Cuomo Controls the Commission Which Appointed the Siting Panel for Casino Licenses
New York Governor Andrew Cuomo is at the center of his state’s casino gambling initiative. New York state is set to approve up to four new casino licenses this fall. The licenses are meant to bring jobs and prosperity to regions of the state which have faced high unemployment in recent years.
Governor Cuomo controls the New York Gaming Commission. The gaming commission selected the siting panel which will decide which of 16 different companies receive a license. Therefore, the governor is ultimately responsible if those casinos thrive or fail.
Success Is Not Assured
The market is not where it was in the 1990’s and early 2000’s. It is not a 100% proposition that the new casinos will be big successes. In 2014, the adjacent state of New Jersey has lost four of its casinos to closings. The Atlantic City gaming venues simply could not survive in a saturated market in an economy still not fully recovered from the 2008 real estate crash.
According to the Gaming Commission chairman in New York, the siting panel might decide to award no licenses. That might raise a few eyebrows after the millions of dollars spent in development plans and license processing fees, but the panel is tasked with the responsibility of determining whether the market can sustain such businesses. If the state agrees to the licenses, it is estimated that they would bring in $430 million to state and municipal treasuries.
Genting Plans to Bring New Customers
The gaming companies are not overly concerned about saturation of the northeastern market, though they acknowledge it exists. Stefan Friedman is a spokesman for Genting Group Limited, a Malaysian multinational conglomerate which placed a bid for a casino in Orange County.
Friedman told Bloomberg, “No doubt there is a saturation issue in the Northeast. What resorts like ours are trying to do is attract a new clientele.” Genting is undaunted, as it placed the largest bid ($1.5 billion) for a resort-casino in Tuxedo, which sits about 45 miles from New York City.
Asian Player List Is Substantial
Genting plans to tap a longstanding, large database of Asian customers from its operations in the Far East. “Asian high rollers” are a catchphrase in the gaming industry these days, because of the rising wealth of China and the “Asian Tigers” economies. Not only did these gamblers make Macau and Singapore top gaming spots, but the influx of Asian gamblers to Las Vegas has helped America’s gaming capital return to health. Each month, the Vegas Strip winnings at baccarat, which is the favorite of Asian players, continues to increase.
Caesars Has a 45 Million Player Database
A rival to the Genting plan is Caesars Entertainment, which plans an $880 million casino in the Orange County area, about 50 miles from New York City. Caesars has the largest database of players in the United States (45 million), while it plans to promote itself by partnering with celebrity chefs like Bobby Flay and Gordon Ramsay to add restaurants and hot spots to their integrated resort.
Mohegan Sun is not competing directly with Caesars and Genting. Instead, the Connecticut tribal gaming company hopes to build a $550 million resort in the Catskills, about 90 miles from Manhattan. Mohegan Sun hopes to attract the gay and lesbian, bisexual and transgender community to their casino. Their promotion dovetails with a local tourism association’s plans to do the same.
All 16 Bids Could Be Declined
Rob Williams, who is acting director of the New York State Gaming Commission, says the panel has full power to reject all 16 proposals. Williams say the siting panel will not offer a license unless they believe the plans are feasible. Williams said, “The regional market is being viewed by the members. If they determine that the demand is not there or the model is not appropriate, they have the ability to reject every application.”
Reasons for Pause
Despite the building excitement about the announcement of licenses, there are reasons for pause. New Jersey is considering plans for a casino in the Meadowlands area of North Jersey. If this were to happen, then New Jersey would offer the casino destination closest to New York City. This could undermine the Genting and Caesars developments, which themselves might undermine the operations in Upstate New York.
Also, the gaming market appears to be a bit soft at the moment. The state’s video slots parlors are off to their worst start since 2011. This follows an overall nationwide trend that has gaming machines down over the past year. It might be that American gamblers have finally awakened to the fact slot machines are among the worst bets in the casino.
