New York’s future casino revenue to come second only to the Las Vegas Strip
‘First-mover advantage’ in the New York commercial casino launch will benefit Genting Malaysia for several years, according to CBRE Equity Research with it being able to offer gaming tables a full five years before its competitors.
The research firm went on to describe New York’s gaming expansion as ‘the most material development in US gaming since the industry began proliferating outside of Atlantic City in the 1990s.’
Genting plans to relaunch the first phase of its Resorts World New York City (RWNYC) as a full commercial licence in the second quarter of this year with the expansion work to carry on until 2030.
CBRE Analysts Colin Mansfield and Connor Parks said: “Currently, RWNYC operates with over 5,000 video lottery terminals but will invest over US$5bn in multiple phases to introduce table games, an expanded hotel, and other amenities to upgrade the site into a full-scale commercial casino. RWNYC has the benefit of being able to convert and open table games quickly, which will give them a first-mover advantage for several years. Genting should also benefit from having existing casino infrastructure in place and an already existing customer base”.
“This should support consistent cash flow through construction as business is expected to remain open and ongoing. In the application materials, RWNYC suggested its tax rate should be lowered to the other licensees to ‘maintain a level playing field and avoid cannibalisation. This was countered by the Gaming Facility Location Board’s recommendation that RWNYC be considered for a licence based on the tax rates it bid with.”
They believe New York’s three full casino licensees could produce annual revenues of US$5.6bn in a best-case scenario with 70 per cent of that coming from gaming, making it the second-biggest US casino market behind the Las Vegas Strip.
Mansfield and Parks added: “The proposed gaming floors are massive with some of the largest table footprints, if not the largest, seen in regional gaming with over 200, 400 and 500 planned at Bally’s Bronx, Hard Rock and RWNYC, respectively. The Downstate New York market is significantly underpenetrated and there is a strong case for each of the three projects to be among the highest revenue-generating casinos across regional gaming.”
“The area’s population density and slot machine performance support attractive WPD (Win Per Day) metrics for the future Downstate New York market, despite the meaningful amount of gaming positions proposed. The market is ripe for new supply, and we do not believe it will be oversaturated despite the addition of over 1,000 table games and 8,000 incremental slot machines.
“Each location benefits from a high volume of passerby traffic, non-gaming-specific reasons to visit, and a large population base within a reasonable drive-to and/or train-to radius.”
RWNYC should specifically benefit from its high amount of daily traffic past the location, good proximity to a heavily populated area and two MTA subway stops nearby – one of which is one subway stop from JFK Airport.
“Assuming a base case GGR estimate of nearly US$5bn, we think it is reasonable to expect over US$1bn of combined net revenue across the three projects from hotel rooms, F&B, retail, convention and other entertainment.
“This contrasts with Las Vegas, where gaming accounts for less than one-third of Strip property revenue. We do not expect Downstate New York to resemble the Vegas model – these will remain gaming-dominated properties, especially given the higher margins associated with gaming versus hotel or ancillary spending.
“Because of this strategy, casino properties typically exhibit high occupancy even if it pressures ADR. However, we believe the three properties could see ADR upside during the initial ramp period due to strong demand and the novelty factor.
“We expect meaningful variability in ADR over time, including potential upside, as operators refine their strategies and better understand the depth of the gaming market.”
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New York’s future casino revenue to come second only to the Las Vegas Strip ‘First-mover advantage’ in the New York commercial casino launch will benefit Genting Malaysia for several years, according to CBRE Equity Research with it being able to offer gaming tables a full five years before its competitors. The research firm went on…
The post Genting to benefit from ‘first-mover advantage’ in New York for several years appeared first on G3 Newswire.