In a note put out by Bank of America Global Research this week, the bank projected that adding three new casinos to the New York City area would make New York the second-largest commercial gaming state in the U.S.
It projects that the three downstate facilities would combine for roughly $5 billion in annual gross gaming revenue (GGR). With 10 proposals on the table from some of the largest casino operators and real estate developers in the country, the competition to be selected for licenses will be intense. Bank of America sees the projects to be chosen benefiting from high population density, domestic and international tourism, and attractive initial tax rates.
With Manhattan proposals among those likely to get a long look from the New York State Gaming Commission, there’s one challenge to building a new Las Vegas-style casino in the heart of the Big Apple that could make other factors moot: potentially stiff local resistance.
“With so much at stake and local/state politics a major factor, we aren’t going to handicap winners at this stage,” Bank of America concluded, stating it doesn’t expect licenses to be handed out until early 2024 or any new casinos to be completed before 2026.
Freedom Plaza project attempts to distinguish itself
While each of the four Manhattan proposals continue to work all back channels to build political support, one of the projects could have some key advantages when it comes to easing concerns about traffic congestion, construction hassles, and zoning limitations. The Freedom Plaza proposal for the Midtown East neighborhood is trying to forge a niche as the most acceptable locally of the four options.
“I think we have the upper hand, because we have the best partner. I think we have the best piece of property. I think we have the best program,” said Mohegan President and CEO Ray Pineault, whose group is partnering with the Soloviev Group on a project that includes two residential towers that promise affordable housing and green space near the East River.
“I think we offer the best overall project for the state of New York and New York City and the community. So, I’m biased. In that vein, we’re reaching out to our local representatives and state representatives and letting them know we want to work with the community to make sure we bring the best product forward and that we have the best project.”
If local support really is the determining factor — and the gaming commission’s website says the next step is to acquire “public support via approval of the applicable Community Advisory Committee,” as well as meeting all zoning requirements and paying the $1 million application fee — Freedom Plaza has some advantages.
For one thing, the Soloviev Group owns the valuable 6.7-acre property near the United Nations where the project would be located, meaning using public land wouldn’t be a concern as it is with some of the other proposals. The project leaders are also pushing the experience Mohegan has in the area after 27 years of running the Mohegan Sun two hours northeast of Manhattan in Connecticut.
Northeast ties could prove helpful
Pineault touted the importance of owning and maintaining a massive database on Northeastern gamblers that stretches from Maine to New Jersey and which is unmatched by any of the other heavyweight operators trying to get into the market.
“As a Northeast operator and one of the most experienced, because we’ve been here the longest, we understand the Northeast market,” Pineault said. “We know who the guests are, we know where they are, we know what their likes and dislikes are already, and we also know how to attract the high-end guests and the international travelers from having been in this area so long.”
And now the Mohegans are offering another incentive to local leaders. They’ve promised to offer their Mohegan Momentum rewards program to New York City customers, allowing them to use their points at nearby businesses. They’re promising millions of dollars for local vendors, restaurants, bars and other businesses. Some local restaurants, including Tuscany Steakhouse, already have agreed to take part.
“The Mohegan Momentum Partnership Program for New York City is an avant-garde approach to economic development,” said Melissa Fleischut, president and CEO of the New York State Restaurant Association, in a statement released by the Freedom Plaza planners. “Local restaurants will have unprecedented access to a larger customer base, prosperous partnerships and brand awareness exceeding what many owners would be able to achieve independently.”
It’s a heavyweight field of contenders and the real political jostling hasn’t even begun, but one of the major proposals for a New York City casino project is trying to make sure it makes friends in the neighborhood before forging ahead.