Is New York moving closer to adding NYC-area casinos? Here’s maybe why

Joseph Spector

| New York State Team

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Empire City Casino reopens

Empire CityCasino in Yonkers reopened Sept. 21, 2020 after being closed since March due to the coronavirus shutdown.

Peter Carr, [email protected]

ALBANY – First, Gov. Andrew Cuomo’s budget last week quietly proposed letting companies interested in New York City-area casinos to submit preliminary plans.

Then, late Friday, an eagerly anticipated consultant’s report on the future of gambling in New York appeared unannounced on the state Gaming Commission’s website — more than a year after it was originally expected.

The big findings? State revenue of $500 million to $800 million a year is possible if the state allows racetracks with video-lottery terminals in Queens and Yonkers to become full-scale casinos and/or allow for new casinos in New York City.

The two developments might signal a willingness by Gov. Andrew Cuomo to lift a moratorium on new casinos in place until 2023 because the state needs new revenue to close a $15 billion deficit over the next two years due to the COVID-19 pandemic.

There are a variety of possibilities if the state were to move forward this year with allowing three remaining casino licenses to be granted after seven were authorized by voters in a 2013 referendum. Four are already open in upstate New York.

The state Legislature and Cuomo could allow Resorts World New York City at Aqueduct Racetrack and Empire City at Yonkers Raceway to switch to full casinos with live table games and slot machines.

Then it could grant a license to a new development in the city, perhaps in midtown Manhattan or western Brooklyn, which were scenarios studied in the state-funded report by Spectrum Gaming Group. Or it could pursue some combination of those options.

Cuomo has been reluctant to lift the casino ban, but the well-funded gambling interests are eager to make another pitch this year in Albany.

At stake: New York City represents the largest untapped casino market in the nation.

Just allowing Resorts World and Empire City to switch to casinos and letting upstate casinos add mobile sports betting could bring in $2 billion this year to the state’s coffers, estimated Jeff Gural, who owns Tioga Downs Casino in the Southern Tier and the Meadowland Racetrack in northern New Jersey that has mobile sports betting.

“I think it’s a no brainer,” Gural said.

Will 2021 be the year for downstate casinos?

There is big money at play.

Downstate casino developers have previously proposed $500 million each to the state for a casino license. They also offered to pay millions of dollars to the four upstate casinos — in the Finger Lakes, Schenectady, the Catskills and Tioga Downs — if the 2023 moratorium is lifted early.

But their efforts in recent years have been rebuffed by the state Legislature and Cuomo because of concerns over expanding gambling and infringing on the competitive advantage now enjoyed by the upstate casinos.

Still, 2021 might bring a change in thinking: The state is desperate for new money to climb out of its budget hole; Cuomo wants the state Lottery to run mobile sports betting; and the existing casinos are struggling because of the pandemic, which forced the state to shutter their doors for months last spring and summer.

So enter downstate casinos, potentially.

“As Governor Cuomo has rightly pointed out, New York is facing extremely challenging economic times and must find ways to build a new future together,” Resorts World New York, which owns Resorts World Catskills and Aqueduct, said in a statement.

“We are ready, willing and able to advance that partnership in the short- and long-term and look forward to continuing to work to elevate our support for New York.”

More: Will New York add new casinos? Here’s what Cuomo just said about it

It wouldn’t be the first time New York looked to a gambling expansion amid a crisis. After the 9/11 terrorist attacks, then-Gov. George Pataki got the Legislature in 2001 to approve the largest gambling expansion in state history by letting racetracks add video-lottery terminals.

It was a boon for the tracks and the state budget.

Now gambling companies are hoping for another round of expansion. MGM Resorts bought Empire City in 2019 with the hope of being able to make it a full-scale casino and add amenities, such as a hotel and entertainment venues.

“MGM Resorts remains focused on developing Empire City into its full potential with the opportunity to create thousands of jobs to allow us to bring back our full workforce and make new hires, as well as generate millions in new tax revenue by securing a full-scale casino license that allows for live dealers and through retail and mobile sports betting,” Empire City said in a statement.

More: How VLTs saved NY horse racing

More: MGM Resorts has huge plans for Empire City Casino in Yonkers. But it needs this first

What happens next?

Cuomo has yet to show his hand on whether he would allow downstate casinos sooner rather than later.

But there are several potential tea leaves to read.

The Democratic governor’s budget proposal includes a line that “authorizes the Gaming Commission to issue a request for information for the purpose of soliciting interest regarding the three unawarded gaming facility licenses authorized by the State Constitution.”

So that would be the first step in moving toward downstate casinos. And supporters will also be armed with the state study that shows major revenue if the casinos open.

There are two other pieces of Cuomo’s proposal that are also telling.

One piece would allow the upstate casinos to petition the Gaming Commission to lower their tax rate on slot machines — something that del Lago in the Finger Lakes and Rivers in Schenectady both previously sought without success.

But a lower tax rate might be part of a trade off in negotiations this year.

Cuomo is also proposing to have the state Lottery, not the casinos, run mobile betting — which is a major untapped market. Sports betting is only allowed in New York onsite at the four upstate casinos.

New Jersey casinos hit a record of nearly $400 million in sports wagering in 2020, up 33% from 2019, mainly because of online betting, records show.

Cuomo estimated New York could bring in $500 million a year from mobile sports betting, but wants it state-run.

“I’m with the people, and I believe the people of the state should get the revenues,” Cuomo said in a State of the State address Jan. 19.

“This is not a money-maker for private interests to collect just more tax revenue. We want the actual revenue from sports betting.”

But casinos want a piece of the mobile sports betting pie, setting up a budget fight for the fiscal year that starts April 1.

For now, though, casinos are pleased that new gambling options are being considered in Albany. And they’ll have months to make their case at the state Capitol.

“Like almost every business throughout the country, we are facing significant financial challenges as a result of the pandemic,” Lance Young, general manager of del Lago, said in a statement.

“Governor Cuomo has put forth a robust gaming package in his Executive Budget, and del Lago Resort & Casino is enthused by his focus on our industry as a tool to help revive New York’s economy.”

More: Why this quiet decision on the future of New York casinos may have a big impact

More: Casinos set to reopen in New York. What to know before you go

Joseph Spector is the Government and Politics Editor for the USA TODAY Network’s Atlantic Group, overseeing coverage in New York, New Jersey, Pennsylvania, Maryland and Delaware. He can be reached at [email protected] or followed on Twitter: @GannettAlbany

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