Significant changes have occurred in the competition for casino licenses in southern New York State, with two popular proposals—Caesars Times Square and the Avenir project—recently rejected by the Community Advisory Committee (CAC). Both projects failed to meet the advancement requirements in their respective committee votes, with a score of 2-4, complicating the competition landscape for the remaining six proposals.
Community Committee Rejection Details
Last Wednesday, the New York State Community Advisory Committee rejected the casino construction proposals from Caesars Entertainment and Avenir in two consecutive meetings. Both committees voted 4 against and 2 in favor, failing to reach the required threshold of four affirmative votes. Each meeting lasted less than 30 minutes, demonstrating the committee's decision-making efficiency.
Current Bidding Landscape and Pending Projects
Six proposals are still competing for three licenses. The Liberty Square project will be reviewed by the committee this Monday, while MGM Empire City and Resorts World New York are scheduled for review on Thursday. Analysts believe that the Liberty Square project faces higher risks, partly due to the precedent set by the rejection of the first two projects.
Details of Rejected Projects and Reactions
The Caesars Times Square project planned a $5.4 billion investment to transform an existing office building on Broadway into a comprehensive resort. The Avenir project, proposed by Silverstein Properties, had a total investment of $7 billion, including a casino operated by Rush Street Gaming and a Hyatt hotel with 1,000 rooms. Following the rejection, the related companies expressed disappointment but stated they would continue to focus on business development opportunities in New York State.
Analysis of Potentially Advantageous Projects
Industry observers believe that projects like MGM and Resorts World may have relative advantages. These projects operate based on existing facilities, which gives them significant advantages in terms of market entry speed and community relations. Resorts World's hearing received a higher evaluation, while the MGM project faced only mild local opposition.
Historical Precedents and Decision Uncertainty
The history of casino license issuance in northern New York State suggests that regulatory decisions can be unpredictable. In 2015, all applications from the Orange County area were overlooked, and licenses were ultimately awarded to other regions. This precedent adds uncertainty to the current bidding outcomes.
Economic Factors and External Influences
License decisions will consider multiple economic factors. The licensing fee for downstate casinos is as high as $500 million, with three licenses potentially generating $1.5 billion in direct revenue. Meanwhile, New York State is facing a $34.3 billion budget shortfall. Additionally, macroeconomic conditions, rising construction costs, and the mayoral election in November could also influence the final decisions.
Industry Expert Views and Analysis
Industry consultants note that New York State is a challenging gambling market, with mobile sports betting taxes as high as 51% and casino gambling taxes ranging from 10-30%. Experts believe that the final number of licenses issued and the recipients could yield unexpected results, with the Japanese casino licensing process serving as a reference example.
