential Revenue Loss for New York State

The delayed timeline has disappointed some lawmakers, particularly Pretlow, who expressed frustration that the process will extend until the end of 2025. Despite this, there are signs that the bill served a purpose by pushing the Gaming Facility Location Board to finally set firm dates for the bidding process. Before the bill was passed, the Board had hesitated to establish a schedule, citing unresolved zoning issues in New York City.

If the current schedule stays on track, casino companies have until June 2025 to hand in their plans. The final choices should come by December 2025. This means new casinos wo not break ground until 2026 at best pushing back the date when these new places might open.

Waiting longer to open the bidding process might hit New York State’s wallet. By holding off on getting bids, the state puts off getting big application fees. It would also delay the huge license fees that could be $500 million to $1 billion for each casino.

This wait could also change who has the upper hand. Places that already have slot machines, like MGM’sEmpire City Casino in Yonkers and Genting’s Resorts World in Queens, could get ahead if they win bids. These spots could quickly become full casinos giving them a jump start ahead of new players.

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The New York State Gaming Facility Location Board has extended the deadline for downstate casino bids to June 27, 2025. This decision comes even as a bill proposing an earlier deadline of August 31, 2024, awaits Governor Kathy Hochul’s signature.

New Timeline for Downstate Casino Bids

On June 27, 2024, the Gaming Facility Location Board unanimously approved the new timeline. The revised schedule requires all applications to be submitted by June 27, 2025. Following this, Community Advisory Committees (CACs) will form to begin their statutory evaluations. CACs must vote on their respective projects by September 30, 2025, after which approved applicants will submit additional materials, including proposed tax rates, for further evaluation.

The board plans to make its decisions by December 1, 2025, with the New York State Gaming Commission issuing licenses by December 31, 2025. This extended timeline is designed to ensure that all legal and procedural requirements are met, giving communities ample opportunity to voice their opinions and allowing applicants to finalize necessary zoning and environmental approvals.

Conflict with Pending Legislation

Senator Joe Addabbo’s bill (S9673A), passed through the House and Senate in early June 2024, proposes an August 31, 2024 deadline for bid submissions. However, board members expressed concerns that this deadline is unrealistic. Board chair Vicki Been stated, “The hope would be that our reasoning will be helpful to the governor,” indicating the board’s belief that a rushed deadline would not be practical given the complexity of the bidding process.

Bidders must complete zoning changes and environmental impact studies before their proposals can be reviewed. Currently, sites like Bally’s Bronx proposal and Steve Cohen’s Queens proposal require rezoning, as they are designated as parkland. Both developers are lobbying local and state boards for these changes, but the approvals are not yet in place.

Interested Bidders and Proposals

There are 11 bidders interested in the three available casino licenses for downstate New York. The proposals and their respective developers and operators include:

• Avenir: Silverstein Properties (Developer), Greenwood Gaming (Casino Operator) – Manhattan
• Bally’s Links at Ferry Point: Bally’s Corporation (Developer and Casino Operator) – The Bronx
• Caesars Palace Times Square: Caesars Entertainment, SL Green, Roc Nation (Developers), Caesars Entertainment (Casino Operator) – Manhattan
• The Coney: Thor Equities, Legends Entertainment, the Chickasaw Nation, Saratoga Casino Holdings (Developers), Saratoga Casino Holdings (Casino Operator) – Brooklyn
• Freedom Plaza: Soloviev Group (Developer), Mohegan Gaming (Casino Operator) – Manhattan
• Metropolitan Park: Steven Cohen (Developer), Hard Rock International (Casino Operator) – Queens
• MGM Empire City: MGM Resorts International (Developer and Casino Operator) – Yonkers
• Resorts World New York City: Genting Group (Developer and Casino Operator) – Queens
• Sands New York: Las Vegas Sands (Developer and Casino Operator) – Long Island, Nassau County
• Saks Fifth Avenue: Hudson’s Bay Company (Developer), TBD (Casino Operator) – Manhattan
• Wynn New York City: Related Companies, Oxford Properties Group (Developers), Wynn Resorts (Casino Operator) – Manhattan

Community and Regulatory Considerations

In addition to securing community support through CACs, applicants must navigate the State Environmental Quality Review Act (SEQR) process. This extensive review is essential to identify and mitigate any adverse environmental effects of the proposed projects. The City of New York has updated its zoning code to permit licensed commercial casino gambling, but some potential applicants still face additional zoning hurdles.

The board’s decision to extend the bid deadline aims to provide a fair and thorough evaluation process, ensuring that all proposals meet the required standards and that the community’s voice is heard.

Source:

The New York State Gaming Facility Location Board (PDF), June 27, 2024. 

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The process for awarding three new downstate New York casino licenses may take significantly longer than initially expected. Previously, industry insiders and experts speculated that the bidding process for the licenses may open at some point this month. With the month passing and a range of processes left outstanding, it now looks less likely for the bidding to be launched during the first quarter of this year.

In fact, according to a new report, this lengthy process may be extended even by a year. A recently released report by Newsday, citing the opinions of industry insiders, suggests that the awarding of the downstate licenses may even happen at some point during the first quarter of 2025. This otherwise means that the process may take significantly longer than initially expected.

