New York Board Answers First Batch Of Casino Licensing Questions

August 31, 2023
New York’s casino selection board released a lengthy question-and-answer document on Wednesday regarding the selection process for three new casino licenses that can be placed in and around New York City.


New York’s casino selection board released a lengthy question-and-answer document on Wednesday (August 30) regarding the selection process for three new casino licenses that can be placed in and around New York City.

The 103-page document answers more than 600 questions posed to the New York State Gaming Facility Location Board regarding the application and selection process for the three downstate casino licenses.

A request for applications (RFA) was issued in January, with the first set of questions due in February and only Wednesday (August 30) was the first set of answers released.

Among the biggest questions surround the potential cost of entry for companies looking to obtain a license.

State law requires a minimum $500m license fee paid within 30 days and a minimum $500m capital investment in the property, although in both cases the investment can be higher.

The RFA also specifies that changes that reduce the size of a facility would not be permitted after a license is awarded, nor would the opening of a temporary casino prior to the completion of the permanent facility.

However, the board clarified Wednesday that standard changes that take place as the design phase of a project progresses could happen provided that they could be defended.

“The intention of the restriction was to prevent an applicant from undertaking a bait-and-switch, wherein the proposal is resized to the benefit of the applicant,” the board said in the document.

“Accordingly, the burden would be on an applicant to defend any proposed changes to the initial submission as not material to the application.”

The board also clarified that although the license comes with an initial term of between ten and 30 years, differing license terms can be awarded to different licensees “based on the capital investment and financial return to the state provided by each applicant.”

“The commission will consider the proposed licensing term in relation to the total financial and economic value of the applicant’s proposals in relation to other applicants’ proposals,” the document reads.

The same applies to the state’s competitively bid tax rates.

Although gaming operators must propose a tax rate of at least 25 percent on slot machine revenues and a 10 percent rate on other games, including table games, ultimately, they will have to propose a higher rate, and the commission can select different tax rates for different operators.

This process differs from the state’s selection process for mobile sports betting, where applicants submitted proposed tax rates and the state in turn created a taxation matrix based on the number of operators in the state that all operators who wished to be licensed would have to follow.

The result was a 51 percent tax rate on all mobile sports-betting operators in the state, a figure that operators began lobbying to be reduced almost immediately.

Although the RFA says 70 percent of the weighting for an application will be given to “economic activity and building development,” attempts by stakeholders to gain more clarity on how much weight would be given to a higher license fee and/or tax rate were unsuccessful.

“A further breakdown of the scoring criteria is not presently contemplated,” the board responded to multiple questions.

With the release of the first set of answers Wednesday, the next step of the casino licensing process would be a second round of questions from stakeholders that would be due by September 29.

Applications would be due 30 days after the board’s response to the second set of questions.

However, even the board acknowledged that the response time on questions has been on the lengthier side.

“In previous RFPs, the commission took between two and four weeks to respond to questions,” one question posited. “Does the commission believe it will take a similar amount of time in this process?”

“Obviously, no,” came the board’s deadpan response, which came six months after the first set of questions were submitted.

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