Vornado Realty Trust is exploring the possibility of submitting a bid to build a casino in New York City.
Vornado is the city’s second-largest commercial landlord. The company is considering the site of the former Hotel Pennsylvania near Penn Station and Madison Square Garden for its proposed casino. The now-vacant hotel will be demolished by the end of the year as part of the state’s plan to re-develop the area.
Vornado has already won the bidding to develop five of eight new office buildings in the General Project Plan. The NY Post was able to confirm rumors of the company’s casino ambitions.
A company spokesperson told the Post that nothing is concrete but acknowledged that the company is studying the possibility. The spokesperson also added that the most important criterion for the project is “that it meets the economic development objectives and produces the transit and public improvements set forth in the state’s General Project Plan.”
While there is no deadline to submit a casino application, Vornado might need to hurry up. The casino licensing process will be starting soon. The New York Gaming Facility Board (NYGFB) expects potential bidders to submit their first round of questions by Feb 3.
Possible Partnership Between Vornado and Rush Street Gaming
Rumors are also circulating that the company is looking to team up with Neil Bluhm. Bluhm is the founder of Walton Street Capital and Rush Street Gaming.
Walton Street Capital is an investment firm with over $14 billion in equity, including real estate.
Rush Street Gaming owns several casinos across the midwest, many using the Rivers brand. Its spinoff, Rush Street Interactive, is the operator of the BetRivers online gambling brand, which ranks among the top NY online sportsbooks. That casino experience and mobile gaming presence could prove invaluable.
A Chicago native, Bluhm also holds minority ownership in the Chicago Bulls and White Sox.
Hopefuls Line Up for Multi-Billion NYC Casino Race
New York City has always been attractive to real estate developers. Now, it’s attracting similar levels of interest from casino developers. The New York State Gaming Commission will issue three licenses for downstate casinos, and everyone has their eyes on the prize.
One of the biggest names in the gaming industry, Caesars Entertainment, has already made its move. For its Times Square casino plan, Caesars has teamed up with Vornado’s number-one competitor: SL Green Realty Group.
Wynn Resorts is looking at a Hudson Yards casino in partnership with Related Companies. Hudson’s Bay Company is eyeing a casino upstairs from Saks Fifth Avenue.
NY Mets owner Steve Cohen is eyeing a potential team-up with Hard Rock Casino for a Queens site close to Citi Park. Even Coney Island is in contention, thanks to Thor Equities.
A license won’t come cheap for the winning bidder. Those throwing their hat in the ring must fork out $1 million just to file their application. The minimum bid is $500 million for the license plus another $500 million in capital commitment for development.
Eventual winners will most likely face additional logistical challenges. Staffing for the new casinos may be tricky due to an ongoing labor shortage. Legislators attempted to address the issue by removing casino employment restrictions related to past criminal convictions. However, Gov. Kathy Hochul vetoed the bill.
A Big Year for Casino Expansion?
Depending on how things go in the legislature, New York casino expansion might not be limited to the retail sector.
Given the massive success of online sportsbooks in the state, New York is now looking at legalizing iGaming. At the upcoming hearing on Jan 31, the state will review Mobile Sports Wagering’s first year in operation and its impact on the New York State Budget.”
The main topic will be increasing the number of sports betting licenses and possibly adjusting the tax rate. However, it’s widely expected that other matters, including the NY online casino effort, will make it onto the agenda.
Sen. Joseph P. Addabbo tried to push online casino legislation last year. After that effort failed, Addabbo admitted that it might have been too early, given that sports betting had just launched. However, things may be different this year. He expects to include interactive gaming (i.e., online casinos) in this year’s budget proposal.
In the meantime, a separate effort is underway to legalize a more limited form of iGaming. On Jan 17, State Assemblyman J. Gary Pretlow, D-Mount Vernon, introduced a New York online poker bill. Online poker would generate substantially less revenue than full online casinos. However, the state missed out on additional federal funding this year, so any new tax revenue would be welcome.
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