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The race in the gaming industry to land up to three licenses for a downstate New York casino close to Manhattan heated up this week after the the New York Gaming Facility Location Board kicked off the official application process.
Union Gaming analyst John DeCree said downstate New York is the most lucrative remaining greenfield casino opportunities in the U.S., although it will take a sizable investment with the minimum capital investment excluding land/infrastructure at $500M. Of note, the New York gaming board also reaffirmed the $500M minimum license fee, which means interested parties are on the hook for at least $1B of capital.
Operators will also have to factor in a statutory minimum gaming tax of 25% on slots and 10% on table games or decide if they want to propose even higher rates to land a license.
Earlier this year, Union Gaming estimated that three full casinos in the New York City area could generate $4.8B of gross gaming revenue. That is before entertainment and hotel revenue is added to the mix. DeCree has the view that MGM Resorts’ (MGM) Empire City Casino and Genting Group’s (OTCPK:GEBHF) Resorts Worlds New York City are front runners for two of the three licenses given their long-standing history in the state. Las Vegas Sands (LVS), Hard Rock, Caesars Interactive (NASDAQ:CZR), Bally’s Interactive (BALY), and Rush Street Interactive (RSI) are some of the casino companies that could make a run for the third license. Locations being mentioned for a new casino include Times Square, Coney Island, and the Hudson Yards area of Manhattan. Initial gaming licenses will run for 10 years to 30 years when approved.
Sector watch: Gaming stocks that could be 2023 winners include Wynn Resorts, Red Rock Resorts and Caesars Entertainment.
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