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New York Shuffle: Big beasts flexing muscles as battle to build casinos begins

New York Shuffle: Big beasts flexing muscles as battle to build casinos begins

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“Stick around kids, you’re going to see some action,” sang Graham Parker in his 1978 song, ‘New York Shuffle’, and it seems that the British songwriter could have been looking into his crystal ball as he composed his modest hit. Four decades later, real estate developers and casino operators are tripping over each other as they dissect the city and its suburbs, in search of the perfect home for a new casino resort.

New York is the most potentially lucrative and as yet almost untouched, land-based casino market in the entire USA. As state officials edge closer to lifting the existing moratorium and allowing the construction of new gambling facilities in the state and the city, battle lines are being drawn in what will be a multi-billion- and community lobbying and the spending of eye-watering amounts of cash. But developers and operators will queue up to join in, because this is one rainbow that most definitely has a pot of gold at its end.

Since 2014, the state of New York has long had a ban on new ‘downstate’ casinos and this lasts until the end of 2023. But Governor Kathy Hochul is keen to bring this moratorium to a close a year early and allow up to three new casino sites to be developed in the downstate area. Not surprisingly, the big beasts are flexing their muscles, with nine of the world’s leading operators poised to propose the grandest of schemes for hotel, casino and entertainment locations.

According to reports, this line-up currently includes Bally’s Corporation, Genting Group, Las Vegas Sands, Manhattan Water Club, MGM, Rush Street Gaming, UE Resorts and Wynn Resorts, each of which submitted initial proposals to the New York State Gaming Commission in December. With the wider media, lobbyists and cynics all shouting up scaremongering potential sites for these mega-resorts, such as next door to Citi Field (home of the Mets baseball team), more plausible proposals might include Resorts World in Queens, Empire City in Yonkers, Willets Point in Queens, Belmont Park on Long Island or the Hudson Yards development, close to Penn Station. All these names are in the hat.

Resorts World in Queens and Empire City in Yonkers are already widely viewed as two of the favourites in this keenly contested race. Both sites are already racetracks, operating VLTs, owned by two of the industry’s true giants, Genting and MGM, and so are able to hit the ground running. The latter recently commented in a statement: “We are ready to deliver thousands of new jobs for Westchester and the Bronx while generating $1billion in new economic activity with a full gaming license. Empire City Casino by MGM Resorts is ready to roar.”

With a population of 20 million, nine million of whom live within the five city boroughs, plus a continuous stream of visitors from around the world, New York is the largest untapped casino market in the US. And ever since the 1977 New Jersey Casino Control Act, those who wish to gamble have only had to make the shortest of trips in order to enjoy their downtime whilst boosting the coffers of the state next door.

With more than just a nod in the direction of the societal damage inflicted by the Covid-19 pandemic, Rich Maroko, President of the influential New York Hotel & Gaming Trades Council, notes: “With a responsible approach to pursuing new casino licenses downstate, we have a unique and timely opportunity to put unemployed hospitality workers back to work while also giving our economy a much-needed boost.”

Almost 10 years ago, in 2013, the voters of New York approved a referendum allowing seven private casino licenses, leading to the state legislature passing a law that saw the opening of casinos in the Albany, Catskills and Finger Lakes areas, and also along the border with Pennsylvania. And now, seeking all means to boost the state’s depleted post-pandemic bankroll, legislators appear keen to accept bids for downstate casinos this year, a year earlier than originally intended.

“It is going to happen soon enough anyway. If we’re ready to do it and all the infrastructure is in place and the regulatory structure is in place, why not do it sooner?” says State Senator Mike Gianaris, the chamber’s Deputy Leader and a Queens Democrat.

The good news for all interested parties is that the wait for a definitive answer should not be a long one. The next fiscal year begins in only a few weeks’ time, on April 1st, and the impact of a decision – either way – on the ongoing state budget negotiations is sure to be seismic. Given the many other timescales involved in planning, building and opening a new casino, the NYS Gaming Commission must be very much hoping the bidding processes can begin sooner rather than later.

It is anticipated that each bid will be subject to a huge application fee, rumours suggest $500m, and that this must be accompanied by guarantees of thousands of jobs, across multiple sectors, prominent amongst which will be construction. Such conditions point us in the direction of the old boxing analogy, “a good big ‘un always beats a good little ‘un” and so it will be in this case. The big dogs will come out to hunt because this is their turf; these projects will be so astronomically massive that only they will be at the table.

Soo Kim, Chair of Bally’s Corporation, is just such a beast and having grown up in Queens, he sees this as a must-win scenario, saying in a recent interview: “I believe in New York City. I think we are going to come back. Gaming has a proven potential to be an anchor in that recovery.”

This April will see the opening of the Hard Rock Hotel New York, in Times Square. The company has kept quiet about any casino ambitions, but it is unrealistic to imagine them not being keen. It sounds like a great idea in theory, but such a proposal would be so fraught with community and regulatory obstacles, let alone purely practical problems, that the pathways of less resistance that lay in the outer boroughs of the city will surely make most sense?