Resorts World to ask NY to reconsider casino tax rates after bid

Resorts World, one of three bidders for a casino license in the greater New York City area, will ask the state to reconsider the company's tax proposal after offering to pay far more than two other possible projects, a person with knowledge of the matter said.

The company, part of Malaysia's Genting Group, wants the state to lower its proposed tax rate or raise the levy that may be imposed on the other bidders, said the person, who asked not to be identified discussing nonpublic information.

Resorts World has proposed the highest tax at 56% on slot machines for its project in Queens. Hard Rock International, which is planning a resort nearby in partnership with Mets owner Steve Cohen, is offering 25%, the state minimum, while Bally's Corp. has proposed a 30% levy for its Bronx project.

The New York City casino process "is a once-in-a-lifetime opportunity for the entire state to benefit from new revenue for mass transit and public education," Resorts World said in a statement. "The tax rates we have presented, at 56% on slots and 30% on tables, reflect our sense of responsibility to our properties across New York State, the greater industry, and the public."

A spokesperson for Bally's declined to comment. Hard Rock didn't respond to a request for one.

In weighing the bids, the state is looking for both economic growth and a fresh source of tax revenue. Governor Kathy Hochul is considering higher corporate taxes as part of an effort to close a potential budget gap and help fund some of Zohran Mamdani's agenda as New York City mayor.

The companies want to make sure they retain enough of the gambling proceeds to make their investments pay off.

The license awards are part of a 12-year effort to expand gambling in New York. Members of the state's Gaming Facility Location Board are touring the three proposed sites on Monday, ahead of a final decision that's expected to come Dec. 1. The board could choose none, all three or any combination therein.

Bidders were required to propose their own license fees and tax rates, subject to certain minimums, a mechanism designed to maximize state revenue. That approach is unusual, according to James Kilsby, a casino analyst with Vixio Regulatory Intelligence. 

Resorts World's property "would be one, if not the, most highly taxed commercial casino in the country," Kilsby said. Casino taxes rates vary from 6.75% in Nevada to as much as 55% in Pennsylvania. 

Resorts World, which operates a slot machine-only facility next to the Aqueduct racetrack in Queens presently and is proposing a new $5.5 billion resort on the site, said it's already the state's largest taxpayer. 

Customers play at gambling machines at the Resorts World Casino, operated by Genting Group, in Queens, New York.

New York's casino award process was also unusual in giving local committees the right to approve projects before they went to the state board. That step eliminated four of the eight initial bidders. After MGM Resorts International dropped out due to proposed changes in the duration of the licensing term, there were only three bidders left for three licenses. That reduced the need for the remaining contenders to suggest higher tax rates, Kilsby said.

Taxes are a significant cost to casinos. Lower levies allow operators to offer more perks to gamblers to entice them to come to their properties. 

In response to questions from bidders, the location board said state regulators will set the final tax rates, with the possibility that different operators pay different rates.

State Senator Joseph Addabbo, chairman of the racing, gaming and wagering committee, hopes there's some harmonization in the tax rates. 

"We need sustainable businesses," he said in an interview. "I don't want a business to come back [and] say they need a reduction. I think the decision board has its work to do."