On his company’s fourth-quarter earnings call last month, Caesars Entertainment CEO Tom Reeg shared that while he believes his group has the best proposal to build a New York City-area casino, the company isn’t going to sell out just to gain a foothold in the heart of the Big Apple.
Caesars is partnering with developer SL Green and Jay-Z’s Roc Nation entertainment agency to propose a Caesars Palace Times Square in a high-rise at 1515 Broadway. It was among the earliest, and remains among the most high-profile, proposals to emerge as the New York State Gaming Commission continues to work through the process.
Reeg said he believes New York will begin awarding licenses by the end of 2023. Three are up for grabs, but racinos at Yonkers and Aqueduct have speed-to-market advantages and many consider them near-locks. He also indicated Caesars wouldn’t overspend to satisfy state bureaucrats looking to maximize the project’s impact on local economies.
“I can assure you we’re not going to be the one who wins because we built the biggest housing development outside of our casino,” Reeg said on the call. “We’re going to win this on the merits of the property and how quickly we can get open and how well it fits into the local environment. If it becomes an arms race of who’s going to spend the most money, we won’t win.”
Another casino group proposing to build at Freedom Plaza near the United Nations building on the East Side of Manhattan was a bit surprised by the fact that New York Gov. Kathy Hochul didn’t project revenues from any of the casinos to come pouring in until 2026, effectively slowing a process she had appeared to accelerate just one year earlier.
Michael Hershman, CEO of the Soloviev Group, which owns the pricey land where the project would be built, said it “certainly” looks like Hochul has slow-trained the casino process. The Gaming Facility Location Board, which will have far-reaching input on which projects get picked, still only has three of five members seated and the gaming commission has yet to announce the formation of local siting boards, which will also play an important role.
“There are just so many unanswered questions about the process,” Hershman told US Bets. “I think it’s fair to say the deadline, if there is one, will extend well beyond 90 days”
Process slows considerably
Applicants submitted questions regarding the gaming commission’s Request for Applications earlier this month and they still await answers from the board. After that, applicants will submit another set of questions, which will be due 30 days after the initial answers come back.
“I’d love to expedite that time frame,” said Sen. Joe Addabbo, the chairman of the New York Senate’s Racing, Gaming and Wagering Committee, when discussing Hochul’s 2026 projections for downstate casino revenues.
Addabbo has countered Hochul’s proposal to earmark casino money for the struggling Metropolitan Transit Authority with the idea of instead using that revenue for mass transit at large. That presumes the state legislature votes to pass a bill he has introduced to legalize iCasino in New York. Addabbo is hosting a public roundtable on iCasino next week in Albany.
Whether Hochul is pumping the brakes on the casinos or merely being conservative in her time estimates is hard to say. Negotiations can continue up until the April 1 deadline to approve the fiscal year budget. Expect Addabbo and other legislators who have expressed interest in expanding gambling offerings in the state to continue to try to expedite their movement.
Addabbo still sees Hochul as open to expansion
When Hochul became governor after Andrew Cuomo resigned in 2021, legislators like Addabbo and industry executives were hopeful Hochul would be more open to expanding gaming than Cuomo had been. Hochul defeated Republican Congressman Lee Zeldin in the New York governor’s race last year, her first election to the post.
Addabbo said he still would rather work with Hochul’s office than Cuomo’s when it comes to gambling matters in New York.
“I think it’s moving forward in a very methodical, very educated way,” Addabbo said. “You want to make sure you don’t open the state to any kind of legal issues. You want to proceed in a very educated, cautious way. I have no problem with that. At least with this administration, as opposed to previous administrations, we can talk about gaming issues.
“Previously, we couldn’t even talk about them. It took a COVID pandemic and a $15 billion deficit to even get mobile sports betting out of the previous governor. I really welcome the Hochul administration and its willingness at least to talk about these gaming issues. She’s been really good on them, she really has, but I hope she sees it as a benefit to the state.”
Photo: Andrew Harrer/Getty Images