ALBANY, N.Y. — With New York’s upstate casinos struggling, some state officials are considering the once unthinkable: putting casinos in New York City itself.
Representatives from major gaming companies have been meeting this week with lawmakers in Albany, including Assembly Speaker Carl Heastie, to push a proposal to open as many as three full-fledged casinos in the New York City area.
They say that such a move could provide the state hundreds of millions of dollars each year in new revenue and create thousands of new jobs, an argument that has been given extra heft by the collapse of the Amazon deal in Queens, and the ongoing effort to find a financial cure for the city’s decrepit subways.
Under one proposal, Aqueduct Raceway on the Queens border with Long Island and Yonkers Raceway would be converted from so-called racinos into full gaming operations. In another, the state would open bidding for up to three casino licenses, clearing the way for a new gambling hub to be built elsewhere in New York City, likely outside of Manhattan.
The chairmen of the Assembly and Senate gaming committees have thrown their support behind the idea of bringing gaming to New York City. Gov. Andrew Cuomo has not closed the door altogether, but he has expressed deep skepticism about an accelerated plan to expand gambling in the state. Leader of the Senate Democrats Andrea Stewart-Cousins has not publicly stated a position about new casinos, but Heastie has been historically cool to the idea.
The companies have proposed paying upstate casino operators about $100 million to counteract the loss of exclusivity — New York had agreed not to issue any more casino licenses until 2023. The three companies also have expressed a willingness to pay the state at least $500 million each to operate in the downstate market.
Assemblyman Gary Pretlow, a Democrat from Westchester County who leads the Racing and Wagering Committee, was impressed by the amount of money being floated — “They are offering $500 million each,” he said — adding that such a windfall could improve the state’s finances immediately. “It could go into this year’s budget,” he said.
The upstate casinos are seemingly on board with the expansion plan. But it still faces an uphill slope in Albany, particularly among liberal Democrats in the state Assembly who view gaming as a regressive tax.
Cuomo has said he remained “dubious” of any plan to open new casinos before 2023, but he did not outright reject the possibility of expanding casino gambling, giving hope to plans like those backed by Las Vegas Sands, owned by Sheldon Adelson, a prominent supporter of Republican politicians and President Donald Trump. Sands is seeking to open a new luxury casino in New York City, and the company has enlisted former Gov. David Paterson to advocate on its behalf.
“I think, in an iconic city like New York, to have an iconic structure, would be another, really beautiful, tourism destination,” Paterson said in an interview, adding that he wished someone had proposed it when he was in office and “we had a $21 billion deficit.”
Paterson was referring to shortfalls in the state budget, which is due April 1. Projected income tax revenue is lower, and agreements to create other revenue streams for the state, including legalized marijuana and congestion pricing, are facing opposition. The looming shortfalls led the governor and legislative leaders last week to signal an accord on a pied-à-terre tax, which will target superluxury second homes in New York City.
There is also external pressure from neighboring states, as New Jersey continues to embrace and expand betting, and intrastate support: In Yonkers, Mayor Mike Spano signaled support for allowing live-dealer table games at the Empire City casino, which, like Aqueduct, currently only has video lottery terminals, which resemble slot machines. So did the Business Council of Westchester, which said the effect of Empire City “cannot be overstated.”
MGM Resorts, which owns Yonkers Raceway, and the Genting Group, a Malaysian-based conglomerate that runs the Resorts World racino at Aqueduct, have stressed the speed with which they could transform their current operations in Yonkers and at Aqueduct Racetrack into full-fledged casinos, arguing they could be up and running within months, as opposed to the years it might take for an outside company to start from scratch.
“Resorts World is a proven operator ready to move immediately once given the authorization,” said Michael Levoff, a spokesman for the Genting Group, noting that the Aqueduct casino had been operating in Queens for seven years, and generated “over $2 billion in much-needed revenue.”
Sands, meanwhile, seems to be banking on the appeal of construction and other union-friendly jobs. The company is already negotiating agreements with at least two major unions, including the Building Construction and Trades Council, whose president was one of the authors of an op-ed in early March that advocated for an expansion of casinos downstate as a way to provide “new revenue to improve public transit service, fund public education, and other New York priorities.”
The argument in favor of expansion was echoed in a letter sent to Cuomo by the Business Council of New York, a frequent ally of his, arguing that it would add up to “$1.5 billion in much-needed immediate revenue,” though the council said it was opposed to the idea of “any quick-fix approach to convert existing racinos.” The process, it said, should be opened to bidding.
The state has had a staggered and at times stalled approach to gaming. Its first casinos in the modern era came after Supreme Court decisions in the 1980s and 1990s affirmed the right of Native American tribes to run such franchises and a 1993 compact with Mario Cuomo, who was governor at the time. The state’s racinos began to open in 2004 and have expanded to nine locations, including Aqueduct and Yonkers.
In 2013, Cuomo doubled down, signing legislation to allow seven full-fledged casinos, despite warnings about saturation in the gaming market. At the time, the governor promised such facilities were designed to benefit upstate before downstate, assuring no casino license would be granted anywhere near New York City until 2023.
But all four newly licensed casinos — Resorts World Catskills Casino in Monticello, New York; Rivers Casino in Schenectady; the del Lago Resort and Casino, in Tyre, a small town southeast of Rochester; and Tioga Downs Casino Resort, west of Binghamton — have missed their own projections for earnings. Trouble signs are easy to find: Del Lago has been warned about its debt, while Empire Resorts, which owns the Catskills casino, also reported large losses last year.
Cuomo has already signed off on allowing the four upstate casinos to offer sports wagering inside the facilities, though he has balked at permitting mobile sports wagering, which New Jersey has embraced.
But the governor seemed to recognize the potential of a New York City casino, suggesting that such a facility, if opened to competitive bidding, could drive up the price far higher than the $500 million each currently being floated by MGM and Genting.
The appeal for the casino companies is clear: untold numbers of potential customers, including the 65 million tourists who come to New York City every year.
“You’ve got massive population, not only in New York but in surrounding states,” said Ron Reese, a spokesman for Sands. “And that’s really what drives the success of these multibillion-dollar casino resort properties.”
Indeed, Cuomo characterized a New York City casino as “the golden franchise” for gaming.
“If you were to go there, and I’m not even sure I would go there,” the governor said, about such a plan, “it would have to be through a competitive bidding process, so we made sure New Yorkers got the best price.”