In a few years, the unlimited soups, salads, and breadsticks at Olive Garden might not be the only jackpot awaiting tourists heading to Times Square in New York City.
Developers SL Green Corporation and Caesars Entertainment — owners of casino-resort brands like Caesars Palace and Harrah’s — plan to build a casino in a skyscraper at 1515 Broadway in Times Square near West 44th Street, the New York Times reported earlier this month.
SL Green already owns the building, and Caesars Palace Times Square’s proposal is to include the Broadway theater, which will host the musical The Lion King, in the development. A hotel, spa and restaurants are also expected to be part of the Manhattan casino resort if it receives one of three gaming licenses that will be awarded for the New York City area.
The proposal isn’t the only one trying to bring state-regulated slot machines and poker tables to Manhattan.
Wynn Resorts, in partnership with developer Related Cos. build a casino in Related’s Hudson Yards project on the western edge of Manhattan. A casino would theoretically breathe new life into what is believed to be the largest privately developed real estate project in US history.
Hudson Yards opened to great fanfare in 2019 but lost some of its luster with the arrival of the pandemic, when office demand eased and a much-hyped Neiman Marcus department store closed.
Bids are also in the works for Coney Island in Brooklyn, as well as Queens, where the New York Mets owner is in talks with Hard Rock about developing a casino resort next to Citi Field.
Existing upstate “racino” complexes — racetracks with video slots and gambling but no real dealers — are expected to be the frontrunners for two of the New York City area’s three casino licenses.
Those properties, MGM Resorts International’s Empire City Casino in Yonkers and Resorts World New York City in Queens, would be faster-to-open projects than Wynn’s or Caesars’ bids due to their existing gaming presence (although both Empire City and Resorts World are planned) . receive significant investment to improve gaming experience should they win).
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Nothing is easy
The deal with Wynn/Related is much more complex than Caesars’ proposal, which involves an existing skyscraper. The proposed Wynn Casino, which would be adjacent to the Javits Convention Center, would require the construction of a 10-acre terrace above active rail lines. In addition, there would be a lengthy planning and approval process.
Of course, Caesars doesn’t necessarily have it in their pockets either. Just because the proposal would include the home of the musical The Lion King doesn’t mean Broadway is laying down the welcome mat for a casino to be built near the Great White Way.
The Broadway League, which represents the community of theater owners and producers, told members it would not support the neighborhood casino proposal.
“The addition of a casino will overwhelm the already densely populated area and endanger the entire neighborhood whose existence depends on the success of Broadway,” the league said in a statement to the NYT. “Broadway is the key contributor to tourism and risking its stability would harm the city.”
On the other hand, the Actors’ Equity Association, a union that includes Broadway actors and stage managers, supports the bid, saying in its own statement, “A casino in Times Square would be a game changer, increasing the security of the Times Square neighborhood with.” increased security personnel, more sanitary facilities and new cameras.”
However, having Broadway theater on the doorstep of a casino might not be as great as it sounds from a financial standpoint.
Alan Woinski, CEO of Gaming USA Corporation — a casino consulting and publishing company — told TPG earlier this year that big-city casinos don’t typically do well. There’s just too much competition for entertainment spending.
Casinos in urban markets like Detroit and Cleveland have not met pre-opening financial expectations. In addition, gaming revenue at Horseshoe Casino in downtown Baltimore brings in less revenue than more suburban casinos in Maryland.
“You look at big city casinos and they all underperformed,” Woinski said. “I don’t know why these companies do this over and over again. Harrah’s New Orleans went bankrupt twice. They just don’t do well. #1, there’s too much competition for entertainment dollars. And #2, no player wants to have trouble getting to or from a casino.”
Enough space to walk around
It wasn’t long ago that analysts were concerned about a cannibalization effect taking place on the East Coast with gaming revenue as more states legalized gambling to discourage residents from crossing state lines to spend money at a casino.
But the pandemic prompted a surge in domestic holiday travel – a big win for casinos. According to the American Gaming Association, US gaming revenue of $14.31 billion reported for the first three months of this year marked the strongest start to a year on reporting history.
Financial fortunes can obviously change by the time one of these casino offerings gets the official go-ahead in New York State, but dates like this certainly increase the state’s motivation to get involved in the casino resort action.
A final decision on who will receive the coveted casino licenses is not expected until next year at the earliest.