New York regulators are unlikely to award three downstate casino licenses next year, likely pushing the matter off to 2025 as the state extends its reputation as “the circus” of casino politics.
That’s the sentiment of B Global Advisors Brendan Bussmann. In a new report by way of Truist Securities, Bussmann comments on the gaming political landscapes in several states, including New York. The awarding of three New York City-area casino licenses is already moving at a glacial pace, making Bussmann’s 2025 timeline plausible.
One has to wonder how long the second phase of this initial stage will take, let alone the subsequent stages that arguably are more challenging and daunting over several multi-billion projects,” wrote the analyst.
He added another potentially larger surprise is looming: Genting and MGM Resorts International might not be sure bets to capture two of the three downstate licenses.
Scandal Erodes Genting, MGM ‘Favored Nation’ Status
In 2022, New York lawmakers approved three downstate casinos. Since then, it’s been widely speculated that gaming companies are essentially vying for one license because MGM’s Empire City Casino in Yonkers and Genting’s Resorts World New York in Queens were expected to be “grandfathered” in to receive two of the permits.
However, Bussmann notes that Scott Sibella’s alleged role in an illegal sports betting ring could weigh on those operators’ efforts to win New York casino permits. Sibella has ties to both companies. He was fired by Resorts World Las Vegas last month and previously served as president of MGM Grand on the Strip for a decade.
Bussmann pointed out that the “favored-nation” status of Genting and MGM has eroded on the back of the Sibella scandal. That could open the door for the likes of Caesars Entertainment, Las Vegas Sands, and Wynn Resorts, among others, to emerge victorious in New York. One thing is clear: things won’t be easy in New York.
The B Global founder cautioned about “a drawing of straws between real estate moguls, a politically juiced process” and “an inflated race to the bottom as we have seen with sports betting’s tax rates.”
Speaking of New York Gaming Taxes…
Bussman added that the third ring of the circus in New York is the possibility of iGaming coming to life. The legislature could take up that matter next year. Should the state approve online casinos, that would be to the liking of online sportsbook operators that are enduring New York’s 51% tax rate, the highest in the country.
However, the B Global analyst said that if iGaming is approved in New York, it’ll likely be with a similarly onerous tax rate.
“While the circus will be in town for some time, the only things that are consistent is that it is New York’s money, not the people or operators’ money, that actually make things move in the Empire State,” he opined.
With New York bleeding population, due in part to high taxes, the state needs alternative revenue sources as its income tax pool dwindles. Gaming can provide that revenue, indicating there could be some legislative momentum for internet casinos next year.
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