New York casino bidders facing debt pain if successful

Article by : Charles Perrin Jan 15, 2024

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New York casino operators are facing up to the specter of racking up huge debts if they are successful with their bids.

The state has spent months poring over the details of bids from some of the most recognized operators who are jostling to procure one of three coveted licenses.

American credit rating agency S&P revealed in a report that the casino operators vying to secure a license may not notice an immediate financial impact if they are given the go-ahead to execute their respective projects.

The report read: “The project sizes range from $2 billion on the low end for expansions or redevelopments of existing properties to more than $5 billion for new developments.

“However, the leveraging impact could be 12-18 months away.”

Speculation has mounted that slots-only based venues MGM Resorts International’s Empire City Casino and Resorts World New York in Queens could command two of the three state permits up for grabs, and the race has been fraught with tension.

Meanwhile, with projections suggesting the New York budget deficit is set to balloon to $8 billion in 2025, the authorization of legalized iGaming could provide a $1 billion windfall for the state.

New York remains one of the last big untapped frontiers of iGaming, with neighboring states, such as Connecticut and New Jersey, reaping the benefits.

More recently, rumors have been flying about that successful bidders may have to pay as much as $1 billion in licensing fees which is well above the original expected cost of $500 million.

The casino industry is an expensive business, but New York operators will have to plow a lot of money into getting their projects up and ready.

Of course, there is no denying the state will follow the money wherever possible, and they will look to extract as much capital from operators.

It is expected that an announcement will be made on the winning bidders in the second half of this year, although that has yet to be formally confirmed.

Although there is likely to be some short-term pain in terms of elevating debt burdens, the long-term gains will be more than worth it especially if New York wants to put itself on an even keel with formidable markets, such as Nevada.