Hard Rock Russia Ties Could Jeopardize New York Casino Plans

Posted on: March 3, 2023, 02:59h. 

Last updated on: March 6, 2023, 12:45h.

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

Hard Rock International’s relatively modest exposure to Russia could endanger the tribal gaming giant’s plans to win a highly prized New York City casino license.

Hard Rock
The now-closed Hard Rock Cafe in Moscow. Hard Rock International’s Russia exposure could imperil its New York casino efforts. (Image: Restoran)

A pair of franchised restaurants bearing the Hard Rock name — one in Moscow and another in St. Petersburg — could run afoul of Gov. Kathy Hochul’s (D-NY) directive implemented last year barring New York State entities from conducting business with firms with ties to Russia.

All Affected State Entities are directed to refrain from entering into any new contract or renewing any existing contract with an entity conducting business operations in Russia,” according to the governor’s executive order.

New York is home to the largest ethnic Ukrainian population in the US. With Russia’s war against that country stretching into a 13th month, businesses with ties to Russia could invite scrutiny by policymakers in the fourth-largest state.

Citing a statement from a Hard Rock spokesman, the New York Post reports that the now-shuttered Moscow restaurant and the St. Petersburg venue, slated to close on March 13, are independently owned and operated and that the company doesn’t directly control or run any businesses in Russia.

Hard Rock Seen as Prime New York Casino Contender

Hard Rock International, the gaming arm of Florida’s Seminole Tribe, long ago announced plans to be a player in the increasingly intense New York casino competition.

Last year, Chairman Jim Allen said the operator would spend $2 billion to develop a casino hotel in the Big Apple if selected as one of three downstate gaming permits recipients. The company has other interests in New York, including a nongaming hotel in Manhattan, a partial stake in the Meadowlands in Northern New Jersey, and its namesake casino on the Atlantic City Boardwalk.

Though there have been no public comments to this effect, widely held speculation suggests that Hard Rock is New York Mets owner Steve Cohen’s preferred partner for a gaming project near Citi Field in Queens.

Hard Rock is vying with the likes of Bally’s, Caesars Entertainment, Las Vegas Sands, and Wynn Resorts, among others, for what many believe is just one New York City-area casino license because it’s widely believed the other two permits will be awarded to slots-only Resorts World New York City in Queens and MGM’s Empire City Casino in Yonkers.

Hard Rock Major Player in New York Politics

As is the case with gaming entities across the US, Hard Rock is a significant political contributor to New York politics. Executives from the tribal gaming giant donated $150K to Hochul’s 2022 reelection effort, and the company spent $230K lobbying politicians in the state on casino plans, according to the Post.

That posturing could be useful in the casino competition, but at the same time, there is criticism of Hard Rock’s small exposure to Russia.

The Yale School of Management published a working paper detailing corporations’ efforts to wind down activities in Russia following the 2022 invasion of Ukraine. Hard Rock is one of 238 corporations to receive an “F” grade, residing in the “Defying Demands for Exit or Reduction of Activities” camp. Other US-based companies on that list include Match.com and TGI Friday’s.