No Mention From Governor, But New York Casino Process Moving Along

Gov. Kathy Hochul quiet on topic in state address despite looking forward to new casino revenue

New York Gov. Kathy Hochul spoke for nearly an hour during her State of the State Address Tuesday, mentioning sweeping, expensive proposals for mental health, housing, inflation, security, and energy policies before mentioning that those ideas were just the “tip of the iceberg” of what she’d like to accomplish.

“I know most of you cannot wait to read the 275-page book containing 147 thoughtful policy proposals,” Hochul said near the end of the speech, drawing chuckles from the gathered New York legislators.

And yet, after all that time and all those words, she never mentioned a source of state revenue she has pushed aggressively since taking over from Andrew Cuomo two years ago: New York City-area casinos.

With more than a billion dollars potentially pouring into the state as soon as the end of 2023 through the awarding of three downstate casino licenses, it might seem odd she wouldn’t mention a key source of revenue for education projects and other proposals, but the omission might not have been accidental.

The New York Gaming Facility Location Board, part of Hochul’s administration through the New York State Gaming Commission, issued a Request for Applications on Jan. 3. to solicit casino proposals. The governor’s silence on the topic might indicate she’s trying to stay out of the way for now as the process finally begins moving.

“I think they want the siting board to have as much autonomy as possible,” said Nick Antenucci, a senior counsel for the Davidoff Hutcher & Citron law firm who analyzes the gambling industry. “I don’t think they want to have any ‘political’ influence over the process where you have politicians looking like they made the decision.”

Awaiting responses from RFA

This moment is a particularly sensitive one in the process to pick casino sites as the board awaits responses from developers and casino operators. In the unanimous vote to issue the RFA, the three seated board members also set a minimum capital investment and license fee for applicants of $500 million each.

By state law, a separate Community Advisory Committee for each of the neighborhoods and cities involved will review the applications. The board set a due date of Feb. 3 for interested parties to answer the first round of questions.

The old saw that all politics is local may come into play here, as many observers expect the community committees to have far-reaching powers in this process. That was the case eight years ago when one of the upstate licenses was expected to go to Saratoga Casino & Raceway before a majority of voters in Saratoga County and Saratoga Springs voted against expanding casino gambling in the area to allow Las Vegas-style games.

Also, powerful state legislators could hold serious sway in the process. For example, Joe Addabbo, the chairman of the Senate Racing, Gaming and and Wagering Committee, has long been supportive of the Aqueduct racino in Queens, and J. Gary Pretlow, chairman of the Assembly Racing and Wagering Committee, figures to defend the Yonkers racino in his district from cannibalization by those looking to build too close for MGM’s comfort.

“Local support is going to be key here,” Antenucci said. “If the community board comes out and opposes a proposal, that’s going to be a significant pill for somebody to overcome.”

Plenty of interested parties

Among the most prominent proposals thus far are plans by Caesars and New York City mega-developer SL Green to build a casino in a high rise on Broadway in Times Square; Mets owner Steven Cohen’s push to build a casino near Citi Field in Willets Point of Queens; the Wynn bid in conjunction with Related Companies to build at Hudson Yards in Midtown Manhattan; and the Thor and Saratoga Casino Holdings proposal to build in Coney Island.

Antenucci points out that the upstate casinos, which went through a similar process before 2015, aren’t producing the revenue New York leaders promised when they were working through a similar process eight years ago.

“I think the downstate casinos will perform much better than in upstate, but you can’t ignore that the upstate casinos, which were supposed to be cash cows, are only operating at 35 to 40 cents on the dollar as promised, if that,” Antenucci said.

Thus far, the higher license fee for the downstate casinos and the high tax rates for casino games throughout New York don’t seem to be scaring off applicants. Within minutes of the RFA being issued, many of the top players issued press releases announcing their plans to answer it.

If Aqueduct and Yonkers both secure licenses, as many people expect, that means that only one license is truly at stake. That adds urgency to the process, as many of the top casino operators have long viewed Manhattan as the final jewel in their portfolios of properties.

“What you could actually put in Manhattan is anybody’s guess, but New York City and particularly Manhattan has been the target of almost every major operator since I can remember,” Antenucci said.

Photo: Patrick Oehler/USA TODAY


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