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Long Island VLTs Add To New York Gaming Expansion

January 3, 2023
As state officials prepare to kick off the licensing process for three new casino-resorts, New York Governor Kathy Hochul has signed legislation to allow an existing casino facility in Long Island to double the size of its gaming floor.

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As state officials prepare to kick off the licensing process for three new casino-resorts, New York Governor Kathy Hochul has signed legislation to allow an existing casino facility in Long Island to double the size of its gaming floor.

Governor Hochul, a Democrat, signed bill S.7685 into law on December 28, in one of her final acts before beginning a first full term as governor of the Empire State.

The bill will authorize the Jake’s 58 gaming facility in Suffolk County to offer up to 2,000 video lottery terminals (VLTs), replacing the current statutory cap of just 1,000 VLTs.

The video lottery parlor, now owned by Suffolk OTB Corporation, opened in 2017 in accordance with a state law that permitted new VLT facilities at non-racetrack locations in Suffolk and Nassau counties.

Jake’s 58 is the only VLT parlor on Long Island since the Nassau off-track betting corporation instead agreed to install its allocation of 1,000 VLTs at Genting’s Resorts World New York in Queens.

With its limited capacity, Jake’s 58 generates almost $700 in revenue per VLT per day, or roughly twice the average of New York’s eight other video lottery casinos, according to the New York State Gaming Commission.

Owners of the property have announced plans for a $200m upgrade, pending Hochul’s approval of the legislation. Those upgrades will reportedly include a partnership for a branded sports bar with one of New York’s mobile sports-betting platforms.

The renovation project will create additional jobs and the extra 1,000 video lottery machines will also generate more tax revenue for New York education programs, according to retiring Republican state Senator Phil Boyle, who co-sponsored bill S.7685 before taking over as Suffolk OTB president this month.

“It's not just a win-win; it’s a win-win-win. And I hope the governor understands that,” Boyle said shortly after the bill was sent to Hochul’s desk in mid-December.

Hochul’s decision to sign the Suffolk County bill comes as New York’s gaming market is poised to undergo a more dramatic expansion through the licensing of up to three new casino-resorts in the New York City metro area.

On Tuesday (January 3), New York’s Gaming Facility Location Board is scheduled to meet to approve a request for applications process for the three new licenses that were authorized through the state’s 2022-23 budget bill.

The three-member board also will discuss accompanying regulations related to upfront license fees and minimum capital investment criteria, according to an agenda notice published on December 30.

Hochul’s approval also came exactly one day before a ninth New York video lottery facilities was opened at a shuttered shopping mall in Newburgh in Orange County, roughly 60 miles north of Manhattan.

The 1,200-machine Resorts World Hudson Valley facility was authorized in 2019 when lawmakers amended state law to relocate VLTs from the Monticello Raceway to a new site.

New York’s governor has recently vetoed two other gambling bills, however.

On December 16, Hochul vetoed bill S.1443 related to casino employee licensing. If enacted, the bill would have ended the automatic disqualification of casino key employees from licensure based on past criminal convictions.

In an earlier action, Hochul also vetoed bill A. 658 on November 23. That bill would have established a 13-member Problem Gambling Advisory Council to make policy recommendations for lawmakers and the state government.

The measure was one of dozens of similar bills vetoed by Hochul in November, with the governor suggesting that any new study or advisory commissions require a formal budget.

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