In the fast-paced race for downstate New York casino licenses, a dramatic shift unfolded last Wednesday as two major proposals, Caesars Times Square and Avenir, faced swift rejection. Both projects, among eight contenders vying for just three available licenses, were turned down by their respective community advisory committees (CAC) with a 4-2 vote against each. This outcome fell short of the required four affirmative votes needed for progression to the next stage.
The meetings, taking place just an hour apart, were brief, collectively lasting under half an hour. Despite the rejections, these votes are not the final hurdle. Projects that advance still must navigate approvals from the New York Gaming Facility Location Board and the state gaming commission. Some bidders had anticipated that CACs might green-light most projects to avoid decision-making burdens or to maintain a broad pool of applicants.
The landscape for the remaining contenders now appears uncertain as the month draws to a close. Freedom Plaza is up for review on Monday, with MGM Empire City and Resorts World NYC following on Thursday.
Among the next set of bids, Freedom Plaza seems to be on shaky ground, facing challenges akin to those encountered by Caesars. Despite its $11 billion scale, it has not escaped community pushback, though perhaps to a lesser extent than its predecessors. Both Caesars and Avenir struggled to secure local backing, which could spell trouble based on recent events.
Conversely, MGM and Resorts World might maintain a sense of optimism. Industry observers have regarded these bids as strong due to their existing infrastructure as video lottery terminal facilities, offering a quicker market entry than new developments. Additionally, both have established community ties over the years. Resorts World’s hearings received favorable feedback, while MGM faced moderate local opposition.
The state may opt to allocate these two licenses to expedite tax revenue flow while deciding between the remaining greenfield proposals. This strategy has been advocated by Yonkers Mayor Mike Spano for months.
The unpredictable nature of the licensing process was exemplified upstate, where initial expectations were overturned. The journey began in 2013 with the approval of Proposal 1, seeking to permit up to seven commercial casinos statewide. Four licenses were designated for upstate, proceeding first to stimulate economic growth in that region. The process confounded initial predictions, particularly in the Catskills/Hudson Valley zone, where none of the anticipated licenses were awarded to Orange County. Instead, 2015 saw licenses granted to Rivers Casino & Resort in Schenectady, Lago Resort & Casino in Waterloo, and Montreign Resort Casino in Monticello. Tioga Downs Casino Resort later joined the fold in 2016.
The current downstate request for applications (RFA) builds on this precedent, asking bidders to prepare projections for varying scenarios, including allocations of one, two, or three licenses. This approach suggests that not all licenses may be granted simultaneously, if at all.
Economic considerations include the substantial $500 million downstate licensing fee, a significant increase from the $70 million upstate fee. The decision to withhold any licenses, thereby forgoing immediate revenue of $1.5 billion, is a matter of debate as New York faces a projected budget gap of $34.3 billion by 2029.
External factors also weigh heavily, with macroeconomic concerns about rising tariffs and declining international travel potentially inflating construction costs and extending timelines for approved projects. Additionally, New York City is approaching a pivotal mayoral election, with Democratic socialist candidate Zohran Mamdani leading the race. Business leaders remain unsure of his policies’ potential impact on the city’s economy, although he has indicated he will not obstruct casino developments.
Despite the setbacks, Brendan Bussmann, a consultant with B Global Advisors, remains cautiously optimistic, suggesting there is “definitely a chance” the final licensing decisions could defy expectations. He draws parallels with Japan’s licensing process, which initially offered three licenses but has only awarded one thus far.
Bussmann emphasizes the complexity of New York’s gaming market, highlighting its high tax rates for both mobile sports betting and casino gaming. He remarks on the tough selection process, stating, “This has been an extraordinarily lengthy process… it really makes you scratch your head.”
The rapid rejections of Caesars and Avenir proposals received mixed reactions. Some CAC members expressed concerns over the expedited decision-making. Angel Vasquez, part of the Avenir CAC, argued for a postponement, citing ongoing discussions with the applicant up to the night before the vote.
Similarly, Laura Smith from the Caesars CAC and Nabeela Malik from Avenir’s CAC referenced requests from unnamed members to expedite the vote, questioning the transparency of the process. Neither the identities of these members nor alternative voting dates were disclosed.
Caesars’ leadership reacted with disappointment, as SL Green CEO Marc Holliday expressed frustration post-vote, arguing their proposal exceeded expectations. The Caesars Times Square group issued a strong statement, lamenting the missed opportunity for meaningful investment and urging opponents to address Times Square’s challenges with equal vigor.
Caesars’ official response remained composed, expressing gratitude for the CAC’s efforts and reinforcing their commitment to New York through existing ventures, like their Caesars Sportsbook platform.
Avenir, too, appeared caught off guard by the rejection. The group highlighted a significant last-minute request from the CAC, describing it as a factor warranting a vote delay. The specifics of the request remain undisclosed following the removal of Avenir and Caesars proposal materials from the state’s website.
Offering an alternative approach, Bally’s Bronx CAC negotiated amendments with ample time to respond, indicating some flexibility in the process.
The Caesars Times Square project aimed to transform a notable Broadway location into a $5.4 billion casino-resort, while Avenir’s $7 billion endeavor, led by Silverstein Properties, envisioned a casino-hotel complex near the Javits Center. Both proposals promised substantial economic benefits and community investments.
So far, four significant bids, including Avenir and Caesars, have been eliminated or withdrawn, tallying over $30 billion in potential development removed from the race. The dynamics of the downstate New York casino competition continue to evolve, underscoring the uncertainty and challenges facing remaining contenders.
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