Caesars, SL Green Teaming Up on Times Square Casino Bid

Posted on: October 20, 2022, 10:23h. 

Last updated on: April 20, 2023, 08:06h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Caesars Entertainment announced it’s partnering with SL Green Realty on a redevelopment effort at 1515 Broadway in Times Square, including a bid for a New York City casino permit.

Caesars New York
Times Square in New York City. Caesars is looking to build a casino there. (Image: Bloomberg)

In promising to spur New York’s economic recovery from the coronavirus pandemic while potentially bolstering security in the crime-ridden Times Square area, Caesars is throwing its hat into an ultra-competitive ring for a gaming license in the largest US city. If it comes to life, the venue will bear the Caesars Palace name.

In addition to major economic benefits to all Times Square stakeholders, SL Green and Caesars are proposing significant security and traffic improvements as part of their proposal, which would boost Mayor (Eric) Adams and the NYPD’s efforts in Times Square,” according to a statement issued by the companies.

The casino giant and the real estate investment trust (REIT) believe the project they’re pitching “will make visitors feel safer” and improve vehicle congestion by encouraging increased use of mass transit and more pedestrian foot traffic.

Currently, the two New York City-area casinos — Resorts World New York City in Queens and MGM’s Empire City Casino in Yonkers — are slots-only venues. The state’s 2023 budget likely paves the way for those venues to become full-service casinos with table games and retail sportsbooks, as well as providing a third license for a yet-to-be-determined operator.

New York Casino Competition Getting Interesting

It’s widely believed that Empire City Casino and Resorts World are playing political ball to guarantee they secure the casino licenses. They are doing so by donating to Gov. Kathy Hochul’s (D) suddenly tight reelection effort.

Resorts World parent Genting is among Hochul’s contributors. In addition to Caesars, other well-known operators believed to be interested in the third and final New York license are Bally’s, Hard Rock International, Las Vegas Sands, and Wynn Resorts.

Financial terms of the Caesars/SL Green plan weren’t revealed, but the project will be entirely privately funded, according to the companies. It’s likely to carry an exorbitant price tag due to the cost of Manhattan real estate. Previous speculation centered around Manhattan being all but off to limits to a gaming property, prompting supporters of the idea to consider other boroughs.

“Caesars will license its brand and manage the operations under a long-term management contract,” noted the gaming company.

The property will feature a theater for The Lion King. Caesars is the largest casino operator in North America, while SL Green is New York’s biggest office REIT.

Caesars’ New York Ties

Although it doesn’t currently run a casino in the state, Caesars has deep New York ties. It’s one of the largest online sportsbook operators there. By way of running three casino hotels on the Atlantic City Boardwalk, Caesars is familiar to scores of betting New Yorkers.

The New York proposal could be one of the company’s most ambitious undertakings in its current form. Not only are there ongoing reservations about a gaming venue calling Manhattan home, there’s a $500 million upfront licensing fee — something debt-weary Caesars investors may not be keen on.

Then there’s timing. Assuming there’s no significant political change in Albany on Election Day, the earliest the New York casino licenses will be awarded is sometime in 2023. From there, it will likely take years for a third gaming company to find a suitable property and bring the venue to life.