New York Budget Saves Jobs for Upstate Casinos, Offers Potential for Downstate

Posted on: April 11, 2021, 05:01h. 

Last updated on: July 7, 2021, 01:33h.

Steve Bittenbender Read More

Expertise: Legislation, Sports Betting, Horse Racing.

Lost in the hoopla over mobile sports betting last week, when New York lawmakers passed a $212 billion fiscal year budget, were a couple of provisions tied to the casinos across the state.

First, the budget calls for the New York State Gaming Commission to issue a “request for information” solicitation regarding the three unawarded downstate casino resort licenses. The other allows for the existing four upstate commercially licensed casinos to seek a reduction in gaming taxes.

The RFI, which will essentially determine what entities may be interested in operating a downstate casino, will be the first step in getting those licenses issued.

It’s not as far as state Sen. Joseph Addabbo, D-Queens, and other gaming proponents wanted to go this year. The state Senate’s proposed budget called for starting the bidding process on the licenses this year. It is an attempt to bring in up to $1.5 billion in revenue from licensing fees and stimulate the New York City area economy with thousands of construction and hospitality jobs.

“The work starts after the budget ends,” Addabbo, who chairs the Senate’s Racing, Gaming, and Wagering, told Casino.org. “So, if we can expedite even that process of the RFI, my goal is still to try and realize some revenue within this fiscal year.”

Cuomo Wants to Avoid Politics with NY Casinos

Before the COVID-19 pandemic dealt an economic blow to New York through the loss of millions of jobs, Gov. Andrew Cuomo had been adamant that the downstate casino licenses would not be issued until 2023. That was how the state set up the seven licenses back in 2013, with state officials giving the four upstate casinos a six-year head start to establish their markets.

The governor in his executive budget did include the RFI plan. However, he could not be swayed to release the licenses earlier, even as the New York City area has lost more than a quarter-million hospitality jobs in the last year alone.

On Wednesday, while not ruling out the possibility of expediting the licensing process, Cuomo told reporters he did not want to politicize the casino authorization process.

We have a gaming commission that makes the decision on the merits,” Cuomo said. “There’s a lot of money involved in casinos. There’s a lot of lobbyists. There’s a lot of political contributions, and I want to make sure that any decision that is made is made purely on the merits, and I’ll have nothing to do with a casino plan that can be politicized.”

In addition to seeking an early awarding of the licenses, the Senate’s proposal also called for giving a slight preference to two existing downstate racinos, MGM Resorts International’s Empire City Casino at Yonkers Raceway and Resorts World New York City at Aqueduct in Queens.

MGM to Keep Fighting for Downstate Casinos

In a statement to Casino.org, an Empire City spokesperson said the company was disappointed the state could not reach an agreement on downstate casinos “that would have immediately created thousands of good-paying union jobs.”

“That’s why there has been such strong support from local business, labor unions, and community groups,” the spokesperson said.

“We will continue to work with the legislature to pass a bill that implements a process for the issuance of downstate casino licenses before the end of the session.”

Resorts World Sees Upstate Provision as Win-Win

As for the other casino provision in the budget, the four upstate venues can now petition the gaming commission to seek a reduction in their slot machine taxes to no less than 30 percent of their gross gaming revenue.

Under state law, slots at Resorts World Catskills in Monticello currently are taxed at 39 percent. At Rivers Casino in Schenectady, the tax rate is 45 percent, and at Del Lago in Tyre and Tioga Downs in Nichols, their slots revenue is taxed at 37 percent.

Across the four casinos, revenue from all other gaming sources is taxed at 10 percent.

Meghan Taylor, the vice president for government affairs and public relations for Resorts World Catskills, said the measure will benefit all parties.

For the casino, Taylor noted it would allow it to implement its growth strategy and give “economic security” to workers.

“This provision will help protect the more than 1,400 union jobs at Resorts World Catskills, stabilize hundreds of millions of dollars in revenue for New York State, and spur capital investment on the property that will result in additional direct and indirect jobs and economic activity in the Catskills region,” Taylor told Casino.org.

The budget calls for the gaming commission to evaluate requests on eight criteria. That includes the casino’s inability to remain competitive under the existing tax plan and a review of how the entities plan to use the funds they’ll gain from the tax break.