The downstate New York casino chase has been building for years but Wednesday was a sharp reminder of how quickly plans can come crashing down.
Of the eight total proposals vying for three licences, the first two to come to a vote — Caesars Times Square and Avenir — were rejected swiftly by their appointed community advisory committees (CAC). Both committees voted against their projects by a 4-2 margin, below the threshold of four “yes” votes needed to advance to the next round.
The two CAC meetings, held about an hour apart at the same location Wednesday, lasted less than 30 minutes combined.
The votes are not the final step to licencing, as projects that move on still must clear the New York Gaming Facility Location Board and the state’s gaming commission. As such, some bidders might have sensed that CACs would approve most projects to avoid the burden of decision-making or to keep the pool of applicants as wide as possible.
Yet after last week, the remaining bids up for considerations by end of the month face new uncertainty. Freedom Plaza is up for debate Monday, while MGM Empire City and Resorts World NYC receive consideration Thursday.
Which NY casino projects face next votes?
Of the three bidders next to face votes, Freedom Plaza is perhaps the most at risk based on the first two rejections. Despite the fact that the $11 billion mixed-use complex is the largest by cost and scale, its CAC hearings were similar to Caesars in terms of length. The level of pushback was perhaps not quite as high for Freedom Plaza, but was still present.
For Caesars , the Broadway and theatre industry were opposed; for Freedom Plaza, it was residents in the immediate area. Neither Caesars nor Avenir appeared to have a marked advantage in local support throughout the process, which could be an ominous sign based on the first two votes.
By contrast, MGM and Resorts World might still have reason to feel confident. The strength of those two bids has been perhaps the consensus opinion among industry observers in the downstate race. Both are existing video lottery terminal facilities with significant speed-to-market advantages over greenfield projects and both established years worth of community relations and partnerships. Resorts World’s hearings were glowingly positive, while MGM’s featured a moderate level of local opposition.
In theory, the state could set those two licences aside to ensure that tax revenue comes in as quickly as possible, and decide on their preferred greenfield from the four still remaining. Yonkers Mayor Mike Spano has been advocating for this approach for several months.
Upstate licence outcome an example of unpredictable nature
But New York casino stakeholders have learned that outcomes can be uncertain, with the upstate process being the chief example. That saga began in 2013, when voters approved Proposal 1. This amended the state constitution to eventually allow for up to seven commercial casinos throughout the state.
Four of the licences were earmarked for upstate, with the remaining three left for the downstate region. Upstate went first, in efforts to boost that area’s economy. The region was split into three main development zones outlined in the graphic below.
One consultant involved with both the upstate and downstate processes who spoke to iGB on condition of anonymity explained that the consensus opinion at the time was that two of the four licences would go to the Catskills/Hudson Valley zone, that being the closest to New York City. There were nine bidders in the zone as a whole and six within Orange County specifically, out of 16 total.
But ultimately state regulators threw a curveball and Orange County was passed over entirely. Instead, three licences were awarded in 2015 to Rivers Casino & Resort in Schenectady, Lago Resort & Casino in Waterloo and Montreign Resort Casino in Monticello, which later became Resorts World Catskills. Tioga Downs Casino Resort in Nichols was also recommended for licensure by the GFLB but was not awarded its licence until 2016.
This time, the source noted that the downstate request for applications (RFA) asked bidders for projections based on scenarios where one, two or three licences were awarded. This precedent, added to the scenarios outlined in the RFA, might give more credence to the idea that not all three downstate licences will be awarded, or perhaps not at the same time.
State faces budget gap, but other factors remain
One key difference between the two cases, however, is the potential benefit to the state. For the upstate casinos, the licence fee was $70 million. The downstate licence fee is a more robust $500 million.
The question of whether decision-makers would decline to award all three licences and miss capitalising on $1.5 billion in immediate combined income, regardless of other issues, remains open. New York faces a cumulative budget gap of $34.3 billion through fiscal year 2029.
At the same time, there are additional external factors that must also be taken into account. Macroeconomic fears related to rising US tariffs and reduced international travel could result in added construction costs and longer timelines for any projects that would be approved, with declining visitation once they’re open.
This is coupled with the fact New York City is headed for a significant mayoral election in November. Democratic socialist candidate Zohran Mamdani is considered a heavy favourite, and business leaders do not know how his policies could impact the city’s economy, although he has said he will not block casino developments.
So you’re saying there’s a chance …
Las Vegas-based consultant Brendan Bussmann of B Global Advisors told iGB there is “definitely a chance” that the downstate licencing outcome is a surprise, either in the number of licences awarded or to whom.
