Licensees to pay $500M+ in fees

New York State officials approve rules for casino license bidding process

Reading time 3:41 min

New York State officials have released the criteria they will use to determine how up to three new casino licenses will be awarded. The operators awarded licenses to run any of the New York City-area properties will have to pay the state at least a $500 million fee for the permits, according to the rules the New York Gaming Facility Board approved on Tuesday.

The request for applications document was greenlighted by the board at its latest meeting in New York City. Rules indicate applicants will be scored based on their potential economic activity, impact on the surrounding communities, workforce and responsible gaming plans, and their commitments to diversity.

The economic impact factor will be the biggest priority, as it is 70% of an applicant’s score, notes The Center Square. Any development proposed must have at least a $500 million capital investment, although it must be noted many projects that have already been proposed far exceed that total.

The hefty $500 million license fee is to be paid within 30 days of the award of the license, the rules further mandate. But the fee may turn into a more pricey bidding war, separating well-resourced contenders from smaller competitors, points out New York Post. “An applicant may propose to pay a higher license fee,” the siting board said.

Times Square, one of the locations being proposed for a casino

The initial casino licenses will run from 10 years to 30 years based on the investment of the winning bidder. The rules particularly emphasize capital investment, “maximizing state and local revenues,” providing the most jobs and creating the “highest caliber” casino with an array of amenities.

The board has not yet issued a formal deadline to submit license applications. Instead, it has opened a window until February 3 for questions from interested parties, which would then be followed by a second round of questions. The formal submission deadline for applications would be 30 days after the board releases answers to the second round of questions.

While the board is tasked with recommending which casino projects should be licensed, it is one of many steps in the process. Applicants must also secure two-thirds support from a local board, which includes appointees from Gov. Kathy Hochul, local officials and state lawmakers. Moreover, projects must also obtain local zoning approvals.

Gov. Kathy Hochul

Because of the community review process, and the two rounds of questions to be launched by the board, it is unclear when a final decision will be made on the awarding of casino licenses. However, insiders quoted by New York Post expect the awards to be made by year’s end.

The casino licenses became available after they were included in the budget state lawmakers passed in 2022. They are the remaining licenses from a 2013 constitutional amendment voters approved to allow the state to offer seven licenses. The remaining permits are to be awarded to downstate developments.

State lawmakers approved issuing the licenses a year earlier than initially planned because of the impact the Covid-19 pandemic had on the state’s economy. Proponents claim the new casinos would help add jobs to the hospitality sector, which took a substantial hit over the last couple of years.

Revenue from new gaming facilities is expected to generate substantial fiscal benefit to New York’s public schools, local governments and problem gambling treatment services,” the board said in a statement. “The jobs created by these casinos must deliver livable wages to help families live, stay, and prosper in New York.”

Bidders react to the solicitation for new casinos

Stakeholders seeking to obtain one of the three casino licenses were quick to react to the news of the application rules being announced. Among them are the parties behind a $3 billion plan to build a casino resort at Brooklyn’s Coney Island, which confirmed they will submit their proposal for consideration.

“We are so excited to be working with Legends, The Chickasaw Nation, and Saratoga Casino Holdings to bring together the perfect combination of expertise, hometown pride, and commitment that will make Coney Island New York’s new beacon of economic opportunity,” said in a statement Melissa Gliatta, COO of developer Thor Equities.

View of Coney Island

For more than a generation, Coney Island has been waiting for a year-round economy that creates not just jobs — but careers. Our partnership is unique, combining unrivaled gaming expertise, an unsurpassed track record in entertainment, and a commitment to serving the local community like no other,” the Coney Island consortium further stated.

The owners of the existing slots parlors at the Aqueduct race track in Ozone Park, Queens and Yonkers race trackGenting’s Resorts World and MGM’s Empire Cityare expected to submit bids, which would expand their current offerings to include table games.

Meanwhile, Mets owner Steve Cohen is reportedly eyeing a casino near the team’s Citi Field in Willets Point, Queens, and has been meeting with city staff to garner support for his plan. A 25,000-seat professional soccer stadium is also planned in the vicinity.

Other firms planning bids to operate a casino include the Related Companies and Wynn Resorts partnership for Hudson Yards; and the SL GreenCaesars Entertainment proposal for a Times Square casino.

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