New York Unlikely to Issue New Casino Licenses Until 2025

Article by : Erik Gibbs Nov 1, 2023

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It’s unlikely that New York regulators will grant three downstate casino licenses next year, potentially postponing the decision until 2025, further cementing the state’s reputation as the epicenter of complex casino politics.

This sentiment comes from Brendan Bussmann, founder of B Global Advisors. In a recent report released through Truist Securities, Bussmann offers insights into the political dynamics of the gaming industry in several states, including New York.

The process of awarding three casino licenses in the New York City area is already progressing slowly, making Bussmann’s 2025 timeline seem plausible.

The analyst raises questions about the duration of the second phase of this initial stage, not to mention the subsequent phases, which are arguably even more challenging and formidable, especially considering the involvement of several multi-billion-dollar projects.

Additionally, Bussmann suggests a larger surprise may be on the horizon: Genting and MGM Resorts International might not be guaranteed to secure two out of the three downstate licenses.

In 2022, New York legislators approved three downstate casinos, leading to widespread speculation that gaming companies were essentially competing for a single license.

This was based on the assumption that MGM’s Empire City Casino in Yonkers and Genting’s Resorts World New York in Queens would be “grandfathered” in to receive two of the permits.

However, Bussmann points out that allegations surrounding Scott Sibella’s involvement in an illegal sports betting ring could affect these operators’ prospects of obtaining New York casino permits.

Sibella has connections to both companies, having been dismissed by Resorts World Las Vegas last month and previously serving as the president of MGM Grand on the Las Vegas Strip for a decade.

Bussmann emphasizes that the “favored nation” status of Genting and MGM has diminished in light of the Sibella scandal.

This could pave the way for other contenders, such as Caesars Entertainment, Las Vegas Sands, and Wynn Resorts, among others, to emerge as winners in New York. One thing is certain: the path to securing these licenses won’t be smooth in the state.

The founder of B Global Advisors also cautions about the potential for a process that resembles “a drawing of straws between real estate magnates,” one that’s highly influenced by politics, and “an overly competitive race to the bottom,” as seen with the tax rates in sports betting.

Bussman also mentioned the potential introduction of iGaming as the third act in New York’s ongoing circus of gaming politics. It’s anticipated that the legislature may address this matter in the coming year.

If the state indeed approves online casinos, this would be a welcomed development for online sportsbook operators enduring New York’s staggering 51% tax rate, which is the highest in the country.

Nonetheless, the B Global analyst believes that if iGaming is greenlit in New York, it will likely come with a similarly hefty tax rate. New York is grappling with a declining population, partly due to high taxes, and it is in need of alternative revenue sources as its income tax revenue decreases.

The gaming industry could offer the necessary revenue, indicating that there might be legislative momentum for online casinos in the upcoming year.