New York state lawmakers have approved an accelerated timeline to bring three additional Las Vegas-style casinos to New York or nearby communities, a move that will spark a bidding war between the biggest corporations of gambling in the world who wish to exploit a huge potential and lucrative market.
In a major lobbying victory for the horse racing industry, the new budget contains financial protections to ensure there will be no reduction or elimination of revenue-sharing payments that now go to operators of video lottery terminals if these facilities obtain licenses to become full-fledged casinos.
Some lawmakers believe an advantage is held in the upcoming bidding process by operators of existing video lottery terminal casinos to Aqueduct Racecourse in Queens and the MGM-owned video lottery terminal and harness track in Yonkers in the Westchester County suburb. The reason given: they already have large VLT gaming facilities and can grow their sites into full-scale casino operations faster with additional equipment.
The new state budget, which lawmakers approved on the night and morning of April 9 in Albany, calls for each of the winning bidders for the three remaining commercial casino licenses to pay the state at least $500 million. dollars in license fees. That’s half of what the industry and some lawmakers recently believed the state could get from anxious developers seeking to bring Las Vegas-style casinos to the nation’s largest population center.
It was unclear how the state ended up with the projected $500 million licensing fee arrangement.
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The agreement includes financial protections for funding streams from scholarships and breeding and development funds for the aqueduct, Belmont Parkand Saratoga Racetrack. It also includes payments for capital expenditures and NYRA operations.
The final budget deal, which was reached on the evening of April 8 in Albany and was passed by both houses hours later, would maintain racing financial support payments from video lottery terminal casino proceeds – in the event that an existing VLT facility, such as those at Aqueduct and Yonkers, obtains a full new casino license, at the same levels as 2019. Annual adjustments would be made based on the Consumer Price Index.
The casino legislation is a significant victory for the racing industry, which has been criticized by animal rights groups and some lawmakers who wanted the state to end subsidy payments that run from existing VLT casinos. , such as Aqueduct, to stock exchanges and breeding funds. Last September, a coalition was formed, called We Are NY Racing, made up of unions, businesses, trade groups and others, to push back against the growing criticism the industry was receiving from various entities and lawmakers.
Officials note that there is nothing in existing state law that would have ensured the continued flow of money if a VLT casino was converted into a full-fledged casino, as Aqueduct and Yonkers seek to do. .
The New York Racing Association notes that the new casino measure ensures the flow of money will continue for things like purses. Maintaining payments at 2019 levels is important, officials said, as it was the highest year on record for SUV support payments to the racing industry. Further protections are included in the new budget to ensure that these payments increase to levels of the annual inflation rate.
Patrick McKenna, NYRA’s vice president of communications, said the new state budget “clearly recognizes the importance of horse racing to New York State’s economy.”
“Overall fan interest in and commitment to racing in New York has never been stronger, and the continued support expressed by Albany lawmakers will only strengthen the sport’s role as a driver of economic opportunity that creates jobs in every corner of the state,” McKenna said. in a written statement Saturday morning.
The final budget agreement advances the timeline for the state to award the remaining three commercial casino licenses by at least a year under a deal from a decade ago that approved a total of seven new ones. in-state casinos; four of the casino licenses were previously awarded to upstate venues, but the casino industry is aiming for the jackpot: New York.
The legislation sets up a process for selecting the final three casino sites in the New York area. Some believe that the Aqueduct facility, run by Resorts World, and the Yonkers facility owned by MGM, will be able to more easily convince a site location panel to select them because they already operate as casinos, but not with real slot machines or table games. , like poke.
If the backers of these two operators are right, that leaves the real bidding battle for any range of sites on offer, from midtown Manhattan to the outer boroughs. The final budget agreement calls for some level of “community advisory” involvement, which would include representatives of the Legislative Assembly, as well as license terms of at least 10 years and no longer than 30 years.
Technically, future casino facilities may be located in New York, Long Island, and three suburban counties north of the city. Public hearings on the proposals must be held and a local panel must approve a casino site plan before it is sent to a state agency for review. Local zoning laws would apply and there would be a minimum tax rate of 25% on slots and 10% on table games. It would set annual payouts to support gambling addiction education and treatment programs at $750 per slot machine.
Race to the aqueduct
Casino entities, to apply, must meet a variety of criteria to apply, including demonstrating community support for their plan, paying the state $1 million to apply, and waiving the right to sue the state to recover proceeds. fees paid.
The legislation, which was passed by both houses of the New York legislature as part of a wave of state-approved budget bills, calls for the creation of community “advisory” committees. For New York City, such a council will consist of six members: one appointed by the governor, one senator, one member of assembly, one borough president, and one member of city council representing the area where a casino is located. proposed to be located. The mayor of the city also gets a representative on the board of directors.
The State Gaming Commission, which will ultimately select the winning bidders, must issue requests for bidder nominations within 90 days of the selection of the majority of members of a local Community Advisory Board. The commission will also set a minimum capital investment for each of the three remaining casino licenses, which could include anything the state wants developers to invest in a casino, hotel and other amenities. A separate sitting committee will be created to review and make recommendations for the various casino applications that are expected for the downstate region.
Senator Joseph Addabbo, a Democrat from Queens who has previously indicated support for awarding the Aqueduct and Yonkers racetrack facilities to two of the three future licenses allowed under the new measure, called the casino provisions a “gain for New York State and the local”. communities where these licenses will go.”
Addabbo, chairman of the Senate Racing, Gaming and Betting Committee, said the additional revenue for the state, including the $1.5 billion in license fee payments by the three future winning bidders, “we will significantly fund important education and gambling addiction programs.”
The senator said lawmakers, going forward, will continue to play a role in the casino process, including his desire to “ensure that the settlement process is credibly implemented.”
Casino expansion has been influenced by an army of lobbyists hired by the casino companies, as well as politically powerful labor unions.
Resorts World New York City, which operates the VLT casino in Aqueduct, said it was eager to “step forward” and secure full casino management rights to the runway. “We are ready, willing and able to immediately double our workforce by adding over 1,000 new union jobs and helping the true potential of resort-style gaming, entertainment and hospitality to be realized right here in the heart of Queens. “, said the company. said of the new state budget casino deal.
New York approved seven commercial casinos ten years ago. The first four were located in the upstate regions, but a moratorium was placed until 2023 on the development of the remaining three licenses aimed at downstate markets. The new budget speeds up the downstate casino schedule by a year.