In a high-stakes bid to secure one of the coveted New York City casino permits, operators may find themselves wading deep into financial waters. If they clinch one of the prestigious state selections, the cost of bringing their ambitious visions to life in the Big Apple could necessitate substantial borrowing, potentially burdening them with hefty debt loads.
S&P Global Ratings has cast a discerning eye over the situation in a recent report. The forecasting outfit surmises that companies winning the trio of downstate casino licenses could find their leverage increased. At the same time, endeavors to refine corporate credit metrics may experience deceleration.
The anticipated financial footprint of these projects is no trivial matter. Estimates put the lowest end of the spectrum at $2 billion for expansions or remodels of current establishments. Ambitions for brand-new facilities, however, could see costs balloon past the $5 billion mark. S&P points to a time frame of 12-18 months before the full impact of this leveraging could manifest.
Speculation is rife around which venues will secure licenses, with savvy eyes set on MGM Resorts International’s Empire City Casino and Resorts World New York as likely candidates for two of the downstate spoils. Nevertheless, such conjecture awaits confirmation.
The allure of New York City as a gaming mecca is not lost on state officials, who understand all too well the opportunity to benefit from one of America’s few remaining gaming territories. They appear poised to capitalize on this unique position to fetch a premium from operators for the state’s ailing coffers.
Rumblings suggest that the price tag for a casino permit could soar to $1 billion, a steep climb from the initial $500 million estimate. Such a figure doesn’t account for construction expenses, with corporate giants like Las Vegas Sands and Hard Rock International forecasting total outlays of up to $6 billion and $8 billion for their lavish proposals.
According to S&P’s analysis, the announcements of successful bids may not grace headlines until the latter half of 2024, with significant capital investments unlikely before 2025. The duration of these ambitious projects could span multiple years due to New York’s construction rigors and the proposed scale of the developments.
The bidders that eventually triumph in acquiring a New York license will need to balance the immediacy of financial burdens against the allure of future riches. As giants in the industry juggle funds across global projects and existing financial commitments, they brace for the potential impact on their credit standings. Yet, despite these trials, industry insiders project that the three New York casino hotels, once fully operational, could rival or surpass the revenues of the entire Las Vegas Strip.
As the narrative of New York’s casino expansion unfurls, with its myriad of fiscal challenges and towering aspirations, one can’t help but draw parallels with the dynamic realm of online gambling. Just as the physical casinos rise with anticipation of future fortunes, the virtual world of betting beckons gamers with a promise of immediate excitement and potential rewards.
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