Casinos License Fees Would Bolster NY Transit System

Casinos License Fees Would Bolster NY Transit System

New York’s transit system stands to be a big winner when the state awards up to three new casino licenses.

According to a release from Gov. Kathy Hochul’s office, the state budget passed this week allocates up to $1.5 billion from the license fees to the Metropolitan Transit Authority (MTA) if the New York State Gaming Commission (NYSGC) selects up to three bidders seeking to open casinos in or around New York City.

The state has set a $500 million fee for each available license.

In addition, the MTA also would receive an unspecified portion of the gaming tax dollars the new downstate casinos would generate. Three new casinos are expected to generate between $231 million to $413 million in taxes annually.

When Hochul unveiled her budget proposal three months ago, she brought up the idea of using casino taxes to help stabilize the MTA, which has been struggling fiscally since the COVID-19 pandemic began. While federal pandemic relief funds stabilized the agency in recent years, ridership numbers have yet to return to pre-2020 levels. Because of that, MTA officials have warned the agency faces a so-called “fiscal cliff” with multi-billion dollar budget deficits looming in the near future.

“With this budget, the MTA will have the resources it needs to keep serving New Yorkers for years to come,” Hochul said in a statement.

On Thursday, Sen. Joseph Addabbo, the Queens Democrat who heads the Senate Committee on Racing, Gaming and Wagering, told that he was able to retain some of the casino tax revenue for education, which was the intended purpose for the seven commercial casino licenses New York voters approved a decade ago.

“The budget is a negotiated document, and we realized that the license fee was revenue for the state anyway," Addabbo said.. "The license fee would have never went to education. So that could go to the MTA. Then, we worked on the details of how the MTA could share” the casino tax revenue.

In the end, the senator said the new casinos still will generate increased funding for education.

Addabbo also believes that the license fee revenue could exceed $500 million. If that’s the case, the state could raise $2 billion or more for the MTA from the selection process.

Where We Stand on Proposals

The state began the selection process earlier this year for the new casino licenses. Having the chance to operate a full-fledged casino in the nation’s largest metropolitan area has generated substantial interest from many of the biggest players in the gaming industry.

Announced proposals include:

  • Caesars casino NY headlines a team proposing a casino in Times Square
  • Las Vegas Sands eyes redeveloping the Nassau Coliseum on Long Island
  • Wynn Resorts partnering in an effort that would build one in Manhattan’s Far West Side
  • Saratoga Casino Holdings and the Chickasaw Nation are part of a consortium seeking to put a casino in Brooklyn’s Coney Island.

In addition, both MGM Resorts International and Resorts World have said they would bid to turn their VGT racinos in Yonkers and Queens, respectively, into full-fledged casinos. Many in the industry expect those two to be favorites to secure licenses.

But we’re still a while from the sites being selected. Before the proposals go through a state casino selection board, they must be endorsed locally.

NYSGC officials have said they do not expect licenses to be awarded until late this year at the earliest.

Addabbo is hopeful the state will expedite the process to award licenses, especially since he believes only about 12 applicants will be “credible” proposals. To do that, the local approval process needs to be expedited.

“Because the longer we wait, the longer we don't recognize the jobs, the educational funding, in this case the MTA funding, and all the benefits,” he said. “So, what’s the sense of the delay?”

Online Casino Legalization Would Increase Available Tax Revenues

Gov. Hochul may be enthusiastic about the retail casino revenue plan but she is decidedly lukewarm on the prospect of NY online casinos. In February, Joe Addabbo filed bill another bill to legalize online casinos. Bill S4856 failed to make the 2023 budget but he will try again for 2024.

As the fiscal situation in NY worsens over the year. Hochul may well warm towards legislation to permit online casino games.

Seneca Nation Calls to Finish Talks

Now that the budget is finalized, a Western New York-based tribal nation is calling on state leaders to wrap up negotiations on a gaming compact extension.

The 21-year agreement between the Seneca Nation of Indians and the state is set to end this year, and the relationship between the two sides has not been the best. They were locked in a bitter court dispute over annual payments that eventually led to the tribal nation paying more than $560 million to the state last year to resolve the matter.

“Now that the budget has been passed, it is our hope that the Executive Chamber will commit itself to finishing honest negotiations with the Seneca Nation on a fair and equitable gaming Compact before the close of the Legislative session in June,” Seneca Nation President Rickey Armstrong, Sr. said in a statement. 

“The livelihoods of tens of thousands of individuals and families in Western New York and across the state – Native and non-Native alike – are dependent on the Seneca Nation’s gaming enterprise. The time to act and move forward to protect them is now.”

The tribal nation operates Class III casinos in Buffalo, Niagara Falls and Salamanca.



Steve is an accomplished, award-winning reporter with more than 20 years of experience covering gaming, sports, politics and business. He has written for the Associated Press, Reuters, The Louisville Courier Journal, The Center Square and numerous other publications. Based in Louisville, Ky., Steve has covered the expansion of sports betting in the U.S. and other gaming matters.