4 NYC Casino Plans Made It to the Final Round. What Happens Now?

New York is advancing its process to award up to three downstate casino licenses by year-end, with four major proposals from Bally's, Steve Cohen/Hard Rock, Genting Group, and MGM Resorts currently under consideration. Each winning bidder will pay a $500 million license fee and commit to at least $500 million in capital investment, with gaming revenues subject to a minimum 10-25% tax rate. While the Citi Field proposal projects the highest revenue at $3.9 billion by its third year, existing racinos from Genting and MGM offer faster operational timelines and face less community opposition. The selection criteria prioritize state revenue maximization and job creation, though a state comptroller's report on upstate casinos cautioned that revenue projections are not always met, highlighting potential risks despite significant projected economic benefits.

Analysis

New York is progressing towards awarding up to three downstate casino licenses by year-end, with four major contenders: Bally's (BALY), a joint venture involving Steve Cohen and Hard Rock, Genting Group, and MGM Resorts (MGM). Each selected licensee faces a substantial $500 million fee and a minimum $500 million capital investment, alongside a 10-25% tax rate on gaming revenues. This process highlights significant investment opportunities in the state's gaming sector.

The Citi Field proposal, backed by Steve Cohen and Hard Rock, projects the highest revenue, estimating $3.9 billion by its third year and $850 million in state/city tax revenue, but faces a longer operational timeline (earliest 2030) and considerable community opposition. In contrast, existing racinos from Genting (Resorts World NYC) and MGM (Empire City Casino) offer faster operational ramp-ups due to their current gambling facilities and have encountered less community resistance. Lobbying expenditures varied, with Citi Field spending $1.8 million, Genting $1 million, and Bally's $900,000.

The Gaming Facility Location Board will prioritize proposals maximizing state revenues, job creation, and offering a fast construction schedule, while the State Gaming Commission ensures compliance with financial and operational integrity. However, a state comptroller's report on upstate casinos cautioned that initial revenue and tax projections were not met, suggesting "local gaming revenue is not always a 'sure bet.'" This historical context introduces uncertainty regarding the ambitious revenue forecasts.

Key Decisions for Investors

• Investors should closely monitor the final license awards by year-end, as selection will significantly impact the financial outlooks of the winning entities, particularly BALY and MGM.
• Evaluate the operational timelines and community opposition levels of each proposal, as existing racinos (Genting, MGM) may offer faster revenue generation and lower execution risk compared to new developments.
• Critically assess the ambitious revenue projections from all applicants, especially for new builds, given the state comptroller's historical caution regarding unmet forecasts for upstate casinos.
• Factor in the substantial $500 million license fee and minimum $500 million capital investment, which will represent significant financial commitments for the successful bidders.