NY Casino Answers Could Bode Well for Genting, MGM

Posted on: December 19, 2024, 02:42h. 

Last updated on: December 19, 2024, 02:49h.

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

The New York Gaming Facility Location Board (NYGFLB) recently released a wide-ranging set of answers to various questions from groups pursuing the three downstate casino licenses the state is expected to award late next year, and there could be some positive takeaways for Genting and MGM Resorts International.

New York Casinos
Resorts World New York (left) and Empire City. New answers on the New York City casino bidding process could contain good news for those venues. (Images: Resorts World/MGM Empire City)

In its second set of answers provided to bidders, the NYGFLB acknowledged that “speed to market is only one of many factors of consideration.” While that clearly states regulators will take into account other issues, it also says the state wants gaming venues operational as quickly as possible after the three licenses are awarded.

Genting’s Resorts World New York in Queens and MGM’s Empire City Casino in Yonkers are already operational as slots-only venues with accompanying racetracks. Both venues have long been rumored to be all but guaranteed to claim two of the three downstate permits, implying the other nine bidders are essentially vying for one license. New York regulators haven’t commented on the advantages, if any, held by Empire City and Resorts World New York.

Bids must be submitted to the NYGFLB by June 2025 and the board will make recommendations on potential winners, but the final say on to whom the three licenses are awarded rests with the New York State Gaming Commission (NYSGC).

Genting, MGM Check NY Casino Boxes

In the eyes of New York, Empire City and the Resorts World venue in Queens are what’s known as video lottery terminal (VLT) venues, and that’s enough to hold the operators to the same standards as rivals competing for the downstate permits.

All selected applicants must demonstrate that required capital investments necessary for operation have been made to the facility, which shall be equal to or greater than $500 million, prior to the commencement of commercial gaming operations,” according to the NYGFLB.

That capital commitment can be easily met by both Genting and MGM. The former has pledged $5 billion, assuming it’s granted one of the permits, to convert its Queens property to a Las Vegas-style casino. Likewise, MGM has promised significant alterations at Empire City that are likely to create thousands of construction jobs while sporting a final price tag well in excess of the required $500 million.

Both properties already rank among the highest-grossing regional casinos in the country despite not having table games. That could indicate that if the pair can become traditional casinos, revenue and tax receipts would surge.

Some Clarity on Taxes, Fees

Gaming taxes differ from state to state, but the NYGFLB provided some clarity on what operators can expect when the three New York City-area gaming venues open their doors.

“The applicant must assume a 25% tax rate on gross gaming revenue (GGR) on slot machines and a 10% tax rate on gross gaming revenue from table games,” noted the board.

Each bidder must pay a one-time application fee of $1 million. For applicants comprised of multiple parties, which describes many of the bidders beyond Genting and MGM, the board said those groups have discretion as to which company pays the $1 million fee.

In addition to the aforementioned capital commitment of at least $500 million, the three winning parties will also each pay a $500 million licensing fee, though there has been some speculation that New York regulators could increase that price.