Inside the high-stakes battle to win a New York City casino licence

A Caesars Palace casino in the heart of Times Square. A sprawling gambling hall along Coney Island’s iconic boardwalk. A Hard Rock casino complex next to the home stadium of baseball’s New York Mets.

Eight projects are bidding for up to three state licences to operate a casino in the lucrative New York City market, each dangling the prospect of generational investment in America’s largest metropolitan region.

But one — a Bally’s casino proposed on a Bronx golf course once run by President Donald Trump’s company — may have already run out of luck, after city lawmakers denied it a key approval in mid-July.

All of the proposed casinos, in application materials submitted in recent days, promise to create thousands of new jobs, flashy new community amenities in the form of hotels, shops, restaurants and entertainment venues and billions of dollars a year in taxable gambling revenues for the state’s coffers.

How realistic those promises are, though, is an open question, given the proliferation of casinos in the northeast and the explosion of online gambling in recent years, casino experts say.

“The question isn’t whether New York City can support casinos, but whether three full-scale properties can achieve their ambitious revenue projections without cannibalising each other,” said Sam Chandan, a professor at New York University’s Stern School of Business.

The arrival of full-fledged casino resorts in New York City has been years in the making.

The gambling industry spent mightily to secure approval from New York voters in a referendum authorising the licensing of up to seven full casinos with live table games back in 2013. But the state initially allowed upstate venues a head start.

The state’s Gaming Commission says it hopes to finally award up to three downstate licences in December. But before then, community advisory committees appointed by lawmakers and local officials will weigh community opinions of each plan.

Nearly all the casino proposals face some degree of local push back.

On Monday, July 14, the New York City Council denied Bally’s a needed rezoning change following local resident concerns about the environmental impact of its US$4 billion proposal, which also calls for a 500-room hotel and a 2,000-seat event centre.

Bally’s, which bought the former Trump Links course in 2023, had promised to pay Trump another US$115 million if it were to secure a casino licence, though that was not among the objections voiced by the Democratic majority on the council nor the Republican lawmaker representing the Bronx district. Spokespersons for Bally’s declined to comment on the future of the project.

Not surprisingly, the debate over the proposed Times Square casino has taken centre stage, with supporters and opponents recently holding duelling rallies in the Crossroads of the World.

Among the prominent groups opposed to the US$5.4 billion plan is the Broadway League, a trade group representing America’s performing arts theatres. It says a casino would draw patrons away from neighbourhood businesses and threaten a theatre industry still reeling from the COVID-19 pandemic.

BOOST DEMAND

The project’s backers have countered that the plan, which calls for renovating a skyscraper that currently houses the Minskoff Theatre, home of long-running The Lion King musical, will actually boost demand for Broadway tickets.

The developers, which have also enlisted Jay-Z’s Roc Nation to curate their entertainment offerings, promise US$250 million in community projects, including a public safety plan designed by former NYPD Commissioner Bill Bratton and a multimillion-dollar civil rights museum that helped earn an endorsement from the Rev Al Sharpton.

The two other casinos proposed in Manhattan — one for its West Side and another on its East Side — could face similar headwinds, given their proximity to residential neighbourhoods, according to casino experts.

But the proposed West Side resort, near the Jacob K. Javits Convention Center and the Lincoln Tunnel to New Jersey, could reel in business travellers and convention attendees, if it can win over locals, said Soojin Ha, a lecturer at Cornell University’s business school.

Meanwhile in Brooklyn, organisers of the quirky Mermaid Parade are among those leading the charge against a Coney Island casino, claiming the plan would remove some of the boardwalk’s iconic amusement rides and block access to the public beach.

Developers of The Coney say the more than US$3 billion project, which also calls for a hotel, a 2,400-seat arena and a convention centre, will be built on privately owned land and not impact the adjacent public lands where the rides are located.

New York market could support three casinos, expert says

Since the 2013 referendum, four full casinos have opened in New York, though all of them are located upstate, miles away from Manhattan. The state also has nine gambling halls offering slot machines and other electronic gambling machines but no live table games.

Some three-hour drive north of Manhattan are the Native American tribe-owned Mohegan Sun and Foxwoods casinos in Connecticut. Two hours south are the New Jersey shore casinos of Atlantic City, and less than two hours due west in Pennsylvania is the tribe-owned Wind Creek Casino at the former site of Bethlehem Steel.

Despite the competition from seemingly all corners, New York City’s dense market could sustain three gambling halls, depending on where they’re located, said John Holden, a business professor at Indiana University who specialises in gambling law.

The state could also hedge its bets by awarding two of the three licences to proven winners: the racinos -- slot parlours built alongside horse racing tracks — that have been successfully operating for years in the New York City area, said Alan Woinski, a New Jersey-based gambling consultant.

MGM Resorts is proposing a US$2.3 billion expansion of the Empire City Casino at Yonkers Raceway. Resorts World, owned by Malaysian casino giant Genting, is proposing a US$5.5 billion investment to its gaming facility at the Aqueduct Racetrack in Queens.

Those expansions, Woinski noted, could be rolled out in a matter of months, meaning the state wouldn’t have to wait years for the construction of a wholly new site to start reaping the financial windfall.

AP