As the race for New York City casino permits intensifies, potential operators find themselves facing a high-stakes gamble not only for the coveted licenses but also in terms of financial risk. A recent report from financial analysts at S&P Global Ratings suggests that successful bidders may find themselves shouldering substantial debt burdens.
Major Players Vie for Lucrative Downstate Casino Licenses in the Battle for the Big Apple
The New York state government is set to award three jili777 downstate casino licenses, opening the doors to what is considered one of the last untapped gaming frontiers in the United States. The competition is fierce, with major players like MGM Resorts International, Las Vegas Sands, and Wynn Resorts vying for the lucrative opportunity.
S&P Global Ratings, in a comprehensive new report, outlined the potential financial implications for the winning operators. The proposed projects range from $2 billion for expansions or redevelopments of existing properties to over $5 billion for entirely new developments. The report indicates that the impact of the associated leverage could materialize within the next 12-18 months.
One of the key concerns raised by the analysts is the strain on corporate credit metrics as companies seek to secure a foothold in the highly competitive New York market. MGM Resorts International‘s Empire City Casino in Yonkers and Resorts World New York in Queens are rumored to be strong contenders, although nothing is confirmed at this stage.
Rumors Swirl, Anticipating Record-Breaking $1 Billion License Fees
New York is not holding back in capitalizing on its sought-after status, with recent rumors suggesting that winning bidders could be slapped with licensing fees as high as $1 billion each. This p far exceeds the initially anticipated cost of $500 million per permit. When factoring in construction costs, operators like Las Vegas Sands and Hard Rock International may be looking at a staggering total investment of up to $6 billion and $8 billion, respectively.
Despite the potential financial challenges, experts believe that New York could offer a short-term pain, long-term gain scenario for victorious operators. The prospect of dominating the New York market is seen as a strategic move that could pay off handsomely in the long run. However, the timeline for these developments is extended, with S&P suggesting that licenses may not be awarded before the second half of 2024. Significant capital spending is not expected until 2025, given the complexities of building in New York and the ambitious scale of the proposed projects.
