Wynn is latest bidder to bow out of NY casino licence race

New York: The Gambling Capital Facing Challenges

In the competitive landscape of casino operations, New York has long been considered a pinnacle for success. However, the reality is shifting, as evidenced by Wynn Resorts’ recent decision to withdraw from the race for one of the three sought-after downstate New York casino licenses.

With this announcement, Wynn Resorts joins a dwindling pool of contenders, becoming the third candidate to retract its bid before the June 27 application deadline. Previously, both Las Vegas Sands and Hudson’s Bay Company also opted out, raising questions about the viability of new casino projects in the region.

“After careful consideration, we have decided not to lodge an application for a gaming license in New York City,” Wynn stated. The rationale behind this decision revolves around the realization that more profitable avenues exist for capital investment, such as enhancing current developments and executing stock buybacks rather than entering a fraught environment that could face persistent local opposition despite a commitment to create 5,000 jobs for New Yorkers.

Wynn, in collaboration with Related Companies and Oxford Properties, had proposed a monumental $12 billion mixed-use development in Manhattan’s Hudson Yards. This ambitious project aimed to integrate multiple amenities, including a casino, hotel, school, and residential units. However, the venture faced backlash, particularly concerning housing commitments, which had to be doubled in April to combat opposition.

Economic Climate Influencing Decisions

This withdrawal underscores broader financial unease within the gaming industry. Wynn reported a 9% year-over-year revenue decline in the first quarter, with similar downward trends across its global properties. Compounding these fiscal challenges, Wynn is heavily invested in a resort project in the United Arab Emirates, slated to open in 2027, diverting resources and focus away from New York.

The landscape is complicated further by the rise of online gambling. While New York failed to legalize iGaming this year, the state boasts the largest online sports betting market in the United States. Nearby states with legalized online gaming, such as Pennsylvania and New Jersey, are experiencing record revenues, leading to concerns that any potential expansion of online casinos could detrimentally affect land-based operations. Wynn’s and LVS’s exits may serve as a warning to remaining bidders, particularly those with less financial power.

“We will not overextend ourselves to secure a license in New York,” asserted Wynn CEO Craig Billings earlier this month, reflecting a cautious approach to this increasingly complex environment.

Wavering Interest in New York’s Casino Licensing

Even with a month remaining before the application deadline, enthusiasm for casino development in New York appears to be waning. The withdrawal of prominent bids has left several remaining proposals facing logistical challenges and persistent local opposition.

Among the active contenders, Caesars’ Times Square proposal and Silverstein Properties’ Avenir project are under scrutiny, with environmental review hearings scheduled for this week. However, public awareness of these hearings is notably low, raising concerns about transparency and engagement from local communities.

Reports indicate that public notices of these meetings have been inadequately disseminated, leading to criticism regarding the state’s handling of the bidding process.

Evaluating the Remaining Prospects

Despite concerns surrounding bid feasibility, Bally’s Ferry Point project in the Bronx remains in the running, though its financial viability is uncertain. The Bronx Times recently noted the absence of solid support from local political figures, raising questions about the project’s future. Additionally, less prominent bids like Thor Equities’ Coney Island venture and Soloviev Group’s Freedom Plaza continue to gather interest, although challenges such as debt recovery persist for key players like the Mohegan tribe.

Conversely, Steve Cohen’s $8 billion Metropolitan Park appears to be gaining momentum, managing to resolve some opposition from local officials and advancing through necessary rezoning processes.

Concerns Over Industry Integrity

Interestingly, throughout this succession of challenges, speculation lingers that two licenses may already be earmarked for MGM Resorts and Genting Berhad, who are anticipated to expand their existing operations in Yonkers and Queens, respectively. Both companies, however, are embroiled in scrutiny due to multimillion-dollar fines related to anti-money laundering violations, which may affect their credibility during the application review process.

As the New York State Gaming Commission evaluates potential licensees, the prior actions of industry giants like Wynn and Resorts World will undoubtedly influence their assessments, adding another layer of complexity to the proposal review.

A Comparison to Japan’s Casino Bidding Process

The New York casino licensing experience has drawn comparisons to Japan’s drawn-out casino bidding saga, where initial enthusiasm diminished amid complications and delays. Japan, first opening bids in 2018, ultimately scuttled its competitive landscape down to a single project, MGM Osaka, now set to open in 2030. Similar apprehension about New York’s licensing process is mounting, raising fears of lost opportunities.

As noted by Las Vegas-based consultant Brendan Bussmann, “New York’s bidding process mirrors Japan’s uncertainties. If current trends continue, we could witness a significant reduction in proposals as the deadline approaches.”

In summary, as New York navigates this turbulent landscape, the forthcoming months will be crucial in determining the future of casino operations in the Empire State. Stakeholders must assess their strategies carefully amid evolving market dynamics and regulatory challenges.