State officials have finalized the New York State budget for fiscal year 2024, and it includes allocating the initial funds generated from the three available downstate casino licenses to support the Metropolitan Transportation Authority (MTA).
Once the New York State Gaming Commission (NYSGC) determines which three NYC casino applicants will be selected to proceed with their projects, each of them will be required to pay a $250 million license fee and make a minimum $250 million investment.
All $1.5 billion generated from the licenses will be directed towards MTA funding, along with a share of the estimated $231 million to $413 million in incremental annual tax revenue.
The funding is crucial for the MTA as it would prevent potential service cuts in subways, buses, and commuter railroads. However, it’s important to note that the MTA won’t receive the funds immediately.
The question now is when the MTA will actually receive the money from the licensing fees.
NYSGC downstate casino license timeline is definitely unclear
The NYSGC hasn’t set any firm deadlines for when each stage of the casino license bidding process will be completed, which has raised questions among Wall Street investors.
However, earlier in May during a Q1 earnings call, MGM Resorts International CEO and President William Hornbuckle shared his expected timeline, shedding light on how things appear from an applicant’s perspective.
“On the development front, we are working through the RFA process in New York,” Hornbuckle said.
“We plan to submit our formal application this summer and hope to receive a response in the first half of next year. We continue to anticipate total investment in New York to be approximately $2 billion, inclusive of the licensing fee.”
Many MTA financing not anticipated until 2026
Sen. Joe Addabbo, who also serves as chairman of the Committee on Racing, Gaming, and Wagering, is not supportive of Gov. Kathy Hochul’s plan to direct funding to the MTA. This is because the MTA won’t receive the funds until 2026 due to the lengthy casino licensing process.
Addabbo is a strong advocate for legalizing New York online casinos and believes it can provide a new stream of revenue that can be obtained more quickly.
“However, I will offer a counterproposal to the governor: We can give her more significant revenue in a faster timeframe than 2026, and it’s unspoken for money because it’s a new product, and that’s iGaming,” Addabbo told PlayNY.
“So we’re not shifting it from education. In the bill, it says education, but it’s a placeholder. This is new revenue. So if you need to use it for healthcare, for social services, if you want to use part of it for the MTA, here it is.”
Addabbo also disagrees with the FY2024 budget as it currently sends gambling tax revenue to the state’s education system, and he does not want funding to be taken away from schools.
A fix on the downstate casino license process
We are still in the early stages of the license bidding process, with very little progress made in recent months.
The Gaming Facility Location Board (GFLB) will ultimately select the three casino applicants eligible to proceed with their plans. However, the NYSGC will have the final say on which groups win the licenses.
An initial step in the process involved all parties interested in obtaining the license to submit their questions to the GFLB. An update on the NYSGC website from March 2 states that officials are currently reviewing the questions and preparing responses.
The NYSGC previously stated that the board would provide responses to the groups’ questions by late March. Two months have passed since that deadline, and answers have yet to be released. Additionally, the GFLB has not provided an updated schedule for the responses.
If this is any indication of how the downstate casino license process is going, it suggests that the process will be lengthy and slow.
Delivered in Oak Lawn, Illinois, Matt graduated from Northern Illinois University, where he covered NIU hockey for the Northern Star. Since then, Matt has focused on NFL and NBA coverage for various websites and podcasts before shifting gears to casino and gambling coverage.
