In New York, Resorts World Proposes $100 Million Above Baseline License Fee And More Than Double Minimum Tax Rates

If this were poker, Resorts World just did the equivalent of pushing all its chips into the center of the table.

Sensing an opportune time to strike following Tuesday’s shocking withdrawal of MGM Empire City from the New York downstate casino licensing process, Resorts World substantially upped its ante for one of the three potential licenses available. The $8 billion Metropolitan Park proposal next to Citi Field, backed by New York Mets owner Steve Cohen and Hard Rock, and the $4 billion Bally’s proposal to build a casino on its golf property at Ferry Point in the Bronx are also still in the running.

Resorts World’s executive summary submitted to the New York State Gaming Commission’s Gaming Facility Location Board (GFLB) released by the state agency Wednesday included an offer of $600 million for a full 30-year casino license. That is 20% above the $500 million minimum originally approved by the GFLB.

But the real shocker came with Resorts World’s proposed tax rates — 56% for slots and 30% for table games. Those numbers are well above the 25% slot and 10% table game base tax rates put forward in the revenue matrix.

A gaming incumbent that currently offers video lottery terminals (VLTs) at Aqueduct Raceway, Resorts World submitted an application with a $5.5 billion expansion plan for its venue to the commission. Resorts World has been a frontrunner in this process since the get-go and reinforced that status during two public Community Advisory Committee (CAC) hearings with overwhelming support from the local Queens community.

The application was unanimously voted forward by its CAC, and Resorts World’s confidence was apparent in the executive summary. The gaming company said it took “great pride in not having to amend its community benefits package during the CAC process because that overwhelming consensus for a shared vision spoke volumes to RWNYC’s 15 years’ worth of commitments to workforce development, diversity, and community partnerships.”

Spelling out all the details

While all three remaining applicants submitted materials that were completely redacted from public viewing, Resorts World laid out a substantial portion of its financial projections compiled by Spectrum Gaming.

For Year 3 estimates, which would be 2031, the study projected Resorts World to outperform every other venue across the 14 scenarios the GFLB requested, with annual revenue ranging from $3 billion on the low end with three licensees to $4 billion as the lone licensee.

Resorts World’s trump card, however, remains its speed to market. It noted that while the other two “greenfield proposals” are being built, Resorts World projects to generate $11.5 billion in gross gaming revenue and $5 billion in tax revenue for the state from June 2026, when the first phase of its expanded gaming would open, through 2030.

Resorts World projects to have its full expanded gaming venue — consisting of 6,800 positions — up and running by 2029. The $4.2 billion in projected revenue from its two New York properties that year would put the Empire State second nationally, ahead of Pennsylvania and behind only Nevada. The $1.7 billion in projected tax receipts would be tops in the U.S.

The proposed 56% tax rate on slots is inclusive of horse racing support, and Resorts World noted it is the same rate it currently pays on VLT, minus the 10% Lottery Administration. It would match MGM National Harbor in Baltimore for the highest tax rate at a major U.S. commercial casino.

The proposed 30% tax rate on table games revenue would be the highest among major commercial casinos and well above rates found in neighboring Pennsylvania (16%) and Atlantic City (9.5%) in New Jersey.

Know your clientele

Resorts World is fully leaning in on marketing the Asian population of downstate New York, which it estimates to be 17%, as part of its robust revenue projections. Part of its then-high revenue projections in 2010 when submitting material for a VLT license was based on this demographic, and Resorts World noted it played out accurately over the next eight years.

This year, Resorts World estimates 25% of its $1 billion gross gaming revenue comes from the Asian market. Its 1,200 electronic table games (ETGs), which it equates to 200 table games, nearly equal the 300 found in neighboring states.

Most of those tables offer baccarat, and Resorts World noted that in the Nevada gaming abstract, the win per unit table per day (WPU) at the largest Las Vegas Strip properties comes out to $4,232 spanning 2,411 tables of all games, but $9,545 on 429 mini-baccarat and baccarat tables, which cater to a largely Asian demographic.

In looking at peer casinos, the Spectrum Gaming study put forth by Resorts World notes that table games gross gaming revenue (GGR) as a percentage of total revenue ranges from 39% at MGM National Harbor to 47% at Wind Creek Bethlehem to 58% at Wynn Las Vegas.

The study pointed out Wind Creek has the “most robust bus program for Asians in New York City,” which lends to the projection Resorts World can attain a 50/50 split in slot and table GGR by offering 800 table game positions. In the “high” case as the lone licensee, Spectrum projects Resorts World’s WPU to be comparable to Wynn Las Vegas since it would be “driven by high table limit minimums during peak periods, weekends, and holidays.”