NYC: Everybody Wins?

All three New York City casino proposals were tapped in the penultimate round of selection for Empire State benediction. That means Genting Group, Bally’s Corp. and Hard Rock International each grasped the brass ring. Now comes the hard part: Finding financing. We’re talking about an aggregate $18 billion in casino capitalization—not money that’s going to be found under Steve Cohen‘s couch cushions. Oh, and there’s one major hiccup for Genting.

As exposed by Nevada‘s best reporter, Dana Gentry, the application by Resorts World New York City had a significant omission … the $10.5 million fine imposed on Resorts World Las Vegas for laundering money and associating with unsavory characters. Genting evidently remains unrepentant, viewing money laundering as part of ‘the cost of doing business’ in Las Vegas. However, it was sufficiently cognizant of its guilt to hide the regulatory finding from the New York State Gaming Facility Location Board. The latter “views this lack of transparency as concerning and recommends that the Commission weigh this in its licensing evaluation.” Oops.

Some of us had been wondering how AML laxity would fly in New York State, if at all. MGM Resorts International ducked the issue by bowing out of contention for a Class III casino. Genting decided that discretion was the better part of valor … and could still miss out on a license when the state gaming commission sits in judgment. Perhaps Genting is hoping to dazzle regulators with its usurious tax commitment: The state asked no more than 25% of slot revenue and 10% of table game lucre. Genting rashly pledged a 56%/30% rate instead. Now, according to Bloomberg, it is having cold feet. (Cohen took the state at its word on tax rates, to no ill effect, and Bally’s upped the slot impost to 30%.)

Speaking of unsavory associations, Bally’s is one giant step closer to having to pay a $115 million kickback to the Trump Organization. Then again, Bally’s President George Papanier signed the sleazy commitment with an autopen (we have the receipts), so Bally’s could always try to hoist POTUS on his own daffy petard. No one yet has commented on the grim irony that the racist, xenophobic Donald Trump‘s palm is about to be greased by a company run largely by Black men (CEO Robeson Reeves, CFO Marcus Glover) and owned by a South Korean (Soo Kim). Then again, Trump is singularly shameless … but has managed to keep his foot out of his mouth while the oily arrangement was going through, which otherwise might have queered the whole shebang. A triumph of restraint, you might say. As for Bally’s, proving that it can be shaken down is not the best basis on which to be starting business in a new state.

Cohen, for his part, is hardly Mr. Clean, having had to settle an insider-trading case for $1.8 billion some years ago. He’s trying to spruce up his image by pledging improved mass-transit facilities and 25 acres of parkland. Like Genting, he’s also thrown in a commitment to affordable housing. (Bally’s already has “affordable housing”: It’s across the street from a ghetto.) Unlike ill-fated The Coney, Cohen is promising hiring preferences for area residents, too. $8 billion is a pretty heavy lift, making Metropolitan Park by far the most expensive casino project in United States history. It’s promising $33.5 billion in taxes across three decades, but something tells us Cohen and reality are set on a collision course.

Monday’s casino-selection announcement was met with what might be called eager skepticism by the New York press. We spoke with Vici Properties CEO Ed Pitoniak last week (for Casino Life Magazine) and he was far from sold on the idea that—absent a casino in Manhattan—the Big Apple could become a gambling destination, as opposed to another major city with casinos. After all, as Jeff Edelstein writes, “The Bronx and Queens are … the Bronx and Queens.” And for suburbanites, they’re as little as an hour’s drive from Wind Creek Bethlehem and Atlantic City. The casinos on the Boardwalk (to say nothing of those in Pennsylvania) are expected to pale next to the three finalists’. But some awfully roseate financial projections have gone into making this happen, so skepticism is warranted.

The hits just kept on coming today for Genting Group. Gentry’s revelation was bookended by an unflattering report from David Danzis, one of the last people practicing journalism at Miriam Adelson‘s captive Las Vegas Review-Journal. It seems that Resorts World Las Vegas has gone from barely generating any return on investment to being ROI negative. Third-quarter revenue was a measly $175 million and cash flow was $12 million in the red. The bow planes at Resorts World have been locked in ‘dive’ for the past year. As expected, Genting blamed the state of affairs on the Las Vegas Strip (bad) and the U.S. economy (worse). Hotel occupancy languished at 84% and ADRs were flat.

Like everyone else, Resorts World LV is pinning its hopes on the 2026 convention calendar, in addition to various rebootings of its marketing. Word of mouth is that it’s a very nice property ($4.3 billion will do that) but, fiscally, it’s a dog. Nothing short of a change of operator is likely to improve its fortunes more than incrementally. Genting is merely rearranging deck chairs on the Titanic.

One of our role models, former casino operator and regulator Richard Schuetz, has been on a roll lately. In addition to tackling the resurgence of officially condoned racism and sexism in the United States, he looked at its impact on Big Gaming. As Schuetz points out, “the general trend suggests that firms that have more diverse workforces tend to exhibit better operating results.” Even so, the American Gaming Association comes under his fire for “developed an effective display to depict industry misogyny in its list of Gaming Hall of Fame inductees.” Nevada also gets blasted for the lily white, overwhelmingly male composition of its corporate boards. Nor is it seen as coincidence that anti-DEI states and the former Confederacy intersect to form a perfect set.

As Schuetz concludes, “many casino companies are not performing to their potential due to their ingrained biases. As with the NFL, their teams would significantly improve if they dropped discrimination and got away from simply depositing old white men to lead the teams, and made an aggressive effort to embrace women and minorities.” Amen to that. Ditto what Schuetz wrote about the buying and selling of gaming regulation. With regard to the latter, he suggests there may be an unwelcome reckoning for bettors who dabble in the prediction market, once the IRS gets into the act.

Finally, your truly was the subject of a very nice shout-out from Schuetz. It also definitively establishes the look of our office (messy) and hair (likewise). Being too overwhelmed with gratitude to say anything more, we’ll just adjourn.