Betting On The Big Apple
Gambling opportunities in New York City have never been sparse. In 1928, mega-player Arnold Rothstein found a three-day poker game that put him $325,000 in debt and got him shot for his troubles. In the 1930s, Damon Runyon, the scribe of the city’s seamy side, glorified a fixture called the floating crap game. It would inspire the musical Guys and Dolls. During the ’60s, you’d have been hard pressed to find a Bronx candy store that didn’t take sports action between peddling candy cigarettes and Topps baseball cards. A decade later, Stu Ungar roared through what he described as New York’s “goulash ts” and cleaned up at gin and poker before blowing it all with the bookies who forever loomed within easy reach. At the turn of the 21st century, underground poker clubs sprung up with evocative names like the posh-sounding Mayfair Club and the Aquarium, a pun that alluded to being loaded with fish (gamblers’ parlance for weak players). ts of this ilk were thought to be models for the Chesterfield Club in the movie Rounders.
Of course, those spots were all illegal. But in the near (or less near, depending on whom you ask) future, the Big Apple is expected to explode with legal—and elegant—gaming options. The city is about to issue three casino licenses.
And they promise to be the greatest casinos on Earth, out-Vegasing Vegas and out-muscling Macau. After all, with the entry price for a New York license tipping $500 million and close proximity to the world’s greatest actors, nightclub runners, chefs and architects, pride of place alone promises to make Big Apple casinos high stakes and sophisticated. The details are scant. Will Daniel Boulud do a restaurant? Is Lin-Manuel Miranda putting on a show? Might Jay-Z curate musical acts? But odds are the end products will be as high caliber as the locale.
“New York is New York,” says Ed Domingo of Empire City, the all-machines racino at Yonkers Raceway, and the former chief financial officer of Bellagio in Las Vegas. “Casino gambling will be one more alluring amenity that you can get in the city. I attended law school in New York and we used to take the bus to Atlantic City or Connecticut. Now, you won’t have to leave New York. It will be one more thing added to what makes New York great.”
Three casino licenses are up for grabs in downstate New York, including the five boroughs and Long Island. Vying for opportunities to participate in what will likely be the world’s biggest, highest-profile market are major Vegas players including Wynn, MGM Resorts and Caesars Entertainment and several high-profile New York City bigshots, including Mets owner Steve Cohen, real estate magnate Stephen Ross and even the cigar-loving music star Jay-Z.
The problem—demand exceeds availability—becomes particularly acute in light of the fact that two of the licenses are predicted to fall into the hands of MGM and Genting Group, which are already running Empire City at Yonkers and Resorts World at Aqueduct Race Track. Until now, they’ve been racinos: racetracks that can legally include gaming machines like slots among their gambling options, but not cards, dice or wheels. In other words, the games that bring in high rollers—blackjack, craps and roulette—are sorely missing.
But if things go as expected, gambling tables at the tracks may soon be packed with players. Insiders view the tracks as front-runners to get licensed. “There are issues [such as timelines and community concerns] everywhere except at the tracks; they should have been awarded table-game licenses in 2001 [when the state voted to permit machine games],” says Alan Woinski, founder of Gaming Industry Daily Report. “Empire City and Resorts World are the two most successful racinos in the world. You have to be crazy to not award them [full gaming licenses]. They are all set up in both places and they both have local .”
One wrinkle emerged in September when Scott Sibella, who headed up MGM Grand in Vegas until 2019, left his most recent job as president of Resorts World. This stemmed from an investigation into whether employees at MGM had been using company assets to pay off gambling debts during Sibella’s tenure.
That could reflect badly on MGM in New York, even though the allegedly underhanded dealings took place in Vegas. Such a situation might help Bally’s, which is controlled by Soo Kim and could be an outer-borough option for licensing. Kim recently purchased control of Trump Links in the Bronx and there has been talk of him wanting to put his casino next to the golf course (now renamed Bally’s).
Woinski doesn’t buy it. “If MGM is not allowed to get a [full] gambling license, why would they be allowed to operate Empire City?” he asks. Woinski points out that the incident under Sibella’s watch “happened years ago, with different management at MGM. And nothing has been proven.”
