Last updated: December 20, 2024
The New York Gaming Facility Location Board (NYGFLB) has released a comprehensive Q&A addressing key aspects of the bidding process for three downstate casino licenses. Highlights include application requirements, tax rates, capital investments, and diversity goals.
The New York Gaming Facility Location Board (NYGFLB) is tasked with recommending licensees for three downstate casino licenses, with bids due by June 2025. Final licensing decisions rest with the New York State Gaming Commission (NYSGC), which aims to issue licenses by December 31, 2025.
The agency will issue licenses by 31 December 2025. The 94 pages of questions and answers followed an initial round of inquiries that were submitted the previous year after the board officially released its request for applications (RFA). The first set of questions was addressed at the end of August.
The most recent document did not unveil numerous surprises; however, it does provide clarity regarding a myriad of technical details that the applicants should look into. The inquiries embraced a whole range of subjects, which touched upon such issues as the application process and alcoholic beverage regulations to construction and taxation.
Some of the key issues culled from the latest questions and answers are as follows:.
In the Q&A, the board points out that it is only charged with recommending projects for licensing. The final word on granting licenses is the purview of the NYSGC.
The board also responded to many questions on the application requirements. For instance, a huge number of the 11 proposed casino projects in and around New York City will be licensed as partnerships or consortiums made up of casino companies, developers, and other entities. The board explained some of the application requirements:
Key owner applications require any persons with 5% or more ownership to provide information and obtain signatures. Moreover, license is required from holding companies that own one-third or more of the shares. Also, all officers and directors of the holding company are required to file individual license applications.
Background checks: Separate background checks are required for all the principal shareholders and the directors.
Application fee: The board was ambiguous regarding consortiums and who should pay the $1 million (£798,371/€964,350) fee. It stated that consortiums should “use their best judgment” in deciding who is responsible for payment. The board also announced that all applicants are compelled to use the official Gaming Facility Licence Application that is found on the board’s website.
Currently licensed video gaming venues or commercial casinos are compelled to apply for a new license. Individuals or bodies holding existing video gaming licenses are also compelled to apply for a new license. However, those holding current commercial casino licenses are allowed to amend their initial application in case of any significant changes.
However, if a higher-level application is sought, it is required to apply for a new one.
One of the major factors the state has identified is “speed to market,” which has created an expectation for the two existing racinos, MGM’s Empire City and Genting’s Resorts World New York City, to be licensed. Both facilities already have VLT licenses as racetracks. It is expected that they would be able to do so quickly and replace VLTs with slot machines.
However, the commission mandates that VLT facilities “must have evidence that capital investments required for facilities to operate have been made to said facility, which shall not be less than $500 million, before commercial games operations can start.”
VLT licences will be considered expired on the effective date of those licensees’ commercial casino licences.
In response to a question about the proposed tax rate, the board said: “The applicant must assume a 25% tax rate on gross gaming revenue (GGR) on slot machines and a 10% tax rate on gross gaming revenue from table games.”
For comparison, digital sports betting in New York is taxed at 51% of GGR.
The New York gaming law requires that Community Advisory Committees (CACs) be established in the district of each applicant. These committees comprise members from the state assembly, local officials, and community organization leaders.
The number of public hearings that each CAC needs to conduct was the question the second round of inquiries addressed. There are at least two.
Upon the close of the hearings, “It will be up to each CAC member to individually determine if, in the member’s opinion, public support has been evidenced and an application should advance for board consideration. If a CAC votes to advance an application, such CAC is required by Racing, Pari-Mutuel Wagering and Breeding Law section 1321-d(3)(e)(x) to issue findings establishing public support.”
New York law explains, according to the board’s answers, that each CAC will have “specific appointing authorities”. Those appointing authorities will be determined by the gaming commission. The answers also show what happens when there are overlapping appointing authorities and details that the gaming commission shall provide key information to a member of a CAC once appointed.
The community committees are allowed to determine their schedules, but must meet the deadlines outlined in the RFA.
In response to an inquiry as to whether a CAC recommendation may carry some appeal, the board said simply that “an applicant may be able to avail itself of potential remedies afforded by the judicial system.” This latter statement could open the door to the possibility of court disputes over project recommendations.
The board stated that “applicants should already have begun an environmental review. If an applicant hasn’t, an applicant must take prompt action…. Environmental review must be completed no later than the date when the CAC is to vote or 30 September 2025.”
Some bidders are presently under an environmental review process. Early this December, Las Vegas Sands received legislative approval for its environmental plan.
The board answered several questions relating to the creation of temporary casinos in relation to permanent facilities under construction. A temporary casino is any one that has “a gaming floor that is not located within the footprint of the final, fully developed gaming floor, requires substantial reconstruction to be incorporated into the final, fully developed gaming floor, or lacks features required to be considered fully operational.
The board said that the gaming floor “may be opened in phases” provided that the area is placed within the “footprint of the final, fully developed gaming floor.” It would not be allowed to close, nor would reconstruction be allowed to take place unless it is “fully integrated into the permanent gaming floor.
Temporary facilities are not included in the definition of “phased construction.” Once a permanent facility has been constructed, all alterations must be approved by the gaming commission. In terms of facility size, the gaming board did not provide any specific number or percentage of total space. Instead, it said, “that an applicant must provide a schedule of square-footage usage detailing intended usage (i.e., gaming floor, retail, back of house, utilities, etc.).” In addition, the board explained that applicants must have at least $500 million in capital investments for operation pre-opening.
Interestingly, the board made this recommendation when asked how much of the completed slot floor should be dedicated to “domestically manufactured” machines: “Whenever possible, domestically manufactured slot machines should be acquired.”
Several people asked about the rules surrounding alcohol. The board responded that the current New York law governing casinos and racinos will be adopted by the new casinos. The law spells out rules surrounding free drinks, including no more than two being served to a single customer at one time; no open bars or all-you-can-drink for a fee except at private events; no drinking games or games where alcohol is a prize; and no alcohol being served to minors.
A questioner asked, “RFA page 30 uses terms like ‘assure’ and ‘commitments’ when talking about delivering the highest number of quality jobs, but does not clarify what portion of those would be contractually enforceable. To the extent those commitments aren’t contractually enforceable, can the board speak to how you’d verify them? The response from the board is: “Employment commitments will be a condition of any licence granted, thus subjecting the licensee to remedial action for failure to meet the commitment.” Furthermore, the board recommends that applicants utilize the “Good Jobs Principles” established by the US Department of Commerce. Additionally, it elucidates the method for ascertaining pay ranges across various job classifications.
The board addressed inquiries regarding diversity, specifying that a “proposal must include gender, racial and service-disabled veteran composition of ownership and leadership and other population characteristics.” Additionally, it recommended that applicants should undertake “good faith efforts” in employing New York state-certified businesses “owned by minorities, women, and service-disabled veterans.” The board explained its requirement of a 30% “utilisation goal” for firms that are minority and women-owned. This requirement only applies to “pre-opening spend and ongoing capital expenditure.” In the process of evaluating the bids, the board will also look at diversity in leadership, education about diversity and inclusion, policies developed, and resources for diverse staffing.
