New York lawmakers are continuing their efforts to bring casino expansion to the downstate region sooner than originally planned.
Last week, Senate Majority Leader Andrea Stewart-Cousins said she backed a provision in Democratic Governor Kathy Hochul’s executive budget to accelerate the launch of downstate casinos in the New York City area, beginning the process this year rather than waiting until 2023 as specified in existing law.
The Yonkers-based senator also supported MGM Resorts International’s bid to expand its Empire City Casino property, also in Yonkers, to become a full casino-resort, an upgrade from its current status as a slots-only facility.
MGM Resorts CEO Bill Hornbuckle said on an earnings call last week that the company believes it is well-positioned to earn one of the three available licenses if the legislature approves and says that the conversion would result in more than a billion dollars in capital expenditures.
“Obviously, we need to understand what the tax is going to be, what the licensing fee is going to be,” Hornbuckle said. “It will determine a great deal, presuming we're fortunate enough to win a license and ultimately go forward."
“The opportunity, the location, all of the things that would be meaningful to us in terms of a network and ultimately, omnichannel back here, both with BetMGM and ultimately Las Vegas as a cornerstone to that discussion, could be very meaningful for the company,” he added.
“But we've got to be given the opportunity to spend capital to make it work,” Hornbuckle said.
Hochul’s proposal would give the New York State Gaming Commission the authority to select three more licensees through a request-for-application procurement process.
A request for information regarding the extra licenses put forth by the gaming commission last year received not only responses from MGM and Genting Group, which owns the Resorts World Queens video lottery casino, but heavy hitters from across the casino industry, including Las Vegas Sands, Wynn Resorts, Rush Street Gaming, Hard Rock International and Bally’s.
“It would be beneficial to the people of the state whether they like gaming or not to do this,” said Senator Joseph Addabbo, chairman of the Senate Racing, Gaming, and Wagering Committee, citing the more than $500m in additional revenue for each license in addition to the ongoing tax revenues.
Addabbo acknowledged that one of the biggest concerns legislators have about the acceleration is if the two video lottery casinos are granted licenses, where the third license would go.
“I say we can deal with that, that’s not the issue that’s going to stop us from going forward and doing that this year,” he told VIXIO GamblingCompliance.
“We can deal with a siting issue because the gaming entities understand that they’re going to have to pay upwards of $500m, but it may take two or three years to find a spot, build a spot, get community input, get all the local approvals.”
“I don’t think there’s an issue we can’t address to get it done this year.”
The next step in the process will be the release of “one-house” budget bills from both the state's Senate and Assembly, in mid-March. The state’s fiscal year ends in March, so a budget bill is typically completed by month’s end, although the process does sometimes bleed into the new fiscal year.
The state is already in the midst of a gaming expansion wave of sorts, with Hochul’s office sending out a press release on Monday (February 14) following the Super Bowl touting that the state’s mobile sports-betting program has brought almost $2bn in handle since its launch on January 8.
Legal sports betting has resulted in more than $70m in tax revenue for the state through its controversial 51 percent tax rate.
“Over the past month, we've seen how mobile sports wagering can be an economic engine for New York, driving significant funding to our schools, youth sports, and so much more,” Hochul said in a statement. “As this new industry continues to grow, New York will make sure we have the resources and guidelines in place to make it a success for all.”
“It’s certainly momentum, sure, in talking about what we can do next,” Addabbo said of online sports betting and its impact on other gaming issues. “Credibly, methodically, taking care of and addressing the addiction issue, but what can we do going forward, and there’s plenty we can do.”