Hochul seeking to speed casino licensing with eye on downstate

Hochul seeking to speed casino licensing with eye on downstate

ALBANY — Gov. Kathy Hochul is looking to speed the process that could open three casinos in New York City, on Long Island or in Westchester or Rockland counties in a proposal that already has strong support in the State Legislature.

The gaming industry has long clamored for full-fledged casinos in the huge metropolitan market. For years, the state has used that desire as way to lure casino operators to first establish casinos in the more economically distressed upstate, then wait for the New York City market to be opened in 2023.

Hochul’s proposal would eliminate the 2023 starting date and accelerate the licensing of up to three more casinos. The idea gained substantial strength when she included it in her budget proposal on Tuesday.

The proposal is to create a gaming facility location board to review applications for licenses for full-scale, Las Vegas-type casinos anywhere in the state, "but largely they will probably be focused in the downstate area," said state Budget Director Robert Mujica.

Hochul’s budget document states "it is expected they would provide a substantial amount of revenue for state education aid through license fees and recurring tax payments."

Details of how much revenue will be generated for the state and local governments and how many jobs will be created will have to await the proposals. But first, the Legislature must adopt Hochul’s proposal to authorize up to three more casinos. There is already support among many key lawmakers.

"Today’s executive budget released by Governor Kathy Hochul presents a fiscal path forward for New York State during these difficult times," said Senate Racing and Wagering Committee Chairman Joseph Addabbo (D-Queens). "I believe the inclusion of expediting the three full casino licenses for our downstate region has the potential to bring in $1.5 billion in revenue for the state, additional educational funding and improvements to problem gambling programs."

Major casino developers and operators, including MGM Resorts International, Hard Rock International, Bally’s and the Las Vegas Sands Corp., as well as Suffolk County Off-Track Betting Corp. and the Shinnecock Indian Nation, have expressed interest, according to filings with the state Gaming Commission.

The Shinnecock nation argues it should get a license to operate in Southampton because the tribe has sovereign rights to open a gaming facility with a compact under state and federal law. Tribal leaders didn’t respond to a request for comment.

The potential operators’ letters to the state expressing interest are heavily redacted to conceal their plans for a casino from potential rival bidders.

But much goes into locating a casino. The factors include ease of access for gamblers and a community’s willingness to become home to one with all the potential benefits and potential damage, including traffic, gambling addiction and crime.

"I’m definitely and have always been, in favor of accelerating downstate casinos," said Gary Pretlow (D-Mount Vernon), the chairman of the Assembly Racing and Wagering Committee. "The issue is, however: where they would go?"

"There has been a lot of talk about a casino in Manhattan," Pretlow said. "If there was one there, it would probably be the most lucrative casino in the world."

But as in Brooklyn, there is local opposition. Pretlow said the Bronx — the state’s poorest county — is ill suited to handle a high-volume casino and Staten Island requires long crosstown travel and tolls. The northern suburbs already have a casino at the racetrack in Yonkers. That could make Long Island more attractive for a new site, although Nassau and Suffolk counties also have drawbacks, including some community opposition to a full, Las Vegas-style casino.

There is no shortage of interest among operators, Pretlow said. Two casino companies already suggested they each pay $500 million for a license. Pretlow said the cost would be at least $750 million.

The state already has eight video-lottery casinos, including Jake’s 58 Casino Hotel in Islandia; seven tribal casinos, and four Las Vegas-style casinos. Each could oppose the expansion as a further erosion of the market for gamblers, an issue worsened this month as the state legalized sports gambling online that exploded in popularity.

"There is always going to be a concern about creating a competition for the four that are upstate," Mujica said.

A 2021 study commissioned by the state Gaming Commissions cautions that more casinos could result in oversaturation of the market. Oversaturation would mean "the state will experience significant revenue declines, which in turn could result in employee layoffs at a minimum, or facility closures."

Pretlow said, however, that there is "absolutely" enough support in the Legislature to approve a proposal for up to three casinos.

Former Gov. Andrew M. Cuomo last year had been concerned about accelerating the siting of casinos in the metro area after fighting the Seneca Nation in court for years over threats to their share of the market.

"I’m glad Governor Hochul is engaged in this," Pretlow said, drawing a distinction between her and Cuomo. "He just talked about it. She wants to do it."