The New York board sets the final license fee and minimum capital for downstate casino bids.
If you want a casino licence in downstate New York, you should start counting to $1 billion.
During a hearing that lasted less than ten minutes on Monday, the Gaming Facility Location Board of the New York State Gaming Commission made two important decisions about three potential downstate casino licenses.
The board voted unanimously to approve a minimum capital investment of $500 million and a licensing fee of $500 million. before June 27, bids must be in, and the commission will give out licenses before the end of the year.
There are a few more things that applicants will have to do. For instance, all entitlement processes, like zoning and environmental reviews, must be finished by September 30. This month has been very busy because of zoning difficulties, which have tight deadlines for most of those cases.
Last Wednesday, both the New York City Council and the state legislature gave Bally's Corp permission to rezone its Bronx bid. The Coney project from Thor Equities and other partners on Coney Island still needs to be de-mapped and voted on, which won't happen until at least June 19. All three bids for Manhattan are being looked at for their environmental impact.
The community's response will be very important.
So far, the several bidders in New York have spent a lot of effort meeting the requirements of the process. This means getting support and endorsements from the community as well as all the necessary approvals. The procedure will basically start over once the official bids are in.
A community advisory group will be in charge of every offer that is sent in. According to the NYSGC, these CACs "will be created to review the application, gauge local support, and ultimately issue a finding determining whether there is adequate support for the proposed project." Each CAC will hold many meetings to get feedback, and each will have a binding vote on whether a bid can go forward. A two-thirds majority is needed for approval.
The members of each CAC will depend on where the bid is located, either inside or outside of New York City. For people who live in the city, each CAC will be made up of Governor Kathy Hochul, NYC Mayor Eric Adams, the state senator, assembly member, borough president, and city council member who represents the area.
At this point, the only proposal that is not in the city is MGM Empire City's in Yonkers. MGM and any other bids like it will have a CAC made up of Hochul, the county executive, the state senator, the assembly member, and the local senior elected official. The mayor is in charge of cities, the town supervisor is in charge of towns, and the village mayor and town supervisor are in charge of villages.
Bidding on taxes that are competitive?
CACs must cast their binding votes before September 30. Once the bidders get the board's approval, they will pay a $1 million application fee and send all of their previous paperwork to the facility location board, which will start its own assessment process. It is important to note that the tax rate will be part of the bidding process.
The commission said that an applicant "may propose a tax rate on gross gaming revenue as part of its application, as long as the tax rate is at least 25% for slot gross gaming revenue and 10% for gross gaming revenue from all other sources."
The board will look at four main areas: economic growth, local impact siting, workforce enhancement, and diversity frameworks. The other three factors will each make up 10% of the decision, while economic development will make up 70%. By December 1, you must make your choices.
The commission will next look at the board's choices again and make a final decision. There are three licenses available, but the commission can choose to give out less or none at all.
Pull and push
Now that the financial criteria are in place, New York will have to walk a tight line between taking advantage of casinos' economic benefits and keeping the business climate appealing. The minimal investment is a little low because all of the plans easily meet it. But the $500 million licensing cost is high, especially since any new facility would have to wait a while before it could start running.
That might be the main reason why people thought from the start that the racinos would be the best candidates for two of the licenses. Yonkers Mayor Mike Spano has said that the state could make $1 billion right now by accepting those bids.
The open-ended tax rate shows that people want a rate that is much higher than the 25% slot and 10% table minimums. New York has the biggest online sports betting industry by handle, but its 51% tax rate is the highest in the country. The upcoming downstate casinos will have a lot of competition, especially from Atlantic City, which is close by, as well as from New York's commercial and tribal casinos in the upstate.
The chance that online casinos will be legal in the future is also a big deal. It is not legal in New York right now, but it is likely that it will be in the future. In New Jersey, iGaming revenue has shot up, while casino revenue has stayed the same or even gone down in some circumstances. Both Las Vegas Sands and Wynn Resorts said they were afraid that their land-based businesses might hurt their casino businesses, which is why they dropped plans to seek for a casino licence.
