New York is certainly taking its time in awarding the three available licenses for the downstate region. Initially, on track to be issued by the end of 2023 or early 2024, experts are now speculating whether the process could be extended until 2025. One of them is Brendan Bussmann, founder of B Global Advisors who recently shared his thoughts on the matter.
At the start of the calendar year, the Gaming Facility Location Board kicked off the first stage of the licensing process as it started a Request for Applications. However, 10 months later the license issuance still remains in the early stages, despite the New York State Gaming Commission publishing a Q&A report for candidates and is now working on the second set of questions.
Process Coult Stretch to 2025
In a report for Truist Securities, Mr. Bussmann noted it remained a mystery how long the second phase of the initial stage would take. In his words, this will further delay the process, as the subsequent stages will be even more challenging and intimidating considering it involves bids from companies and conglomerates worth billions of dollars.
On top of dealing with downstate licenses, Mr. Bussmann reminded that the Empire State is also looking to renew discussions with the Seneca Nation of Indians over a new gambling compact. The current contract expires next month, which could be another hurdle for the state in accelerating the downstate casino process, as it will most likely require the attention of state officials.
Another challenge is that it was recently revealed that Scott Sibella, a former MGM Resorts and Genting Group employee, was involved in an illegal gambling ring in Nevada. Mr. Bussmann pointed out that previously two of the commercial licenses were considered almost nailed on for Resort World NYC and Empire City Casino, which may not be the case anymore after the scandal.
The expert also discussed the impact of online casinos in the state. It is expected that Sen. Joe Addabbo will once again present a bill to legalize online gambling in the state. He believes that it would be able to generate more than US$1 billion in tax revenue which would help the state fill the budget gaps projected to come in the next years.
At the moment, seven other U.S. states already offer iGaming as a legal option, including the neighbouring Pennsylvania, New Jersey and Connecticut. Senate Racing, Gaming & Wagering Committee chair Joe Addabbo who sponsors the legislation commented that New York needs to follow the example not to lose customers to other states.
iGaming Would also Come with a Hefty Tax Rate
However, Mr. Bussmann claimed that iGaming would at a minimum serve as a lifeline to the online sports wagering operators if they have the luck to be able to offer online gambling. He also predicts a 51% tax rate on digital casinos as the state is looking to make profits. In his words, this is the only thing consistent in the state as revenue is the thing that drives change in the state.
