New York Downstate Casino Licensees Q&A Session Published

Article ByDavid Weir

September 5, 2023

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Posted in: New York Gambling News, US Casino News

The New York State Gaming Commission (NYSGC) and the Gaming Facility Location Board (GFLB) have released a comprehensive 103-page document, addressing hundreds of questions posed by entities competing for one of the three available downstate casino licenses.

This move provides a clearer picture of the state’s approach to the licensing process for New York brick & mortar casino venues, as well as the key considerations of the applicants.

While many questions were technical in nature, regarding the legislative process, the document also answered some questions of tax possibilities, local zoning approval, and the standing assumption that two of the three available licenses are earmarked.

However, the process is far from over. A second batch of questions from prospective applicants is due by October 6, and the NYSGC has yet to set a deadline for responding to these queries. With eleven major companies competing, including gambling giants and international investors, the stakes are high.

Community Involvement and Zoning Laws

A significant aspect of the licensing process is the role of the Community Advisory Committees (CACs).

Each casino bid will be reviewed by a CAC specific to its location, ensuring that local communities have a say in the projects. However, the exact influence of these committees remains uncertain, with the GFLB yet to issue detailed guidance on the CAC process.

Moreover, local zoning laws play a crucial role. One, that wasn’t entirely clear until now. This new document confirms that both approvals are essential for any casino project to progress.

“Zoning and CAC approvals are prerequisites to GFLB evaluation,” says answer 141.

This does not look good for billionaire New York Mets owner Steve Cohen’s Citi Field area project, which faced zoning troubles earlier this year. It also could prove a stumbling block for The Coney in Coney Island, which has seen significant community-group-led opposition.

Taxation and Deal Sweeteners

From a financial perspective, the potential downstate NY casino projects are huge.

The state stands to gain significantly from the licensing process, with each of the three casino permits fetching an upfront fee of $500 million. This translates to a cool $1.5 billion for the state’s treasury, excluding the minimum of $500 million allocated for the projects themselves and the revenue from job creation.

However, the tax rates for these projects remain undetermined. The NYSGC says it will set the final tax rate after reviewing the Supplement Return Date materials. Interestingly, the state has left open the possibility of different tax rates for different gaming facility licenses, which would be a highly unexpected development.

Regulators also confirmed they would be willing to accept extra funds on top of the license fee to sweeten the deal, so to speak.

“Yes, an applicant may bid a higher licensing fee above the $500 million minimum,” the document said in Question and Answer 395.

The NYSGC emphasized that the applications, along with any supplementary materials, will be treated as public records, adhering to the New York State Freedom of Information Law.

This means that the details of the plans submitted by the bidders will be accessible to the public. Major project proposals, like Caesars Entertainment and hip-hop mogul Jay-Z’s Times Square casino, or Las Vegas Sands and its Nassau County site, have already published details of their plans.

The Road Ahead

While the initial set of answers has shed light on several aspects of the licensing process, many questions remain. The time line for the entire process is still uncertain, and the industry awaits further clarity on several fronts, including exact tax rates and the nature of the studies operators will have to conduct as part of their bids.

There was also no exact word on whether MGM Resorts International’s Empire City Casino in Yonkers and Genting’s Resorts World New York in Queens are locked in for two of the three licenses, as expected.

“The statute details the factors and weight to be used for consideration. The same factors will be applied to both proposed conversions and new facilities,” said Answer 247, when asked about existing video lottery facilities, aka the two downstate racino venues.

The New York sports betting market is already the largest in the country, and with $1.5 billion potentially incoming in base license fees alone – plenty of the world’s gambling figures will be eagerly awaiting the next round of answers from New York’s regulators.