NY suitors poss including Asia ops, asked for US$500mln fee

Jan 04, 2023 Newsdesk Latest News, Top of the deck, World  

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Suitors for any of the up to three commercial casino licences on offer for downstate New York (pictured), in the United States, will need to give the authorities there at least US$500 million, payable within 30 days of the award of a licence, it emerged on Tuesday.

Large gaming operators with Asia venues: Malaysia’s Genting group; Las Vegas Sands Corp, MGM Resorts International; and Wynn Resorts Ltd; are among those that have either been linked by analysts with a bid for a New York downstate licence, or have directly expressed interest previously.

The information on the size of licensing fee – bidders can propose a higher amount – emerged on the day of a meeting of New York’s Gaming Facility Location Board.

The relevant casino permits will be for a period of between 10 years and up to 30 years, depending on the size of investment pledged.

The state had launched in October 2021 a request for information procedure for would-be suitors.

How much revenue each project says it can provide New York State – and how many jobs they can create directly and indirectly – will be important elements when assessing the proposals, according to a 2022-23 fiscal year budget.

Possible locations mentioned in the document were the borough of the Bronx, Kings County, New York City, the borough of Queens, and Richmond County.

Industry consultancy Spectrum Gaming Group LLC produced a market study for the New York State Gaming Commission issued in January 2021. Its executive summary suggested that downstate locations “clearly exhibit the greatest potential for growth”.

The report added that upstate New York – where the bulk of the state’s casino gross gaming revenue is currently generated – was at the time of the survey “operating above its reasonable potential, indicating market saturation and limited growth potential outside of organic or inflationary growth”.

The report said that the state’s overall gaming revenues rose from US$2.9 billion to US$3.8 billion from 2015 to 2020, while non-gaming revenues at such venues rose from US$400 million to US$549 million, resulting in total revenues growing from US$3.3 billion to US$4.4 billion.

Taxes on gaming directly contributed US$1.3 billion in 2015 and US$1.6 billion in 2020, added the Spectrum Gaming report.

Malaysia’s Maybank IB Research has suggested Genting group would be a front runner for a downstate New York casino licence. The group already runs an electronic games facility called Resorts World Casino New York City; and has investment in Empire Resorts Inc, which runs the full-service casino, Resorts World Catskills, in upstate New York.

Genting also runs Resorts World Genting, in Malaysia, and Resorts World Sentosa, in Singapore, as portions of its gaming assets globally.

Las Vegas Sands Corp reiterated interest in New York State in its first-quarter earnings call in April. The group controls Macau operator Sands China Ltd, and runs the Marina Bay Sands casino resort in Singapore.

Bill Hornbuckle, chief executive and president of MGM Resorts, said in the firm’s third-quarter earnings call that the group expected the New York State authorities “to issue the casinos RFA [request for applications] by early January” this year. “We’re developing a compelling proposal and we look forward to submitting it in the coming months,” he stated.

MGM Resorts runs an electronic games facility called Empire City Casino in Yonkers, in Westchester County, New York. The firm is also parent to Macau concessionaire MGM China Holdings Ltd.

In September last year, Wynn Resorts – the parent of Macau operator Wynn Macau Ltd – announced a partnership with U.S.-based real estate firm Related Companies LP to bid for a downstate New York casino licence. The Related Companies entity is the developer of New York City’s Hudson Yards project, and the joint bid proposes a casino resort on the undeveloped western portion of Hudson Yards.

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