New York Casinos Could Rival Las Vegas Strip, Says Light & Wonder Exec

Posted on: December 27, 2023, 03:11h. 

Last updated on: December 28, 2023, 10:32h.

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

The gaming revenue generated by just three New York City-area casinos could rival or surpass levels seen on the Las Vegas Strip.

Times Square casino
Times Square in New York City. A Light & Wonder executive says New York casinos could rival the Las Vegas Strip in terms of revenue. (Image: NY Eater)

That’s the take of Howard Glaser, global head of government affairs at Light & Wonder. Glaser’s view on the matter is highly relevant, because he previously served as senior policy advisor to Gov. Andrew Cuomo (D-NY), leading the effort to legalize traditional casino gaming in the downstate region.

The numbers are eye-popping in terms of the potential revenue,” Glaser said in a recent CNBC interview. “A study New York State itself did said $8 billion a year in potential casino revenue from three casinos. To give you some perspective, the Las Vegas Strip produced $8 billion in casino revenue last year.”

That’s likely a reference to gross gaming revenue (GGR), as Nevada casinos, in aggregate, have been averaging north of $1 billion in monthly revenue for some time. The broader figure in Las Vegas and across Nevada typically includes nongaming items, such as food and beverage, hotel rooms, and shows, in addition to gaming revenue.

New York Casinos Have Clear Advantages

With New York City widely viewed as one of the last great, untapped casino markets in the world, gaming companies are spending millions of dollars simply to have a chance at the three licenses regulators there could award at some point next year.

It’s a competition that’s drawn industry behemoths, including Caesars Entertainment, Las Vegas Sands, and Wynn Resorts, among others. There’s long-held speculation that MGM Resorts International’s Empire City racino in Yonkers and Resorts World New York in Queens will be grandfathered two of the permits, meaning the other companies are essentially vying for a single permit. However, policymakers and regulators haven’t publicly confirmed that those two venues have a leg up on the competition.

While the battle for the three downstate casino licenses has been lengthy and will ultimately prove expensive for the operators involved, the math confirms the winners are likely to benefit mightily.

“How is it possible that three New York casinos equal the whole Las Vegas Strip?,” Glaser noted to CNBC. “It’s 23 million people live here, 50 million people visit. Casino executives want to be into this market.”

New York Has Casino Operators in Tough Spot

New York City is undoubtedly enticing to casino operators, but the state has gaming companies in a tough spot. Not only are roughly a dozen firms vying for the three permits, but with the state needing revenue as residents flee to other states, it’s rumored that what was once a $500 million license fee could now be $1 billion or more.

As Glaser told CNBC, $1 billion sounds like a lot of money upfront — and it is — but over 20 years, the three operators that win the permits could be divvying up close to $200 billion in revenue.

The $1 billion permit fee doesn’t include operators’ construction costs, meaning pitches such as Las Vegas Sands’ plan for a Nassau County casino hotel and Hard Rock International’s pitch for a gaming venue near Citi Field in Queens could cost as much as $6 billion and $8 billion, respectively.

Sands CEO Rob Goldstein and Hard Rock CEO Jim Allen told CNBC that at those price points, it would be nearly impossible for the projects to turn adequate profits if casinos aren’t involved.