Anticlimax Ahead In The Epic New York City Casino Licensing Wars?

The battle for three New York City-area casino licenses has been going on for more than two years, and it looks as if it may last another 18 months or more.

Multi-billion dollar projects have been touted next to New York Mets owner Steve Cohen’s Citi Field; at Hudson Yards near the Jacob Javits Convention Center; a Caesars plan for Times Square; another near the United Nations; and others in The Bronx, at Coney Island, or adjacent to Nassau Coliseum on Long Island.

But by the end of a one-hour panel at The Racing and Gaming Conference at Saratoga Springs, New York, this week, it became clearer that a rather mundane result may occur — and not until the end of 2025, at the earliest.

And that would be, simply upgrading the Yonkers Raceway in Westchester County and Aqueduct Raceway in Queens from horse racing track/slots parlors into full-fledged casinos.

That would be a huge win for MGM and Genting — the owners of the racinos — and net the state a combined $1 billion in one-time licensing fees.

But it would be a letdown to a casual observer who was curious where in The Big Apple — specifically, Manhattan — a casino would be located. Because moderator and conference organizer Patrick Brown and his five speakers laid out how and why the entire much-ballyhooed bidding war may collapse on itself.

Community (puffs its) chest

A key element is the fact that any bidder must curry favor with two-thirds of a “Community Advisory Committee” even before a “Gaming Facility Location Board” of five Gov. Kathy Hochul-appointed members could consider the application. 

Historically across the U.S., an established gambling site such as a racetrack does not face significant public opposition to gambling expansion. But introducing a casino — especially a multi-billion dollar behemoth — is seen by many elected officials as political suicide. 

Even if and/or when stereotypical fears of petty crime and prostitution don’t pan out (and incidentally, legalizing prostitution is currently more popular in New York’s Senate District 15 than legalizing iGaming), the lawmakers who supported construction will be many years out of office — and power — by the time the project is seen as a net positive for the community.

No one knows more about New York City real estate or the state casino licensing process than business mogul Jeff Gural, who operates the Tioga Downs casino — one of the four commercial casinos that have opened in upstate New York — as well as the Meadowlands Racetrack, the most iconic harness racing site in the world.

“How will they ever find three places that no one objects to?” Gural asked Casino Reports just after the panel had concluded.

Gural chuckled at recalling the fact that a state official was taken aback by a public hearing for the Tioga Downs proposal that included no “massive opposition” from the community. That’s because like Yonkers and Aqueduct, Tioga already was a racino before applying for an upgrade.

Brown introduced New York Assemblyman Gary Pretlow — who happens to represent the Yonkers area — as “the architect of casino legislation” for the state 11 years ago, which initially only envisioned four upstate commercial casinos.

Pretlow expressed appreciation for the compliment but added, “But those of you in the building business know that you can design something, but then the higher-ups put in ‘change orders.'” Pretlow joked that while he designed a “horse,” subsequent changes turned his plan into a “camel.”

He explained that his original vision was for “small, intimate casinos” upstate a la downtown Las Vegas rather than glitzy Strip properties.

“I didn’t envision forcing individuals to build monstrous, cavernous hotels by spending money to go into deep debt, which is what happened,” Pretlow said. “It was detrimental to the state of New York.”

Similarly, Pretlow’s 2022 legislation with ally state Sen. Joseph Addabbo Jr. for three New York City-area casino licenses has morphed into giving local elected officials seemingly unlimited veto powers, no matter how many billions of dollars are listed in the price tag.

No-brainers and no-chancers

The rampant public speculation that Yonkers and Aqueduct — which is within the purview of Addabbo’s district — were “no-brainers” for two of the region’s three licenses has actually delayed the bidding process, Pretlow suggested.

“The powers-that-be want to show an appearance that all bids are on equal footing,” Pretlow said. “Some of the bids are far behind, so we’re now waiting for whomever is last to get their act together to make it a better matchup. Millions of dollars are being spent, when most bidders won’t wind up getting a license. The idea seems to be that whomever does get a license, the state is less open to a lawsuit as to it being unfair as to how those licenses were issued. I am totally frustrated in trying to get this process off the ground.”

Tim Drehkoff, the CEO of Rush Street Gaming — with a casino empire that includes Rivers Casinos in Philadelphia and Schenectady — and Suffolk County OTB CEO Phil Brown each said that casinos in New York City would not severely harm their bottom lines. But with the lone Long Island proposal near Nassau Coliseum still in play, Brown drew laughs for suggesting that the pace of casino licensing planning actually was moving at faster than he would like.

Gural, the Meadowlands track owner, has more at stake given the site’s proximity both to Manhattan and to Yonkers just to the north.

“The best thing that could happen to me is three casinos would open [in the New York City area],” Gural said.

He recalled an ill-fated New Jersey referendum in 2016 that would have allowed casinos in northern New Jersey, ending Atlantic City’s nearly half-century monopoly.

“When we put it on the ballot a few years ago, I think — I know — that it was done just to shut me up,” said Gural, who already had a preliminary agreement with Hard Rock to be its casino partner in East Rutherford. “It was intentionally designed to lose. The only good thing is now I realize that in order for us to win, [the language of the ballot question] has to be that the casino specifically is in the Meadowlands. It can’t just be ‘northern New Jersey.'”

Gural, who is 82, said it is “inevitable” that a casino will be built in the Meadowlands “as long as the politicians don’t screw me again.”

“Because if we don’t get a casino, we’ll need to be bailed out by the state,” he added. “Horse racing is a dying business. I built a beautiful facility, but horse players are dying off at my age or older. There was a time, believe it or not, when horse racing was more popular than baseball or football in this country.”

For now, for the potential casinos in New York City, the process drags on, with no certainty that three licenses are ultimately granted, making for a potentially feature-length run time for many — and a quite unsatisfying ending for those in the running.