He adds a practical component: “If New York does not license Resorts World and MGM, it is three or four years before the state starts making money as opposed to months. You can’t pick and choose when you enforce these things. I don’t think it should have an impact, but that doesn’t mean it won’t.”
Assuming Woinski’s instincts are right, you can expect an impending dogfight between ambitious, egotistical people for the one remaining license. While proposals are not yet public, all interested parties are already doing the necessary legwork. And the grandstanding has also begun as lobbyists in the state capital are working it and earning millions of dollars for their efforts. Power Point demonstrations put on for influential politicians suggest some of what we might expect.
There is talk of opening a casino in Saks Fifth Avenue, which, according to Politico, will be a “James Bond-type of Casino Royale.” A Times Square Caesars outpost, in partnership with Jay-Z and real estate powerhouse SL Green, would have giant sculptures of Julius Caesar. A senator who saw the plan has described the figures as “ridiculous.” A bar, complete with a terrace overlooking Times Square, is said to be included. The agribusiness magnate and real estate developer Stefan Soloviev talked about putting up a deluxe Ferris wheel similar to the London Eye near the United Nations on the East Side. That’s been scrapped, but his plan for a hotel/apartment/casino/resort complex includes a freedom-themed museum with pieces of the Berlin Wall on display. Soloviev is also talking about having some kind of a cigar program. “I love cigars,” he says. Asked for his favorites, he replies, “I don’t have a favorite. People keep giving them to me and I keep smoking them.”
Whatever the theme, the pot is rich. A study from state gaming officials estimates profits in excess of $5 billion annually—and Phil Boyle is not surprised. He is the chief executive officer of Suffolk OTB, which owns Jake’s 58, named for its exit on the Long Island Expressway. It is an anomaly that includes no horse racing, while offering only machine gambling at games like slots, video poker and electronic blackjack. He could have sought licensing, but Boyle is happy with what he has.
“Just getting the license would cost half-a-billion dollars and we are doing very well as is,” he says. He hints at the casino’s profitability by explaining that percentages of his profits go to education and Suffolk County. Without any card games “we earned enough last year that we gave $110 million to the New York State Department of Education and the host county got $35 million.”
Boyle is not worried about a casino opening in New York City. “That takes a little chunk away from us,” he says. “Our customer base is Long Islanders.” But a proposed casino operation run by Las Vegas Sands at the Nassau Coliseum, in the county between Suffolk and New York City, would hit closer to home. That, Boyle acknowledges, is something that he “will live with.”
It is proposed to be a $4 billion casino resort, complete with entertainment, hotel rooms and a state-of-the-art spa. Plus, paying tribute to the Coliseum, where bands like Led Zeppelin and Queen have played, Sands promises serious entertainment venues. And if they don’t get a casino license? Sands representatives say they will build the resort anyway, and, presumably, bide their time until another license comes into play.
Boyle seems to be girding himself for either outcome. “We’re doing a $200 million or so expansion, going from 1,000 machines to 2,000,” he says. “We’re tripling our parking—right now you can drive around for 20 minutes and not find a space—[Jake’s is] adding a food hall and I’m trying to put in sports betting.”
Per Boyle, this is a bigger deal than it sounds. “Right now, sports books are not legal in New York State because of the exchange of cash. We want to build a large area for viewing sports and partner with a mobile sports betting company.” The idea would be that customers can hang out in the sports-viewing area and use their mobile phones or the casino’s kiosks to bet, with the action going through an existing mobile sports betting company. “I won’t say which company, but it will be great.”
In of optimism, he has plenty in common with entities angling for New York licenses. Consider the operation proposed by Wynn Resorts and Stephen M. Ross’ Related Companies. The latter owns property in Hudson Yards—a formerly desolate stretch of land on the far west side of midtown Manhattan, which is now flush with great restaurants, luxury residential buildings, high-end shopping and state-of-the-art screening rooms. It’s where the New York iteration of Wynn would potentially land. But a source who is involved with the project makes it sound like a shoo-in. “I’m not focused on our competitors at all,” he says. “Related is the best real estate company and Wynn is the preeminent casino company. We’re contemplating a resort consistent with what Wynn has elsewhere in the world”—meaning, top notch throughout. “It will be a full-fledged Wynn casino.”
