ALBANY — As the jockeying behind the scenes is underway over who might win lucrative casino bids in New York City, one view is increasingly emerging among some state legislators: Two of the three licenses up for grabs might simply go to the sprawling racetracks with video lottery terminals in Queens and Yonkers.
Indeed, Resorts World New York City in Queens and Empire City Casino in Yonkers, which already have more slot machine-like devices than any Las Vegas gaming hall, are ramping up their push this year to be able to convert to full-scale casinos.
And some key lawmakers say that the Genting-owned Resorts World and MGM’s Empire City might have the inside track as state leaders contemplate expediting the issuance of the three unused downstate New York licenses this year, instead of waiting until 2023.
“We’re looking more toward conversion: if you can convert an existing facility to a full-fledged casino, then that would be acceptable,” said Assembly Racing and Wagering Chair Gary Pretlow (D-Mount Vernon).
“The former governor didn’t like that. Hopefully, this governor does. So if we can do a conversion, then it’s a slam dunk for Genting and MGM.”
State law does not allow the new licenses to be given out until 2023, but Gov. Kathy Hochul proposed a state budget last month that would move up the timeline, setting off high-stakes negotiations among casino giants to get a foothold in New York City — the largest untapped gambling market in the nation.
If approved, the state Gaming Commission would establish a bidding process to apply for the licenses, similar to how four upstate casinos were picked in 2014. So even with strong support among powerful leaders, Genting and MGM would still need to emerge from a lengthy review process.
And there’s another factor being contemplated: It’s unclear where a third casino would go if two of the licenses end up in Queens and Yonkers.
There’s already sizable resistance from community leaders and lawmakers to putting one in Manhattan, as well as brewing opposition to one in Brooklyn; and Yonkers borders the Bronx, where many of Empire City’s customers and workers already live.
Pretlow suggested finding a suitable location for a third casino may be a hard sell — even in a city with 8 million people.
“I honestly don’t see a location that a third license would go. And if one was awarded, it’s at least three years down the road” from getting all the regulatory approvals and being built, he said.
Senate Finance Chair Liz Krueger (D-Manhattan) has long opposed any gambling expansion in New York. But if the bidding goes forward, she wants to ensure that community support would be a critical factor in the siting.
“I just want to make sure that they cannot bigfoot any specific neighborhood to take a casino that they don’t wish to have there,” she said.
Asked if she thinks Manhattan residents would back a local casino, she responded: “My gut is that there would not be community support for a casino in almost anywhere in Manhattan.”
Are two of the three casino licenses accounted for?
With Genting and MGM previously investing heavily into their existing facilities, which are already among the most profitable in the nation, some lawmakers are advocating for them to simply win two of the three licenses because they could quickly switch to slot machines and add table games, along with adding new amenities.
The facilities are among 10 racetracks that have video lottery terminals, which are like slot machines but instead controlled by a central state system and thus are less profitable for operators than privately-controlled slots.
MGM, for example, which bought the venerable track from the Rooney family in 2019, wants to add a hotel and perhaps an entertainment venue if it lands a full-scale casino license.
And it has an important backer: Senate Majority Leader Andrea Stewart-Cousins, whose Yonkers’ district borders the track.
Expediting the licenses is “something that our conference has supported, and of course, I’m going to support my hometown casino, who, by the way, has done the work” to build community support for an expansion, Stewart-Cousins told reporters last month.
And in Queens, Resorts World’s effort to win a casino license is being backed by Senate Racing and Wagering Chair Joseph Addabbo, whose district encompasses the so-called racino that includes Aqueduct Racetrack.
“When you look at speed to market, they’ve been a good neighbor, they can increase a 1,000 jobs almost immediately. So we look at them and we look at MGM in Yonkers: same thing,” Addabbo said.
Yet he and other lawmakers cautioned that they aren’t looking to influence what would be deemed as an independent review by a Gaming Commission siting panel.
“We understand it’s not a birthday gift. We can’t just give it to anyone. There has to be a process, but I’m confident that with a process, you look at those already in the business and all those who can do well and can have an increase in jobs,” and the two existing facilities would fare well, Addabbo said.
Big money at stake
All the behind-the-scenes maneuvering comes with the hope of big bucks for the state and the potential of sizable revenue for the casino license winners.
First, Hochul and the legislative leaders would have to include lifting the 2023 moratorium in the state budget for the fiscal year that starts April 1. Then the Gaming Commission would have to set up a bidding process, and each of the winners would likely have to pay at least a $500 million fee for the licenses and offer promises of heavy investment in their facilities.
There would also have to be some payoff to the four upstate casinos, who were assured in a 2014 law that they would have five years of operations without downstate competition or provided a lump sum if the moratorium was lifted early.
As a result, the upstate casinos, which have all struggled since opening, have appeared supportive of the downstate licensing to get underway.
“Del Lago Resort & Casino is strongly supportive of expanding downstate gaming. As a whole, we believe it is good for the state,” said Brent Stevens, chair of Peninsula Pacific Entertainment, which owns the Finger Lakes casino.
“Downstate gaming offers New York the opportunity to increase revenue from the gaming industry and bring back tax dollars that are currently flowing to New Jersey, Connecticut and Pennsylvania.”
A key for MGM and Genting would be whether the bidding process would allow them to include previous spending on their racinos, rather than solely on an additional investment they would make. For example, Genting has already built a hotel at Resorts World New York City.
When the upstate casinos were proposed, then-Gov. Andrew Cuomo largely dismissed previous investments from counting in their bids. It led Tioga Downs, then a racino that had just built a hotel, to lose out on an initial casino license — only for the process to be reopened months later and ultimately grant the facility a license amid local outcry.
“We can make the assumption that they have a head start, but the license depends on the restrictions that the Gaming Commission puts on,” Pretlow said of MGM and Genting.
For their part, Genting and MGM said they are eager to expand, citing the jobs they’ve already created, the investment in the communities, the support of unions and their potential for growth.
They each produced about $600 million in revenue last year, with a portion going back to the state — doubling their revenue from 2020 when they were closed for months due to the pandemic.
MGM said it is “ready to deliver thousands of new jobs for Westchester and the Bronx while generating $1 billion in new economic activity with a full gaming license.”
Resorts World said it recently struck a deal with the powerful Hotel Trades Council to add 1,000 new union jobs, which would double its workforce if it wins a license, and this month Genting launched its mobile sports gaming app Resorts WorldBET.
“We’ll be prepared on day one to make these new hires, generate additional revenue for New York’s public schools and drive an economic boon for local small businesses,” the company said in a statement.