Vornado Withdraws From the Midtown New York Casino License Race

New York City's second-largest commercial landlord is walking away from its bid to land a casino licence and a chance to build a property in place of the now-demolished Pennsylvania Hotel.

In a third-quarter earnings conference call held last month, CEO Steven Roth did not reveal any details of the reason for backing off the deal, but is reported to have said: "It's highly likely we will not pursue a casino license."

The current economic conditions are challenging, with unfavourable office space demand and rising interest rates adding to the complications for Vornado. Mr Roth also said: "The company's policy in this environment is to retain as much cash as we can. The preservation of our balance sheet is the number one priority.”

The $3 billion costs are likely to have proven too prohibitive, while it's possible the project didn't tick all the boxes for the company's investment guidelines. When rumours of Vornado's involvement in a potential development first came about, a company spokesperson said at the time: "Our most important criterion for any project is that it meet the economic development objectives and produce the transit and public improvements outlined in the state’s General Project Plan.”

The likes of SL Green Realty, Related Cos, and Silverstein Properties are all still in the running for permission to open a casino, and the heavy competition could also have proven a problem for the business.

Fantastic metropolis with a colorful casino

The New York Casino Prize

New York State is set to award three casino licenses in 2024, with two already having been secured for two racetracks in Queens and Yonkers.

It means an intense fight on for the third and final award, which could bring upwards of $2 billion in annual revenue to the city. According to some estimates, the licensing and construction costs will be in the region of $3 billion.

The latest rumours swirling around the licensing battle are that Las Vegas Sands and Wynn Resorts are among the leading gaggle of businesses in with a shot.

What is the New York Gambling Landscape?

From a licensing perspective, New York State Gaming Commission (NYSGC) regulates all legalised gambling activities, including lottery, horse racing, and casino gaming. Casinos, in particular, must adhere to strict licensing regulations, ensuring operations are legal and above board.

According to a report by the NYSGC, from April 2019 to March 2020, the gambling industry in New York generated $3.24 billion in total gross gaming revenue. This includes revenues from lottery, horse racing, and casino gaming. In addition, the industry also generated $1.7 billion in funding for state education programs during this period. This significant contribution to the state's economy demonstrates the importance and impact of the gambling industry in New York.

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Dmitry Rogalchuk
With over 5 years of experience in iGaming, Dmitry Rogalchuk leads a content team at CasinoCanada, ensuring that every article on the CasinoCanada website is informative and engaging for our readers.
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Last updated on: 19.03.2024

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