Las Vegas Strip Casino Operators Are Planning Something New (And It’s Huge)
The game was once unique to Las Vegas and Atlantic City. This made these two cities very special destinations and gave enormous power to the companies that held gambling licenses in these places.
Now between the rise of casinos on Native American tribal lands, some of which are operated by Caesars Entertainment (CZR) – Get the report from Caesars Entertainment Inc. and MGM Resorts International (MGM) – Get the MGM Resorts International Reportand by changing the laws in a variety of states, legal casinos have become much more prevalent.
This creates opportunities, but it also creates risks. Casinos are not cheap to build. Investments can range from hundreds of millions to over a billion dollars. And while many markets have done well, there’s no guarantee that the demand for new casinos will be endless.
But New York City, which was banned for full casino licenses, now has state approval for two casinos in that area.
This does not mean that Caesars and MGM will open casinos next to Madison Square Garden or on Fifth Avenue. Instead, it could mean MGM getting a full license to its Westchester Empire Casino, a property just outside New York that currently has video slots.
No matter where the casino, MGM, Caesars and Wynn Resorts are (WYNN) – Get Wynn Resorts, Limited Report seem to be in the mix for licensing. Even Hard Rock International, owned by the Seminole Tribe of Florida, which has taken over operations from The Mirage and plans to build a guitar hotel on that site, could compete for the project.
What’s going on in New York?
New York State has moved forward with plans to allow two full casino licenses in the greater New York area, according to the Las Vegas Journal Review. These licenses will not be cheap, but despite everything, many companies have shown interest.
“The legislation sets a minimum license fee of $500 million, but gives the New York State Gaming Commission the flexibility to accept higher offers,” said John DeCree, principal analyst at CBRE Equity. Research, based in Las Vegas.
“Tax minimums for slots and tables are expected to be set at 25% and 10%, respectively, but will ultimately be determined through a bidding process similar to the mobile sports betting licensing process. “
It’s a tiered price with very high taxes (Nevada has a top tax rate of 6.75%), but that shouldn’t deter businesses. New York not only has a dense population of nearly 8.5 million, it is a major tourist attraction that attracts visitors from all over the world.
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Resorts World, which has a limited casino license for its property in New York’s Queens borough, would also bid for a full license.
New York City Councilwoman Nantasha Williams offered her support for Resorts World’s bid for a full casino license, QNS reported.
“Southeast Queens has been disproportionately affected by the pandemic. Together with Resorts World, we can build a better future with an intentional recovery that puts the community first,” Williams wrote in an op-ed.
“If the Resorts World location in Queens were granted an expanded license, it would directly create hundreds of well-paying union jobs in an area that needs them most.”
Caesars May Pass on NYC
While Caesars was named by the Review-Journal as a candidate for a license in New York, its chief executive, Tom Reeg, raised doubts about it during his remarks during the company’s fourth quarter earnings call. society.
“So in New York, how do I politely answer that question? New York is a tough regulatory state. I think building there is going to be extremely expensive. I think the licensing fees are going to be extremely high,” did he declare.
“And I think it’s likely that you have to solve another problem of the city in addition to creating the jobs that you create in the construction of a casino. So it will not be enough to choose a site, to build a casino , create jobs and generate a return. We will have to make other investments there as well.
Reeg didn’t completely rule out the possibility, but he toed that line when it came to the idea of building a casino. At the same time, he seems open to exploiting one.
“So I would say that on our balance sheet, it’s extremely unlikely that we would make a material investment in New York real estate,” he said.
“Now there are others who have a different view in terms of the investment opportunity there for various reasons. If any of these developers want to talk to a manager who brings in 65 million members rewards and powerful brands, we would be very interested in having this discussion.”