Real Estate Developers Dream of a Manhattan Casino

  • New York State is facing a budget deficit of $15bn and needs new revenue sources
  • Governor Cuomo is open to gauging interest from developers and casino operators
  • Three casino licenses are available in New York State in 2023
  • Legalizing online sports betting has gained momentum in the state
Manhattan skyline
Real estate developers are looking into the possibility of developing a casino in Manhattan and the state is considering it to boost revenues. [Image: Shutterstock.com]

State needs new revenue streams

Real estate developers are considering plans to develop a casino in New York City. While casino operators and developers have pursued this idea for many years, there has been a lot of opposition to the idea from lawmakers in the state.

the state is facing a budget deficit of $15bn

With the population density and tourist draw of the city, many see it as an ideal location for a casino. These potential plans come at a time when the state is facing a budget deficit of $15bn, with lawmakers looking for new ways to drive up revenue. 

Legislators are set to meet in Albany before the end of January to discuss the state’s budget. As part of Governor Andrew Cuomo’s 2022 budget proposal, he is open to receiving information from gaming companies and real estate developers about their level of interest in three new casino licenses. Each of the casino licenses could cost $500m, representing a significant chunk of revenue for the state before the casinos even generate any gaming taxes.

Potential suitors

According to The New York Times, a number of parties have an interest in developing such a casino in Manhattan. Vornado Realty Trust already pitched the development of a casino close to Herald Square. Atlantic City’s Resorts Casino Hotel owner Morris Bailey has reportedly been in discussions with colleagues about the creation of a casino at his Herald Square property.

L&L Holding Company has also reportedly been looking at the possibility of having a casino as the main draw of its $2.5bn tower that is currently under construction at the intersection of Broadway and 47th Street. The building will be 46 stories tall and will have a 669-room hotel. L&L has not made a proposal to state officials, but it is supposedly gauging the interest of potential casino operating partners.

The COVID-19 pandemic has led to a massive transition toward people working from their own homes. As a result, there is a lot of concern about the state of the commercial real estate market in large cities like New York. In 2020, 205 million square feet of office space in Manhattan was leased, a 64% drop year-on-year and the lowest level in at least two decades, per a report from real estate company Savills.

Likelihood of a Manhattan casino

New York State plans to issue three casino licenses beginning in 2023, though many are calling for an acceleration of the timeline. In order for this to happen, the governor and the legislature would have to approve expediting the licensing process.

Senator Joseph Addabbo, who also is the Racing, Gaming, and Wagering Committee chairman, is in favor of allowing casino licensing to go ahead sooner. He believes that such a move would help avoid some cuts in healthcare and education funding, as well as create jobs.

He is skeptical, however, of political support for a casino in Manhattan.

Assemblyman Gary Pretlow also supports the move, particularly because it would not require a hike in taxes to raise budgetary funds. He is skeptical, however, of political support for a casino in Manhattan.

Addabbo and Pretlow both believe the likeliest course of action would be upgrading the two downstate racinos to full casino licenses. The Empire City Casino in Yonkers and Genting’s Resorts World Casino in Queens currently allow for electronic slots and table games, but no games with actual dealers.

Talk of change

Talk about a potential casino in Manhattan has not been the only mention about possible casino development in the city in recent days. New York City mayoral candidate Andrew Yang has pitched the idea of building a casino on Governors Island. He believes that such a move would boost state revenue and increase tourist numbers to the city. The 172-acre Governors Island is in New York Harbor, accessible only via ferry.

While Yang’s Governors Island casino plan sounds ambitious, statewide online sports betting has gained traction. Governor Cuomo has resisted attempts in recent years to legalize online sports betting statewide, but last week he announced he is now in support of the idea, largely as a result of the state budget deficit. The hope is that a mature online betting market could generate $500m annually for the state.