He pointed to Japan as an example, which started its licencing process in 2019 with great enthusiasm and three available licences only to issue one thus far, to MGM Osaka in 2023.
Bussmann noted that the Empire State is a particularly challenging gaming market, with very high tax rates for both mobile sports betting (51%) and casino gaming (10-30+%). Caesars, Sands and Wynn were on the short list of operators capable of executing such a high-level New York casino project, and all are now out of contention.
“This has been an extraordinarily lengthy process, and yes it is complex, but when you have over 1,000 questions in your RFA, it really makes you scratch your head,” Bussmann said. “Have we done this process right from the beginning? This process seems designed to weed everybody out and hopefully get down to three in the end.”
Do quick rejections show what’s next in New York casino race?
Each CAC had until 30 September to vote, yet the first two decisions were made with almost two weeks to spare. Both Caesars and Avenir submitted last-minute amendments in the days prior to their votes, but none were accepted by the CACs.
Some members disagreed with how the process unfolded.
Angel Vasquez, an Avenir CAC member, said its vote should have been postponed because conversations with the applicant were “incomplete”. Those conversations were ongoing up to the previous night before the vote, he said.
Laura Smith of the Caesars CAC and Nabeela Malik of Avenir’s, appointed to their committees by New York City Mayor Eric Adams, came to their votes with identical statements alleging that certain unnamed CAC members requested to move the votes up, despite the extra time available for deliberation. Neither the names of the members who requested this nor alternate vote dates were revealed.
New York casino licence denial surprise to Caesars, partners
Following the Caesars vote, SL Green CEO Marc Holliday confronted committee members directly, saying his company’s bid “met the standard and then some”. He applauded the two yes votes as the only ones “with courage to stand up”.
“Go run and hide, because what you did, the benefits you denied this community and this city and state, you have to live with that history forever,” Holliday shouted as members filed out.
The Caesars Times Square group then put out a fiery joint statement, calling the bid a “visionary proposal that aimed to address long standing challenges through meaningful private investment”.
“We’ve built strong relationships with a community that is eager for progress, and we hope that those who opposed this project — both in the public and private sectors — will now bring the same energy and resources to solving the very real challenges facing Times Square,” the statement concluded.
Caesars itself had a more muted response in a statement to iGB, extending “sincere gratitude” to the CAC for their “thoughtful consideration throughout the evaluation process”. The company pointed to its ongoing and future operations in the state.
“While we are disappointed by the outcome, our commitment to New York remains unwavering,” Caesars said. “We are proud of our strong partnerships across the state as anchored by our Caesars Sportsbook platform, where we continue to invest and innovate to serve New Yorkers.”
Avenir CAC made ‘significant request’ prior to denial
The Avenir rejection also seemed to surprise its stakeholders.
On the day of the vote, the group issued a statement reiterating the concerns that Vasquez voiced to the committee. The statement alleged the CAC had “made a very significant request” at 10:50pm the previous night, without proper time for consideration. This, they said, “taints the CAC process” and should have postponed the vote.
On the state’s website, the materials for both the Avenir and Caesars proposals have since been removed. It is unclear what request was made to the Avenir team.
“We’re putting forth a project in a location which could really use this type of complex jobs, housing, a hotel, restaurants,” Silverstein COO Dino Fusco told Spectrum News NY1 after the denial. “These are all things that we heard from the community, both in advance of putting together our proposal and then again, at the public CAC meetings that were held over the past month.”
As a comparison to Avenir, the Bally’s Bronx CAC also made significant amendment requests and held a separate meeting for the purpose. The list of requests was long, but Bally’s was given time to submit a response before Friday’s deadline, which it did, indicating some willingness to continue negotiations.
What Caesars, Avenir projects would have done
Caesars Times Square, a joint effort by Caesars, SL Green and Roc Nation, would have renovated an existing office building at 1515 Broadway into a $5.4 billion casino-resort in one of America’s tourism hubs.
Silverstein Properties’ $7 billion Avenir bid was also in Manhattan, near the Javits Center. Plans called for a New York casino operated by Rush Street Gaming, a 1,000-room Hyatt hotel, a ground-level community art gallery spanning 11th Avenue and more.
To this point, four significant bids have been eliminated or voluntarily withdrawn:
Sands’ projected cost was $7.6 billion and Wynn’s was $12 billion, meaning more than $30 billion in potential development has exited the New York casino race, with more hurdles still to go.
After two downstate NY casino projects were shot down in one day last week, the ultimate outcome became harder to predict.