Genting Malaysia and MGM Resorts are seen as early front-runners to win two of three full casino licenses set to be awarded in downstate New York after the state legislature this week paved the way for the RFP process to get underway – a year earlier than previously expected.
Under details confirmed over the weekend, operators must commit a minimum license fee of US$500 million – although higher bids will be accepted – with tax on slot machines and table games to be set at a minimum of 25% and 10% respectively.
The criteria to be applied to bidding parties is likely to focus on factors such as job creation, tax revenue to be generated and other output factors.
The New York opportunity is expected to attract interest from many of the world’s largest casino operators with CBRE Equity Research estimating in a Wednesday note that the combined GGR of three New York casinos could reach as much as US$4.8 billion annually, depending on their final locations.
However, CBRE’s Senior Analyst John DeCree also named Genting Malaysia and MGM Resorts – the two companies already operating slots-only casinos in downtown New York – as clear favorites to win two of the three full licenses on offer.
Genting Malaysia operates Resorts World New York City in Queens while MGM runs Empire City in Yonkers.
“The NYS Gaming Facility Location Board is now expected to run a competitive process similar to the upstate casino selection on process from several years ago,” DeCree wrote.
“In addition, the process will include input from a six-member advisory board of local officials to assess public support for proposed locations. Demonstrating evidence of local support and zoning approval is required for all applicants. This could be the most challenging part of the process, which is one of the reasons we believe Empire City and Resorts World NYC are front-runners for two of the three licenses.
DeCree added, “Ultimately, we believe the legislation and requirements give both Empire City and RWNYC a leg-up. First, the required local support will likely be easier to obtain given both properties’ existing footprints in the region.
“Second, at least a portion of existing and previous capital investment could be considered in the total proposal.
“Third, both properties could be ready to launch table games nearly instantly, providing immediate jobs.
“Lastly, the consideration of revenue impact to existing VLTs (video lottery terminals) and the requirement for any casino license in those regions to maintain minimum [charitable] contributions presents a hurdle for any new development near Empire City or RWNYC.
“That said we still see one very compelling license opportunity up for grabs with a number of interested parties and potential sites throughout the New York City area.”
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