Why New York’s casino bidding process will continue to face delays

ALBANY, New York — The wait for a downstate casino is not ending anytime soon.

The state Gaming Commission indicated last week that it likely won’t start accepting applications in the high-stakes casino bidding war until the City Council approves a land use change necessary to build a casino in the five boroughs.

The state commission previously said it would also not begin considering those applications until state-appointed advisory committees meet to evaluate the bids.

That means casino licenses won’t be awarded for many more months, if not longer — much to the chagrin of gaming supporters.

“I think the word frustrating just doesn't capture my emotions,” state Sen. Joseph Addabbo Jr., a Queens Democrat, said.

The state Legislature in 2022 passed a law to expedite the process with the hope that the bidding would have started last year.

The commission is expected to provide further detail into the process’s timeline at its meeting Monday. At the very least, the regulatory body suggested it will not open the bidding process until the approval of a citywide zoning change, which could happen in the coming weeks.

But it is likely they could wait on accepting applications until some bids obtain additional zoning approvals — like state legislation or city zoning modifications — specific to their projects.

The revelations represent a look inside the tight-lipped agency responsible for handling and deciding the high-stakes casino bidding process.

“The Board is cognizant of the many factors relating to the zoning requirement, including New York City’s proposed text amendment relating to gaming facilities and of the many zoning-related questions posed by applicants during the first two rounds of questions,” reads a statement from the Gaming Commission, referencing the powerful Gaming Facility Location Board, which will ultimately award the licenses. “The updated timeline, expected to be finalized soon, will consider these and other factors.”

The council’s subcommittee on zoning and franchises will hold a hearing on a citywide amendment to enable casino development Tuesday, one week after the process was launched by the City Planning Commission.

And despite efforts by the state Legislature and some casino companies to hasten the process, each project must first get sign-off from ad hoc casino boards appointed by state and city leaders for their applications to be considered. None of those boards have even been set up yet.

So the process to award three gambling licenses in the nation’s largest untapped gaming market, which was initially expected to be at or near conclusion by now, appears far from over. As a result, some of the world’s largest casino companies remain in an ongoing and costly lobbying campaign to win local and, then ultimately, state approval.

The projects will cost billions of dollars and are massive — one proposal would place a casino next to Citi Field in Queens, another aims to attract gamblers to Times Square and a third to the Coney Island boardwalk.

But two years after the state agreed to expedite the licensing process for the New York City area, the commission is urging patience.

“The Gaming Facility Location Board will provide applicants a reasonable amount of time to obtain zoning approval for their proposed projects – a statutory requirement for Board consideration,” the gaming commission said in a statement to POLITICO.

Addabbo and Assemblymember J. Gary Pretlow, the chairs of the Legislature’s gaming committees, along with supporters who are eager to see tax revenue from the casinos, said they are disappointed the licensing process has not moved forward more quickly.

Meanwhile, casino bidders told POLITICO that the communication of the timeline from the Gaming Commission has been opaque.

“Anybody who tells you that they know when these responses are going to happen, and what the timeline is going to be for this process entirely, is just lying, because that's a complete unknown,” one person with close ties to one of the casino bids said on the condition on anonymity to not would affect their bid’s odds.

“This is the fight of our life,” the person added.

In 2022, Gov. Kathy Hochul signed into law the downstate casino bill sponsored by Addabbo and Pretlow. Since then, nearly a dozen casino bids, backed by an army of lobbyists, have emerged to battle for the three licenses.

They are currently in the second round of a wide-ranging question-and-answer process with the Gaming Commission. State statute requires that once the agency returns answers to the second set of questions, the clock starts on a 30-day window for bidders to submit final applications.

But there has been no update from the commission, nor any formal communication on when bidders should expect those answers.

The commission said its decision to hold off releasing the answers to those questions or begin evaluating bids is in line with the law that requires local approvals to move forward.

Preemptively evaluating applications before certain bidders fully deal with zoning and community processes would be unfair, and thus no longer the type of “competitive” bidding designed by the Legislature, the commission indicated.

Still, the slow pace hasn’t slowed the lobbying expenses.

New York Mets owner Steve Cohen has hired lobbyists to try to win state support to build an $8 billion casino with Hard Rock; Sands wants to build a sprawling resort on Long Island; and Wynn Resorts is partnering with developer Related Cos. for a $12 billion plan for the westside of Manhattan.

Meanwhile, the expected front-runners for two of the licenses, MGM’s Empire City in Yonkers and Queens’s Resorts World New York City, are ready to open in-person casinos within months. It's a reason Pretlow and Addabbo — whose districts include the two facilities, respectively — are eager to see the process move along.

The two locations already operate video lottery terminals and racetracks on the property, making the conversion to in-person gambling a relatively easy lift. And the locations already have local support.

“I'm just disappointed with the delay that we're experiencing, because not only are we missing the licensing revenue, but we're missing income tax revenue from the people that would be working there,” Pretlow said. “In light of the deficit that we have in this year's budget, if we had an extra billion and a half dollars in the coffers, we'd definitely restore a lot of the cuts that were made in this year's budget.”

And beyond bidders and lawmakers, powerful labor groups are waiting to see the birth of multi-billion dollar projects that would provide thousands of union jobs.

“HTC is eager to see new downstate casinos and the creation of thousands of exceptional, union jobs that they’ll bring,” said Bhav Tibrewal, political director for the NY Hotel & Gaming Trades Council.

“But we also recognize that the path to those projects is a deliberative and comprehensive process involving state and city stakeholders, and that’s the phase we’re in now.”