MGM MGM Resorts International

By Jimmy Vielkind 

New York state is facing a budget crunch, and casino lobbyists say they have a solution: expand gambling options in and around New York City.

Representatives of Las Vegas Sands Corp. traveled to Albany last week to meet with leaders of the state Senate. They have hired lobbyists close to Gov. Andrew Cuomo and hope to build a facility somewhere in the five boroughs that will draw in tourists from as far as Florida.

MGM Resorts purchased the Empire City Casino in Yonkers earlier this year, and on Tuesday its executives met with legislators from the area. MGM and Genting Group, which operates the Resorts World Casino near the Aqueduct Racetrack in Queens, would like to convert their facilities into full-fledged casinos with table games. Currently, the facilities are only allowed to offer video-lottery terminals.

"The New York City gaming market is a tremendous opportunity to generate hundreds of millions of dollars of incremental tax revenue that could be used to support local schools and revitalize the MTA. Additionally, it would allow New York an opportunity to capture tax dollars that are currently flowing out of state," Genting and MGM said in a joint statement.

In an interview, Sands spokesman Ron Reese estimated that the state could immediately generate $1.5 billion by issuing three new licenses and that three new casinos could generate $900 million a year for the state. Resorts World and Empire City each send about $300 million a year to state coffers.

"Our vision for New York would be to do something of size and scale that would attract tourists from up and down the eastern seaboard and give international visitors a reason to stay another night," Mr. Reese said.

New York's first non-Indian casinos were authorized in 2013 when voters amended the State Constitution to allow up to seven facilities around the state. Mr. Cuomo and legislators also enacted a law directing the state to initially issue four licenses in upstate areas and hold off on the remaining licenses for seven years.

That clock ends in 2023, but gambling companies aren't waiting. An unexpected drop in income-tax revenues in January increased the size of the state budget deficit for the coming fiscal year, which begins April 1, to $5.9 billion.

The political prospects of accelerating the new casinos are mixed. State Sen. Joe Addabbo, a Democrat whose district includes Resorts World and who chairs his chamber's committee on racing and wagering, said it was a "great discussion" but predicted it would wait until after the budget is adopted.

Senate Majority Leader Andrea Stewart-Cousins, a Democrat from Yonkers, said there were "a lot of moving parts" and "a lot of things that need to be clarified" about new casinos. Assembly Speaker Carl Heastie said Democrats who dominate his chamber were very concerned by authorizing more casinos in New York City.

In January, Gov. Cuomo said he had "no opinion of making any changes at this time." A spokesman this week declined to elaborate.

The existing casinos in Seneca, Schenectady, Sullivan and Tioga counties haven't met their expected revenue projections. Jeff Gural, owner of the casino at Tioga Downs, said he would be open to accelerating the downstate licenses if some relief for the upstate casinos were worked out. Collectively the four casinos contributed more than $150 million to state and local governments in the last 11 months.

"If I were the governor and I needed $2 billion, and it goes to education, I would jump at the opportunity to work out something," he said.

So would former Gov. David Paterson, Mr. Cuomo's predecessor and chair of a group advising Sands in New York. The chief executive of Sands is Sheldon Adelson, a prolific Republican donor who is trying to expand into deep-blue, union-dominated New York.

Mr. Paterson said he was impressed by Sands' Las Vegas facilities and said the company has agreed to unionize the workforce that builds or operates any facility. He said the company was promising jobs and not asking for any subsidies.

"Nobody called me about anything like this when I was governor," Mr. Paterson said. "I wish they had."

Write to Jimmy Vielkind at Jimmy.Vielkind@wsj.com

(END) Dow Jones Newswires

March 12, 2019 18:02 ET (22:02 GMT)

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