Last updated: January 19, 2024
Howard Glaser, global head of government affairs at Light & Wonder, believes that three New York City-area casinos could generate gaming revenue comparable to or exceeding the Las Vegas Strip. The competition for licenses in the untapped New York City market has attracted major gaming companies, despite the high upfront costs, potentially leading to significant profits over the long term.
Just three casinos in the New York City region may produce more gaming revenue than those found on the Las Vegas Strip.
Howard Glaser, global head of government affairs at Light & Wonder, recently brought attention to the enormous potential revenue from three casinos in New York City during an interview with CNBC. Glaser cited an estimated $8 billion in casino revenue annually, citing a study done by New York State and drawing a comparison to the $8 billion the Las Vegas Strip brought in last year.
In a recent CNBC interview, Glaser stated that the potential revenue figures are staggering. A study conducted by New York State itself estimated that three casinos could generate $8 billion in revenue annually. To put things in perspective, last year the Las Vegas Strip brought in $8 billion from gaming revenue.
That’s probably a reference to gross gaming revenue (GGR), as the total monthly revenue of Nevada casinos has been consistently above $1 billion for a while. In addition to gaming revenue, the overall figure in Las Vegas and throughout Nevada usually includes non-gambling items like food and drink, hotel rooms, and shows.
Gaming companies are investing millions of dollars in New York City in the hopes of obtaining one of the three licenses that the city’s regulators may grant later in the upcoming year. This is because New York City is widely considered one of the world’s greatest unexplored casino markets.
Industry titans like Wynn Resorts, Caesars Entertainment, and Las Vegas Sands have all shown interest in the competition. Rumour has it that two of the permits will be grandfathered in for MGM Resorts International’s Empire City Racino in Yonkers and Resorts World New York in Queens; thus, the other companies are essentially competing for one permit. Regulators and legislators, however, have not openly acknowledged that those two locations have an advantage over their rivals.
Even though the competition for the three downstate casino licenses has been drawn out and will probably cost the operators involved a lot of money in the end, the math shows that the winners will probably come out on top.
Three casinos in New York City equal the entire Las Vegas Strip? How is that possible? Glaser told CNBC as much. There are 50 million tourists and 23 million residents in this area. Executives from casinos are interested in this market.
Casino operators are drawn to New York City, but the state has put gaming companies in a difficult position. In addition to the fact that about a dozen companies are fighting for the three permits, there are rumours that the $500 million license fee may now be as much as $1 billion because the state needs the money. After all, residents are leaving the state.
Although $1 billion may seem like a lot of money upfront—and it is—the three operators who obtain the permits may end up splitting nearly $200 billion in revenue over 20 years, according to Glaser’s statement to CNBC.
Hard Rock International’s proposal for a gaming venue near Citi Field in Queens and Las Vegas Sands’ plan for a casino hotel in Nassau County could cost as much as $8 billion and $6 billion, respectively, because the $1 billion permit fee does not cover the construction costs of the operators.
CEOs of Sands and Hard Rock, Rob Goldstein and Jim Allen, respectively, told CNBC that without casinos, it would be very difficult for the projects to make a sufficient profit at those price points.
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