New York casino licensing is in its final sprint as the December 1 deadline approaches. The state gaming commission's on-site inspections and a sudden lawsuit from the United States Tennis Association have complicated an already suspenseful competition. The fate of the three finalists—Resorts World, Metropolitan Park, and Bally's Casino—hangs in the balance, with hopes for all to be approved seeming increasingly slim. Key details such as the $600 million licensing fee and a 56% tax rate remain unchanged, but the process is somewhat elusive.
Acceleration of the Approval Process
This Monday, members of the Gaming Facility Location Board (GFLB) visited the three candidate sites to understand their actual locations and seek clarification on details such as traffic and parking. This is the committee's only public inspection before December, with other meetings held behind closed doors. The board meets weekly, but the Thanksgiving holiday might disrupt the schedule. Fortunately, their recommendations are only advisory, with the final decision resting with the state gaming commission. Looking back at 2014-15, four casinos were recommended, but only three licenses were issued, with the fourth approved the following year. Whether history will repeat itself is uncertain.
Lawsuit Adds Uncertainty
Last week, the United States Tennis Association (USTA) sued New York City's government, accusing the Metropolitan Park project of violating the lease agreement because the project site is adjacent to the US Open tennis venue. The lawsuit emphasizes that USTA has priority terms, such as exclusive parking rights during the tournament and prevention of competing events, but the city refused to share the draft agreement, straining relations. Although a spokesperson for Metropolitan Park stated that a preliminary development agreement had been signed and the project would proceed, a judge issued a temporary restraining order preventing the city from approving a new agreement, which could slow the progress of the $8 billion investment. USTA stated it is not opposing the entire project but protecting its own interests, seeking an injunction rather than monetary compensation.
Dynamics of Bidders Affect the Overall Situation
Resorts World originally had the most aggressive bid, including a $600 million licensing fee and a 56% tax rate, but there are rumors it might seek to renegotiate, lowering the tax rate or forcing competitors to raise their bids, raising concerns about the bidding process becoming chaotic. In contrast, Bally's Casino and Metropolitan Park have lower tax rates, at 30%/10% and 25%/10% respectively. Over the past year, three major operators have withdrawn from the bidding. If Resorts World also backs out, the state government's projected $1.8 billion revenue could evaporate. New York State also faces a $34 billion budget deficit, and casino tax revenue was supposed to be a lifeline, but now it's increasingly precarious.
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