What’s expected now is for the Gaming Facility Location Board to release the answers to questions submitted by interested casino bidders. The first round of such questions was released back in August, while submissions for the second round, to which responses are yet to be released, started back in October. Once the Board releases the responses, a 30-day window applicable for bidders would open for casino operators.

Besides this process, casino license applicants must also clear outstanding issues related to zoning. Late last year, New York Mayor Eric Adams introduced a new proposal that sought to ease this process. This ambitious plan that sought to expedite the casino approvals faced opposition from Community Boards last month.

New Casino License Fees Missing from FY 2025 Budget

The potential delay, suggested by industry insiders, doesn’t come as a surprise, especially considering that the license fees from the three casinos did not make it into the fiscal 2024-2025 budget. The FY 2025 Budget sets a plan for the revenue through March 31, 2025.

In other words, New York may miss out on significant proceeds unless the three casino licenses are awarded. Early estimates predicted a license fee of $500 million per license or some $1.5 billion in extra proceeds for the state if the licensing is expedited.

The FY 2025 Budget, released by Gov. Kathy Hochul earlier this month, brought bad news for online casinos as well. Despite efforts toward the legalization of iGaming activities, the $233 billion budget did not include texts regarding the activity. According to lawmakers, this action may doom the legalization of the activity, at least for this year.

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Last year, New York confirmed plans for the development of three new downstate casinos. This sparked debate as many operators saw the potential of this opportunity, while local communities sought to determine how they would be impacted by the casinos. The development of those projects would also bring economic stimulus for different regions, offering temporary and permanent workplaces and raising tax revenue.

Now, a new report released by Newsday criticizes the slow progress of the three downstate casinos. Back in January, the Gaming Facility Location Board started accepting applications from potential candidates. The lengthy processes concluded with a 103-page document that included the Board’s answers to 613 questions by applicants requiring clarity on the topic.

In its recent op-ed, the publication criticized the slow progress, explaining that the Board needed 208 days to answer 613 questions, calculating that this timeframe represents less than three answered questions per day. Speaking about the application launch in January, it said that since then the “process has been anything but energetic.” What’s more, the recent report highlighted the incomplete and simplistic answers some of the applicants received.

“The state board spent 208 days answering 613 questions from prospective applicants. That’s less than three questions per day. Some answers were thoughtful, helpful to the applicants, even insightful. But much of the Q&A contained simplistic and incomplete responses on trivial topics — like how much detail applicants should include in their submissions. The unsurprising and relatively unhelpful answer: the most detailed information possible,“

reads the recent op-ed released by Newsday

A Second Round of Consultations Is Open through October

After the initial round of inquiries, operators have a new chance to ask more questions in a second round that will go through October 6, 2023. It is unclear when the answers to the second questions and answers session will be released. Yet, Newsday suggests that the Board should use this time to focus and evaluate its capabilities, ensuring it has enough resources and staffing to respond to upcoming queries faster. It added that the “rest of the process should be conducted in an open, efficient way.”

Without any doubt, the three new downstate casinos would bring benefits, considering that gambling companies are likely to spend hundreds of millions, if not billions, while competing for a license. This summer, the prominent casino operator, Greenwood Gaming and Entertainment, along with the real estate investment and development firm, Silverstein Properties, confirmed their intentions to participate in the race for a casino license in downstate New York.

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Seeking to expand gambling in New York, the state confirmed plans for three downstate casinos earlier this year. The competition is fierce, given that only three licenses are planned but two of them are likely to be secured by existing racinos. This means that it is quite likely major gambling industry players to compete for the single license remaining.

Now, a recent report released by the New York Post reveals that Related Companies revised its plans for a new massive casino mega-complex at Hudson Yards in New York. The project has a price tag of $10 billion, according to Related’s CEO, Jeff Blau. It is expected to feature a luxury hotel with 1,700 rooms within a “resort” tower. This would complement the nearby Javits Center and is expected to help attract more visitors.

More importantly, the project is expected to offer casino gambling with the globally-recognized Wynn named as the operator. The proposed skyscraper project is expected to offer up to 250,000 square feet of gaming floor that will house craps, poker, roulette, as well as blackjack games. Additional amenities the project will include would be retail outlets, as well as fine dining options.

In addition, Related pitched a plan for a 2 million-square-foot office tower that would use a part of the 6.5-acre Hudson Yards located between 11th and 12th Aves. in New York. Still, according to Blau, the “centerpiece” of the billion-dollar project would be the Wynn-branded tower, offering supreme entertainment and hospitality options.

“It will be one of the most incredible tall buildings in New York City.“

Jeff Blau, CEO of Related Companies

The Company Faces Competition

Although Related undoubtedly has an ambitious plan for a downstate casino, competition is certainly not backing out. Only recently, Toom Reeg, Caesars Entertainment’s CEO, spoke about the company’s New York bid for a Times Square casino.

In an interview for News 12, Reeg discussed for the first time publicly the company’s plans for the Caesars Palace Times Square venue. He revealed that the project would include a 52-story skyscraper and will offer a gaming area of 250,000 square feet. Additionally, Caesars Palace Times Square would offer 950 hotel rooms.

But it’s not only Caesars that aims to secure a license in New York. Las Vegas Sands, another major industry player, said last week that it secured a 99-year lease approval from Nassau County. This marked an important step in the company’s plan for a $5 billion-dollar casino project near the Nassau Coliseum located in Uniondale.

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