No government has ever asked $1 billion just for the right to build a casino.
That still is true. But that’s how much New York Governor Kathy Hochul had originally wanted for casinos in New York City.
Casino executives and lobbyists were able to get the leaders of the State Legislature to put pressure on the Governor. Now the state’s $220 billion budget for 2023 includes only a $500 million fee for each of three downstate casinos; although, that might rise to as much as $750 million. This is in addition to minimum gross gaming revenue taxes of 25% on slots and 10% on table games.
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The question is whether any casino, even one in Times Square, is worth a license of half or three-quarters of a billion dollars. Although the answer to that might be, “Yes,” I would advise against writing that check unless it comes with legislation guaranteeing that the state and city won’t come back later asking for more later.
In 2009, I was hired by the State of Delaware to recommend the tax rate for its new sportsbooks. I looked at every jurisdiction I could find everywhere in the world. What I discovered was that every government had raised its tax rates or fees on casinos, once they were open and successful.
When I mentioned this during a speech before leaders of state legislatures, one of the Mississippi delegates challenged me. “We never raised our casino tax rates,” he said.