How New York stands to win big on downstate casino licensing

City & State New York
How New York stands to win big on downstate casino licensing
Wild Casino

Experts at City & State’s inaugural “Who’s who in casinos and sports betting” event suggested New York on its revenue streams last year alone could exceed gambling heavy cities like Las Vegas. They noted to attendees at Hebrew Union College in Manhattan that the state brought in more than $4.7 billion in gaming revenue in 2023, including $700 million from video lotteries, $850 million from sports wagering and over $150 million in commercial casinos. 

Jerry Skurnik, commissioner of the New York State Gaming Commission, attributed some of the state’s sports wagering profits to New York’s high tax rates and robust regulations. “New York's been the most successful state in the country as far as revenue from sports wagering, partially because we did what the companies did not want, by setting a high tax rate,” he said. 

“One product of gaming that nobody talks about, a cash cow for the state, is the state lottery – $2 billion –  and that helps small mom and pop stores stay in business in every community,” he added. 

However, even though gaming is thriving in New York, there remain significant delays to downstate casino licensing, a process which has been waiting approval since 2022, said state Sen. Joseph P. Addabbo Jr., chair of the Committee on Racing, Gaming and Wagering. “We should not be at this point, two years after the legislative process and the legislative vote,” Addabbo said. 

“[The] legislation should be signed, because we are done, or should be done talking about possibilities,” he continued. “We should know where these sites are, we should know what the issues are, we should be able to start to satisfy these issues. But we cannot, because this process hasn’t started. And that's a major reason why we need to start this process. We need to know where these sites are, we need to know what exactly the issues are, we cannot until we get this process started.” 

With the state Senate and Assembly last week approving a bill that would move up the deadline for downstate licensing to August 31 from mid-2025, licenses could be issued sooner and generate funding to help the Metropolitan Transportation Authority replace congestion pricing, Addabbo said. However, once applications are made, bidders should select realistic sites that comply with New York’s zoning and land-use laws, Assembly Member J. Gary Pretlow, Chair of the Committee on Racing and Wagering, told attendees. 

“It’s not really our responsibility to ensure that a potential bidder has land that's suitable to build a casino. These land use laws have been in the books probably since the early 1900s,” Pretlow said. “Anyone who is interested in building a casino should be well aware [of these laws] and not pick a spot, knowing that it's going to be next to impossible to get zoning, and then try to have us change the law to allow their location to become eligible for a casino.”

In addition to traditional streams of gaming revenue, panelist Howard Glaser, global head of government affairs and legislative counsel at Light & Wonder, urged state leaders to expand the market byauthorizing online casino gaming, which has been authorized in New Jersey, Pennsylvania, Connecticut, Rhode Island and Michigan –  yielding $6 billion in combined revenue last year. 

“On the whole, online gaming yields about three times more revenue per person than sports betting does. The industry has been working on expanding online gaming, particularly here in New York, because you're surrounded by [authorized states], and because it's happening in the state illegally,” Glaser told attendees. “That's about three and a half billion dollars stolen from New York every year. That revenue, if New York authorized, is a billion dollars in net tax revenue a year easily."

Glaser dismissed concerns that online gaming could lead to the cannibalization of brick-and-mortar casinos. Both have worked together and delivered growth, he said. 

“In every state where gaming has been introduced, land-based casinos have seen more revenue and more investment because they’re bringing in a new demographic,” Glaser explained. “Ten years down the road, there's so much competition in the entertainment field for casinos, that the client base is changing. If you don't have a digital product to offer, I fear for the revenue production of casinos going forward.”

Lawmakers at the event agreed downstate licensing should be a priority before expansions in online gaming.  “One of the things that I've been working toward is getting the downstate casino license issues civil before going into iGaming,” said Pretlow, “because we don't know who’s going to have these iGaming licenses. And if we do it right now, those licenses could go to the four upstate casinos, and we have to have room for the three downstate casinos.”