The company partnered with Related Companies and Oxford Properties to build a casino resort in the Hudson Yards neighborhood. Wynn cited local opposition and the rezoning process as reasons for the exit.

In 2022, the New York legislature authorized the start of the process to award three downstate casino licenses. The prospect of a New York City casino has gained a lot of interest, even with a much-delayed licensing process and staggering minimum bidding of $1 billion: $500 million for the license and a minimum $500 million capital investment.

The Wynn project was among almost a dozen license hopefuls and among the highest-valued, with a touted $12 billion investment.

License applications are due June 27; the final decision is set for December 1. The licensing process should conclude by the end of the year.

Zoning and Local New York Resistance Cause Wynn to Exit

The Wynn Resorts-Related Companies partnership announced its plans to drop out of the race through a statement on Monday:

“After careful consideration, we have decided not to lodge an application for a gaming license in New York City,” the statement said.

It continued: “The recent rezoning process has made it clear to us that there are uses for our capital more accretive to our shareholders, such as investment in our existing and upcoming developments and stock buybacks, than investing in an area in which we, or any casino operator, will face years of persistent opposition despite our willingness to employ 5,000 New Yorkers.”

When it unveiled its plan, the partnership announced that the project would create 5,000 permanent and 35,000 union construction jobs. 

Wynn’s plans included an 80-story, 1,700-room hotel tower, a casino, 1,500 apartments (including affordable units), a K-8 school, and various other spaces. It also included a 5.6-acre public green space.

However, the Hudson Yard casino resort faced opposition from local organizations, such as Friends of the High Line and Community Board 4. Some lawmakers also opposed the project. New York City Council Member Erik Bottcher publicly said he wouldn’t support it.

After the Wynn withdrawal, Related Companies and Oxford Properties plan to build 4,000 housing units on the site and expand the green space.

Wynn is The Fourth Casino Hopeful to Drop Out

Wynn Resorts is not the first potential applicant to withdraw its bid. Last month, Sands Las Vegas (SLV) gave up on its bid to build a $4 billion casino project at the Nassau Veterans Memorial Coliseum site in Long Island.

Some experts were surprised by the SLV’s move, given that the project had strong political support. However, it faced opposition and legal challenges from community organizations and Hofstra University, which sits next to the site.

SLV’s withdrawal was based on its desire to focus elsewhere and broader concerns about the potential legalization of online casinos in New York. Some experts point out the US-China trade war as another factor, as most of SLV’s business is in China.

In April, Retailer Saks Fifth Avenue announced that it would no longer pursue opening a casino above its flagship store.

Meanwhile, developer Vornado Realty Trust abandoned its casino idea near Madison Square Garden and Penn Station last fall.

Who’s Left?

While the list of hopeful applicants has shrunk, there’s still plenty of interest. Several prominent casino operators, such as Caesars Entertainment, MGM Resorts International, Bally’s Corp., and Hard Rock International, are still fully committed to opening a casino in New York City.

There is a broad consensus that two projects are ahead of the rest: MGM Resorts International’s Empire City Casino in Yonkers and Genting’s Resorts World New York in Queens. Both locations are existing racinos contributing to the local economy and would require fewer resources to convert to full-scale casino operations.

That means several applicants will likely compete for the remaining license:

• Caesars Entertainment and SL Green Realty plan for a Times Square casino, a project backed by rapper Jay-Z.
• Bally’s Corp. casino in Bronx, next to the golf course at Ferry Point, formerly Trump Golf Links.
• A $8 billion casino project near Citi Field in Queens, backed by Mets owner Steve Cohen and Hard Rock International.
• A Coney Island casino by developer Thor Equities and many partners.
• Soloviev Group and Mohegan Gaming and Entertainment’s Freedom Plaza project, located next to the United Nations headquarters.

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To be developed on a platform built above the railyard between West 30th and West 33rd Streets and 11th and 12th Avenues, the two parties stated that the Wynn New York City resort will create 5,000 permanent jobs in the area and feature hotel rooms and suites, restaurants, bars and lounges, a spa and a concierge team.

Wynn and Related added that the Hudson Yards West project will create 35,000 union construction jobs, 5.6 acres of publicly accessible open space, a residential building with affordable housing, commercial office space, a school, a community facility and a daycare centre to help “enhance the neighbourhood and maximise benefits” for the community.

As Wynn and Related submit their full application to the New York State Gaming Facility Location Board and continue the environmental review process, other features to be announced include a substantial community benefits programme, security programme and traffic mitigation plan.

“As the leading designer, developer, and operator of premium gaming resorts in the world, Wynn New York City will attract luxury and aspirational travellers to our destination resort in Hudson Yards,” commented Craig Billings, CEO of Wynn Resorts.

“Wynn guests consistently spend more when they travel. That results in greater tax revenues for the City and State and more spend in the local community, all with less foot traffic than might be required at other resorts.”

