Manhattan Casino Idea on Life Support as Politicians Balk

Posted on: June 3, 2021, 09:58h. 

Last updated on: July 7, 2021, 01:07h.

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

Plans to bring a casino to the New York City borough of Manhattan suffered a major blow this week, as politicians scoffed at the idea.

Manhattan casino
Times Square in New York City. Plans to bring a casino to Manhattan are in trouble. (Image: Jeenah Moon/Reuters)

New York Gov. Andrew Cuomo (D) favored the idea of bringing a Las Vegas Strip-style integrated resort to Manhattan. State policymakers were also working on plans to allow the borough to decide on its own the fate of any casino pitches that come its way, reports The New York Post. However, the governor balked at the concept of giving a borough special rights on the notion it could come back to bite the state in future budget talks.

An unidentified source told the Post that the pitch almost made it through, but fell apart at the last minute during the budget negotiations that concluded in early April. Federal funding that’s shoring up state finances may have played a role in delaying a decision on the Manhattan casino concept.

With the influx of federal funding, there was less of an imperative to change the status quo. However, we are continuing to work with the Legislature to see if there is a path forward this year,” said Freeman Klopott, a spokeswoman for the New York State division of the budget, in an interview with the Post.

Previously, expanded casino gaming in the fourth-largest US state was seen as a 2023 issue. But operators and politicians pushed it into this year’s discussion due in part to the allure of bringing an integrated resort to the largest US city.

In Manhattan, Dashed Hopes for Operators

While the Manhattan casino idea isn’t dead, it’s clear it faces hurdles, and that’s potentially sour news for Bally’s (NYSE:BALY), Las Vegas Sands (NYSE:LVS), and Wynn Resorts (NASDAQ:WYNN) — the operators seen as the leading contenders to land the single New York City gaming permit.

News emerged in March that those three companies were actively pursuing a deal. But even back then, prospects for a Manhattan gaming venue appeared murky, and it was believed Nassau and Westchester counties would present political hurdles of their own. That would leave the outer boroughs of Brooklyn, the Bronx, Queens, or Staten Island as potential spots for a new casino. However, it’s not clear what the operators’ feelings are on those locations.

Assemblyman Richard Gottfried, who represents Chelsea, Hell’s Kitchen, Murray Hill, and part of the Lincoln Center area, said a Manhattan casino is a no-go.

“I believe it would be seriously detrimental to the residential and commercial quality of Manhattan,” he told the Post.

News of delays to or the death of the Manhattan gaming concept could temporarily crimp Las Vegas Sands’ efforts to maintain a consumer-facing presence in the US. With the pending sale of its Sin City assets, and Texas out of the equation for now, New York was the most likely area in which the largest US gaming company would pursue a domestic footprint.

Others Feeling Impact, Too

With the gaming talks apparently delayed, other operators are being affected, too.

Resorts World New York City in Queens and MGM Resorts International’s Empire City in Yonkers currently offer only slot machines and electronic table games. The companies want to transition to traditional table games this year rather than wait until 2023, as they’re required to do by New York law.

There’s ample local support for that move. But with the discussions halted, MGM and Resorts World may have to play a waiting game. When the state awards three New York City-area gaming permits, two will go to Empire City and Resorts World, while the third will be put out to bid.