Meanwhile in New York…
New York City has long been coveted as US gaming’s potential ‘goose that lays golden eggs’, by the biggest and boldest of casino operators. With a metro area population in excess of 20 million, and 50 million tourist visitors per year, the potential audience for such an enterprise is immense.
For well over a year now, the competition for what will be a maximum of three downstate New York casino licences has been gathering momentum. Partnerships have been forged, fortunes have been spent on lobbying and marketing, detailed proposals have been submitted and thousands of words of media copy have written about the upsides and downsides of each of the locations and presentations.
As the finish line fast approaches, this race remains too difficult to call. However, a couple of big questions do seem hang over the proceedings, and they are these: What exactly will inner city casinos bring to the wider New York party? And to what extent does the city actually need them? It may well be that answering these two questions will help make the selection process a little easier.
The formal selection process
Each of the proposals must be reviewed and receive a two-thirds majority by a local Community Advisory Committee. Each of these committees consists of six members, with the Governor, the Mayor, the local State Senator, the local State Assembly Member, the local Borough President and the local City Council Member each appointing a chosen representative.
The city’s Monaco-loving Mayor, Eric Adams, nicknamed ‘the Nightlife Mayor’ due to his enjoyment of weekend clubbing, has expressed a hope that two of the three chosen casinos are located in New York City itself. A former Chairman of the state’s Racing, Gaming & Wagering Committee, the industry clearly thinks of Mayor Adams as a positive voice.
The Integrated Resort proposition
The term ‘integrated resort’ originated in Southeast Asia, with the development of the Marina Bay Sands in Singapore, although other developments in Macau and elsewhere had followed similar templates. These multi-billion-dollar facilities offer a swathe of leisure, entertainment and even business options, including luxurious hotels, premium bars and restaurants, theatres, live arenas, convention centres and outdoor recreation opportunities. And crucially, many around the world, including those still not yet constructed, are situated in what would typically be described as ‘resort’ locations, this adding to their broader appeal.
The South-East Asian Model
The aforementioned Marina Bay Sands is considered to be the most profitable casino property in the world. In the decade between its opening and the arrival of Covid-19, both visitor numbers and tourist spending more than doubled, reaching 19m and $20bn respectively in 2019.
In the same year, NagaWorld in Cambodia accounted for 12% of the nation’s GDP, helping the country to welcome 6.5m foreign visitors who spent more than $5.31bn.
And, of course, there is Macau. Half a dozen original casino licensees invested over $40bn in the former colony, generating almost $37bn in 2019 revenues and becoming the world’s biggest gaming ‘hub’, before committing to invest a further $14bn over the coming decade as part of their licence renewal process.
New York casinos will be for gambling
The numbers above are eye-watering, as are the locations themselves. But these are locations that offer visitors very little else and whilst the New York bidders all promise an ’integrated’ concept of sorts, the odds of any completed project delivering a broad-based leisure and entertainment venue that comes close to comparing with any of the above are very long indeed. Because there is no need for them to do so.
New York City is already the No. 1 tourist destination in the US. The city is packed full of iconic attractions. Take your pick from the Empire State Building, Broadway, the Statue of Liberty, Times Square, Central Park, Brooklyn Bridge, the 9/11 Memorial & Museum and the Metropolitan Museum of Art, to name but a small handful. Throw world class shopping, dining, nightlife and sports into the mix and you wonder when visitors will find the time to try out a new and ‘unproven’ experience… unless of course they just want to gamble.
Beyond Las Vegas, a city that owes its very existence is due to one primary raison d’etre, the vast majority of US casinos are gambling destinations above all else. And New York will likely conform to that pattern, with ancillary leisure facilities a distant secondary priority.
Adding up the numbers
On paper, New York City ticks a lot of the right boxes, the biggest of which is that it contains lots of people, many of whom already like to gamble. Current revenues from legitimate out-of-home gambling options confirm this, and projections from the various licence applicants appear huge on first glance. However, the state of New York has an annual expenditure budget of $200bn. Three casino licences at $500m each up front, and a projected $500m each in tax revenues each following year, represents a 1.5% contribution to the state budget in year one, potentially falling to below the 1% mark in subsequent years.
With the established Foxwoods and Mohegan Sun locations, plus various Atlantic City options, not too far away the financial challenges facing prospective New York operators also include viable competition.
Summarising the options on the table
A greenfield casino in New York City, wherever it may be, will present both positive and negative connotations for local communities and passive observers alike. Does a Times Square casino in a refurbished office block sound exciting? Or one on the site of Long Island’s Nassau Coliseum, 90 minutes from Manhattan? Or one in a former stadium car park in Queens? These are questions for a whole range of interested parties to grapple with.
Arguably, two of the proposals stand apart due to their conscious differentiation. The owners of Saks Fifth Avenue are seeking to convert the top three floors of their flagship store opposite St Patrick’s Cathedral into a small-scale, luxury casino. The ‘boutique’ nature of this proposal is unique amongst the applications and, as such, has some merit.
Intriguing in a polar opposite way is the Coney Island proposal. Despite being an hour’s journey from Manhattan, this is an established entertainment destination, with beaches, a boardwalk, amusement parks and other visitor attractions. Ripe for regeneration and with a seasonally biased economy that needs a boost, it will be easy to view this proposal as culturally and politically expedient.
With so many factors in play, and so many interested parties and vested interests, it will be fascinating to see how this plays out. The rich tapestry that already exists should drive those doing the deciding to make choices that are worthy of the city, and that should be their primary objective.