Notably, Wynn and Related noted that the 5.6-acre park will create a “seamless recreational space along the entire West Side that is integrated with the surrounding neighbourhood” that is “designed with the specific needs and input of community stakeholders with programming and areas for residents and their pets to embrace”.

Jeff T Blau, CEO of Related Companies, added: “Hudson Yards has already proven to be an unparalleled catalyst for the New York economy, first through tens of thousands of construction jobs and now as home to the world’s leading companies, retail and housing.  

“Moving forward with the second phase of development presents an incredible opportunity to double the impact and provide generational benefits to the state, city, and especially our west side neighbours. 

“We look forward to completing our vision for Hudson Yards in partnership with Wynn Resorts and revealing full project plans as part of our application to New York State.”

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According to Bet on NY, which is a group backed by Sports Betting Alliance, the formalisation of a regulatory framework supporting igaming in the Big Apple could bring up to $1bn in additional tax revenue annually. 

Any potential decision, which would be subject to a rigorous regulatory journey, would build on the success of sports betting engagement in the region. 

Earlier this month, the New York State Gaming Commission revealed that sports betting operators in the Empire State had a total handle of $2.04bn for December 2023 — the second-highest handle in state history. 

Furthermore, the bill would also lead to new employment opportunities and ensure consumer protections while also driving revenue.

Progress for the state hinges upon Senate Bill 8412 (SB 8412), brought forward by Democrat Senator Joseph Addabbo will continue to be discussed this year and is likely to conclude in June. 

New York regulators will likely be eyeing the progress and growth of the sector in nearby states such as Connecticut, Pennsylvania, and New Jersey, as examples of successful efforts it can mirror in order to grow its economic output through a thriving igaming framework. 

The state is well-positioned for the establishment of a regulated online casino sector – with a myriad of sportsbooks already pitched up in the area, including FanDuel and DraftKings — which both hold online casino offerings. 

FanDuel posted a $834.5m handle in December, while DraftKings took $773.4m in bets. Caesars, which also offers igaming, rounded out the top three at $201.9m.

A further driver to the legislation of the online gaming market is halting any potential black market that derives from the absence of regulatory framework. Eradicating an unregulated market has been touted as being potentially key in uniting both parties and garnering votes for the opening of the sector.

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Whilst conducting the process, the notion for the introduction of mobile sports betting in the states was proposed, with the potential of two sports wagering brands permitted per casino. 

If followed through, 20 licenses will be granted across seven established casinos – four commercial and three tribal – in addition to three new venues.

Senate budget proposal S 2509B allows for multiple operators in a bid to encourage increased competition and choice throughout the state, in stark contrast to Governor Andrew Cuomo’s lottery-driven regulatory model. 

The New York State House Assembly’s sports-betting bill — Bill A 3009 – is closer in content to Assemblyman Gary Pretlow’s bill.

A notable proposal in the Assembly bill sets out to include two mobile skins for each of the state’s four commercial casinos and three tribal gaming operators, at a cost of $12m per license for each operator. 

Moreover, a 12 per cent tax has been set for mobile and 8.5 per cent for terrestrial wagers, while off-track betting facilities will be allowed to partner with a casino to host on-site  self-service kiosks.

The date set for the proposed three downstate casino applications is July 1, and applicants will each be required to pay $500m in licensing fees.

While this week’s moves will be welcomed by an expectant sports betting industry, barriers still remain before New York can get down to business. The Senate and  Assembly will have to reconcile the differences in the two budget proposals and Cuomo still has to be dissuaded from pursuing his single-operator vision.

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Having collected almost $200m in revenue and generated close to $3bn in bets during its 12 months of operation, PlayNJ.com states that it could be poised to surpass Nevada in monthly handle for the first time.

According to figures released by the New Jersey Division of Gaming Enforcement, online and retail sportsbooks have now accepted $2.9bn in bets in the time since launch.

Recording a 1.7 per cent rise in handle for May to $313.7m in April, it is believed it could topple Nevada, who will release its own data later this month.

Dustin Gouker, lead sports betting analyst for PlayNJ.com, explained: “We knew that sports betting in New Jersey would be successful, but it is fair to say that so far it has exceeded our expectations,” he says.

“$3bn in bets in 12 months is an impressive milestone by any measure, and in just a year, New Jersey is set up to become the nation’s largest legal sports betting market.

“If this is indeed the month that New Jersey overtakes Nevada for the first time, it will be a momentous occasion for the Garden State.

“New Jersey sports bettors appear to have a stronger preference for basketball and baseball than Nevada, so it makes sense that May would be a likely month for it to happen. But clearly the state is on its way to becoming the largest legal sports jurisdiction in the country.”

