The race to secure one of the three downstate casino licenses in the Big Apple has escalated into a fierce competition among the city's wealthiest individuals and corporations, with the promise of immense profits attracting the world’s high rollers, sparking controversy and accusations of pay-to-play politics.
The bidding process has seen a flurry of applications from the likes of real estate giants Vornado, Related, and SL Green; New York Mets owner Steve Cohen; real estate scion Steven Soloviev; Saks Fifth Avenue; and Coney Island entrepreneurs Joe Sitt and John Catsimatidis. Each applicant has submitted a $1 million application fee and now face the challenge of winning over a Gaming Facilities Location Board–controlled by Gov. Kathy Hochu–with the successful bidder required to tip the state $500 million for a license and invest at least $500 million in their project.
The city already sports two gambling facilities known as racinos, horse racetracks that also operate slot machines, and other electronic betting games. Genting, the Malaysian-based casino developer, operates the Resorts World facility at Aqueduct Racetrack in Queens, while MGM Resorts controls the Empire City racino in Yonkers. Barring any unforeseen actions, these locations will most likely receive two of the three casino licenses, according to Gary Pretlow, a state Assembly member and co-chair of the Committee on Racing and Gaming. And as pre-established facilities, it won’t take long after being licensed for them to begin operating as full-scale casinos. “It’s really the one license, the other two are spoken for,” said Alan Woinski, CEO of Gaming USA Corporation, a gambling consulting firm. “It’s going to be a bloody battle.”
Initial proposals were met with a lukewarm reception, featuring flashy, but not overly ambitious designs in locations such as Coney Island, Times Square, Hudson Yards, and the Nassau Coliseum site. However, the competition has heated up recently, leading applicants to adopt more creative and extravagant approaches to capture the committee's attention.
The Soloviev Group, for instance, announced plans for a $1.5 million installation of 17,000 fiber optic flower lights on a vacant lot near the U.N., alongside their proposed casino. “These are just distractions to get the real moneymaker through,” a Community Board 6 member groused. “In the end, they get the cash, we get the breadcrumbs.” Soloviev also promised to spend a half million dollars fixing up the cracked sidewalks around the site, something he should do anyway as the property owner, skeptics noted.
Meanwhile, hip-hop mogul Jay-Z, whose entertainment company, Roc Nation, is partnering with SL Green and Caesar’s on the Times Square proposal, penned an open letter urging New Yorkers to support his bid. “This is too important of a moment in our city’s illustrious history” he wrote. New Yorkers should choose an operator that puts them “at the top of their agenda.” Jay-Z sweetened the pot by promising $115 million for diverse theater programs on Broadway that include daycare for stage workers.
Saks Fifth Avenue is pitching a Monte Carlo–style casino atop its Plaza District flagship with its chief executive asking: “Why should Manhattan have another slobby casino? The casino at Saks will attract an affluent global tourist and not prey on people who shouldn’t be in casinos.”
A proposal is also afoot from Vornado, which is considering the site of the now-demolished Hotel Pennsylvania for a gambling center. The property had been slated for an office skyscraper before the real estate company concluded that building new office space in Manhattan wasn’t a good idea given the condition of the city’s real estate market in the wake of the COVID lockdown.
Another prominent figure in the bidding war is billionaire Steve Cohen, known for his ownership of the York Mets and his hedge fund endeavors. Cohen has spared no expense, hiring eight firms and employing dozens of lobbyists to promote his vision of a Vegas-style casino near Citi Field. This move has stirred accusations of pay-to-play politics, with Cohen contributing substantial amounts to Gov. Hochul's election coffers and hosting her at a Mets game. He did make one bad bet, however, kiting $22,600 to disgraced ex-Lt.-Gov Brian Benjamin, who was thrown off the ticket by Hochul after he was rung up for allegedly helping himself to campaign donations.
Las Vegas Sands in inching along in its bid for a major development in Uniondale, which includes a $4 billion casino. They’re looking for Hempstead Town zoning changes and a host of other approvals to reimagine the Nassau Hub. In addition to the casino, they’re looking to build two hotels with 1,670 rooms, entertainment and meeting space, live performance venue, and "public attraction" space.
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The state Democratic Party has also received significant campaign donations from the principles vying for the lucrative licenses. Government watchdogs have flagged the appearance of “pay-to-play” politics in the process, noting Cohen and his wife donated nearly $139,000 to Hochul’s campaign. SL Green CEO Marc Holliday donated $18,000 as well. His partner, Caesars Entertainment, ponied up $50,000 to the “housekeeping” account of the New York State Democratic Committee.
Jeff Blau, CEO of Related Companies, donated $18,000 to Hochul, while his spouse Lisa Blau, a venture capital investor, anted up another $18,000. Along with Wynn Resorts, Related is proposing a Hudson Yards casino near the Javits Center. Last October, Lisa Blau also donated $117,300 to the Democrat housekeeping account, a pot of funding that enables large donors to circumvent contribution limits.
Albany lobbying firms are also in on the action with Related using Nixon Peabody, which contributes handsomely to Hochul and the Democrats. Wynn Resorts taps into veteran lobbyist Tonio Burgos, another prolific Democrat donor.
Other players, Sam Gerrity, CEO of Saratoga Casino Hotel, and Daniel W. Gerrity, whose past titles include president of Saratoga Casino Holdings, have also greased the skids with Hochul donations. They are proposing a Coney Island boardwalk casino with Thor Equities, the Chickasaw Nation, and Legends, also big-time donors to the Democrats.
Ironically, the New York City casinos will open a new front in competition vs. upstate venues such as those operated by Delaware North, the Buffalo-based gaming and hospitality company where Hochul’s spouse, William Hochul, is vice president and lead counsel. The gaming company, which runs gambling joints in Buffalo and the Finger Lakes, provided two-thirds of the nearly $1 million in household income for the Hochuls last year.
Gambling has been lucrative for the state as Resorts World, which operates facilities in Monticello, Newburgh, and Queens, announced a milestone in supporting the education system. The state’s largest taxpayer, Resorts has pumped more than $4 billion into New York’s lottery education fund as of July 21, enough money to pay the salaries of 45,000 public school teachers, the company boasted.
The official deadline for casino applications will be 30 days from the gaming board’s response to a second round of questions, which is expected to be this summer or fall. On top of the half-billion dollar gaming license fee, the state will also receive vigs from the overall take.