Steve Cohen, the owner of the New York Mets and a hedge-fund billionaire, will pretty much dominate Flushing, Queens, if he gets to build his collaboration with the Hard Rock people there. His team plays at Citi Field in the New York City neighborhood and his strategy, about which he is tightlipped, involves a massive parking lot adjacent to it.
Jeffrion Aubry, a New York State Assembly member in Queens, seems to be banking on Cohen.
“As far as I can see, he goes after it the same way he goes after trying to make the Mets a winner—full force,” Aubry told Bloomberg BusinessWeek. (That statement was made before the Mets finished close to the cellar this season.) “He’s obviously in a place financially where he can do that.”
The usually press-resistant Jay-Z has not done interviews about the project he is involved with—the Times Square Caesars—but he has touted it on social media as the only possible option. He insists that there is “no better location for a Caesars Palace destination than the Crossroads of the World” and goes so far as to promise “daycare for Broadway workers and their families.”
Perhaps more to the point, the people behind the project address the criticisms of the Broadway League (a theater trade association opposed to competition at their doorstep) by maintaining that visitors to their gambling den will purchase some 400,000 Broadway show tickets annually. On top of that, the three partners promise to buy thousands of more show tickets.
The ever-confident Stefan Soloviev touts himself as a lock for the license: “The best thing for me is to get this license and put together something beautiful,” he says. He outlines a rooftop infinity pool and a four-acre park, among planned amenities. “You won’t need to gamble to enjoy what we are planning to do.”
Soloviev’s camp does not concur with Woinski’s prognostication that Yonkers and Aqueduct are all but winners. “I’m not sure that licenses will go to the racinos. This is about generating tax revenue and employment. The racinos are already doing well, but they can’t bring more value-added,” says the chief executive officer Michael Hershman, adding that a casino in Manhattan is almost baked in. “It would be crazy to not give a license in Manhattan. Will people from outside of the United States fly to New York to do business and then go to Citi Field or Nassau County to gamble? They will want to stay in Manhattan. This will bring fresh life back to the city.”
Domingo of Empire City figures that the MGM property situated on a Yonkers racetrack that already has gambling infrastructure in place (“We can have cards in the air in six to eight months,” he says), is a frontrunner. “There will be a gaming footprint north of 100 to 200 table games while still maintaining slot machines in the multiple thousands and the substantial sports book you would expect,” he says, pointing out that live racing would also be available for anyone who wants to gamble in a different environment. “Plus, MGM operates a few hundred restaurants. So, we have a nice menu to choose from.”
Asked to paint a picture of what it might look like, he considers the DNA of MGM and says, “Eating at a world-class steakhouse before seeing Lady Gaga and then going to a gorgeous casino for gambling is more compelling than what others can put in their space.”
Casino operators wouldn’t be the only beneficiaries. “It’s going to be a gold rush for skilled players,” predicts Peter Alson, the author of the poker novel The Only Way To Play It. “There will be a lot of bad players gambling in the casino who will want to try their luck at poker. It will be great for one year. That is the lifespan for sweet pickings. After a year, people get sick of losing money. They either go broke or get better. Plus, think about the underground clubs, which charge outrageous rakes because they can. They’ll have to charge less than the casinos. Most people would rather play in a casino than in an underground club. Overall, life will be good for skilled poker players.”
Whatever the outcome of the impending casino-licensing showdown, if the whole shebang was a giant craps game, Domingo would not shoot his dice and bet the “don’t” on New York. “I believe that gambling has a huge future here,” he says, thinking beyond Yonkers Raceway. “This market has been awaiting licensed gambling for a long time. Licenses here are going to be the most sought after in the country. Casinos in New York will be the largest and most popular in the world.”