The FanDuel Sportsbook/PointsBet generated $7.9m in online gross revenue, down from $8.8m in May, to lead the online market, with the FanDuel Sportsbook at The Meadowlands continuing to lead the retail market.

Gouker added: “The sportsbooks branded by the daily fantasy sports giants continue to dominate the sportsbooks tied to Atlantic City-based casinos.

“Part of that is the brand recognition of FanDuel and DraftKings. But the proximity of FanDuel Sportsbook to New York City is also a significant factor to its dominance, particularly on the retail side.”

Total gaming revenue for the month in New Jersey recorded a 27.1 per cent increase to £276.7m (2018: $217.6m), helped along with land-based revenue of $222.8m, a 15.3 per cent boost on $193.3m and igaming win that rose 57.8 per cent from $24.3m to $38.3m.

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Securing the sale from Las Vegas Sands, the closing of the transaction follows approximately 14 months of regulatory review and other customary closing conditions.

Lauded as a “landmark transaction” for the tribe, Jay Dorris, Wind Creek’s president and CEO, commented: “We are pleased with the decision of PGCB and anticipate moving quickly to close the transaction. I look forward to welcoming all the Sands Bethlehem employees to the Wind Creek family.”

The Sands Casino Resort Bethlehem, located in the Lehigh Valley of Pennsylvania, which sits roughly 80 miles from New York City, is to be renamed Wind Creek Bethlehem upon integration into the WCH portfolio.

Amenities encapsulated within the property include a 183,000 square foot casino floor featuring 3,000 slots and electronic table games, 200 table games, 282-room AAA Four Diamond hotel, numerous food and beverage outlets, a 150,000 square foot retail mall and a multi-purpose event centre.  

Brian Carr, Sands president and COO, said of the transaction: “We are thankful for the strong foundation that Las Vegas Sands provided for us over the past decade. It is exciting to now shift our focus to the future as we begin the process to re-brand the property to Wind Creek Bethlehem.”

WCH anticipates to conduct an immediate effort to expand the property to include construction of a 300-room hotel adjacent to the casino, as well as moving forward with a renovation of the existing machine shop Bethlehem steel site, with ideas such as an adventure and water park that will include a 400 room hotel mooted.

Stephanie Bryan, Poarch Band of Creek Indians tribal chair and CEO, added: “The purchase of the Sands Casino Resort Bethlehem is a valuable addition to the tribe’s existing gaming portfolio.  This investment will expand and complement our already extensive Wind Creek Hospitality brand’s offerings and bring added economic growth to the Lehigh Valley.”

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MGM Resorts acquired the property for approximately $850m, with the company agreeing to pay an additional $50m if Empire City is awarded a license for live table games on or prior to December 31, 2022.

Following the purchase MGP secured the developed real property from MGM for in the region of $625m, and leased it back to an MGM subsidiary that is to undertake daily operations.

Furthermore, MGM has also agreed to give MGP a right of first offer with respect to certain undeveloped land adjacent to the property.

Jim Murren, chairman and CEO of MGM Resorts, said of the deal: “We are pleased to welcome the 1,200 employees at Empire City Casino to the MGM Resorts family.

“Over the past three years, we have established a meaningful presence in the northeast with Borgata in Atlantic City, MGM National Harbor in Maryland, and MGM Springfield in Western Massachusetts.

“With this new addition to the MGM Resorts portfolio, we have now gained a foothold in the high-density New York City region, and we look forward to leveraging the MGM platform to maximise value in this evolving marketplace.”

The 97-acre Empire City, located 15 miles from Manhattan’s Times Square serves around 16 million eligible gaming customers in southern New York, and features over 5,200 slots and electronic table games, multiple dining outlets, and both live and simulcast horse racing.

Timothy Rooney, president and CEO of Empire City Casino, explained: “What’s incredibly exciting is the amount of opportunity MGM Resorts will bring to the employees at Empire City, as well as Westchester County, the city of Yonkers, and the State of New York.

“With destinations throughout the world, from resorts to casinos to entertainment, MGM has a tried-and-true formula for success. They know how to build and grow properties that continually raise the bar in entertainment, travel, and leisure, and we are so thrilled to leave Empire City in MGM’s capable hands.

“What’s more, the potential for growth at Empire City has absolutely no boundaries. MGM will truly provide Empire City employees and the property’s guests with the resources and opportunities to make the casino and track into something we haven’t even yet realised. I cannot wait to see what’s to come!”

“Today, we continue to expand MGP’s best-in-class portfolio with the acquisition of the real estate assets of Empire City, expanding our geographic footprint to the New York City metropolitan area,” added James Stewart, CEO of MGM Growth Properties.

“This financially accretive transaction further diversifies our existing market-leading regional portfolio, and provides us with additional growth opportunities with a right of first offer on any potential capital improvements in the future. This is another excellent example of the power of our partnership with MGM Resorts.”

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