New York City is not the same town it was a year ago. The pandemic shuttered restaurants and bars, emptied out office buildings, and darkened the Broadway theater district, making the city that never sleeps a bit, well, sleepy.
But with residents fleeing to the 'burbs and retail owners struggling to pay the rent, the Big Apple is faced with a $15 billion-dollar deficit. To close the gap, New York City must look to new revenue streams, including one it has been averse to in the past: casinos.
A losing streak for casinos in 2020
Casinos are typically huge moneymakers, and 2020 had been off to a great start. According to the American Gaming Association (AGA), January and February of 2020 set a record for revenue, with a 10.6% increase from 2019.
But like so many commercial establishments, casinos didn't have it so easy during the pandemic, thanks to the lockdown during the early days of COVID. The AGA reports that while gross gaming revenue still totaled $2.3 billion for Q2, it was down 75.6% from an otherwise thriving Q1 and down 78.8% from the same quarter the previous year.
However, with a vaccine allowing for larger in-house capacities at casinos, those numbers could go back to where they were pre-pandemic. In fact, investors are banking on it -- and they want to bring a big win to Manhattan.
Betting on the Big Apple
Even with casino-studded Atlantic City to the south and Resorts World Casino close by in Queens, Manhattan is seen as an unsaturated market by casino developers. They're ready to ante up big time, believing machines and blackjack tables could be the way to pump money back in the coffers.
New York lawmakers, including Governor Andrew Cuomo, have previously been averse to introducing gambling to Manhattan. However, Cuomo does recognize the money-making power of casinos, having signed legislation back in 2013 to bring four new ones to upstate New York.
New York State currently has the go-ahead to issue three more casino licenses by 2023. Manhattan was suggested as a site even before the pandemic. But now with a $15 billion-dollar deficit on the books, Cuomo is motivated to entertain proposals by investors and casino developers, potentially pushing that timeframe up. The governor has even changed his tune on legal mobile sports betting -- no doubt because it has the potential to bring into the state half a billion dollars each year.
Still, Cuomo will be faced with opposition by lawmakers in the city. The New York Times reported that Liz Krueger and Brad Hoylman, two Manhattan state senators, have been vocal in their disapproval of building casinos in the city.
Midtown as the new Vegas Strip?
Midtown is where the casino discussion has been focused. Vornado Realty Trust has discussed building a casino at the site of the former McAlpin Hotel near Herald Square. And L&L Holding Company is proposing a casino at its 46-story, $2.5 billion tower at 47th and Broadway, which would also have a hotel and a theater.
Time Square's bold neon billboards and marquees could also be seen as a dress rehearsal for the flashing lights of casino slot machines, though the district has been a more family-friendly destination over the past decades. Still, it's hard to ignore the lure of casinos for both locals and tourists to a Midtown that has been devoid of both for the better part of a year.
Of course, casinos aren't like pop-up stores that can open up for business tomorrow. It will be some time before any revenue starts rolling in from slots and table games. However, casino licensing fees alone will provide a quick yet very substantial stream of income before the doors even open. Many jobs will be created for the new casinos, too, which is another reason casinos could become a part of the Manhattan skyline in the next few years.
The bottom line
While investors are more than game to get things rolling with casinos in New York, they might still get a cold reception from some lawmakers opposed to their development. However, with the city needing to find ways to make up for a very large deficit, Manhattan politicians could be convinced to go all in on the casino business.