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Queens lawmakers are urging Gov. Kathy Hochul to intervene in a dispute that could significantly increase Resorts World New York City’s payments to the state and horse racing industry.
The issue centers on whether payments supporting horse racing are included in the 56% slot-revenue tax rate Resorts World agreed to during the licensing process or must be paid separately. The latter interpretation would raise the casino’s effective payment burden to about 72% of slot revenue.
The dispute could also affect Genting’s plans for a $5.5 billion expansion of its Queens property.
Queens lawmakers call for state intervention
Ten Queens Democratic lawmakers sent an Aug. 25 letter to New York State Gaming Commission Chairman Brian O’Dwyer urging an immediate resolution.
State Sen. Joe Addabbo, chairman of the Senate Racing, Gaming and Wagering Committee, said Hochul’s office should become involved because the commission is overseen by the governor’s administration.
“A 72% tax rate is excessively high,” Addabbo told the New York Post.
The letter also included US Rep. Gregory Meeks and several state and city lawmakers representing Queens. They warned that uncertainty over Resorts World’s obligations could threaten billions of dollars in private investment, thousands of jobs and opportunities for local businesses.
The lawmakers argued that the state should administer Resorts World’s obligations according to the financial framework under which its casino proposal was evaluated.
Horse racing payments at center of dispute
Resorts World proposed a 56% tax on slot revenue when it sought one of New York’s three downstate commercial casino licenses.
The company has maintained that the rate was intended to include payments supporting the state’s horse racing industry. The Gaming Commission disagrees, saying those payments are required under separate state law and are not part of the casino tax.
Under the commission’s interpretation, Resorts World would owe an additional 16% on its slot revenue. The additional obligation could total about $150 million annually over 15 years, according to the New York Post.
The commission has stressed that it did not change Resorts World’s casino tax rate. Instead, it says the racing obligation is a separate statutory payment that the casino can fund from revenue sources beyond its slots.
Hochul’s administration has backed that interpretation, saying racing support payments have never been included in New York’s casino tax rates.
Resorts World, meanwhile, says its treatment of the payments was clear throughout the licensing process.
New York took temporary action
The Legislature addressed part of the dispute in June by approving legislation allowing casino tax revenue to be used for direct payments to the New York Racing Association for one year.
The measure was intended to ensure continued funding for horse racing while the broader disagreement was addressed. It did not, however, settle whether Resorts World’s racing obligation should be included in or added to its casino tax payments.
That leaves the central question unresolved as state officials and the casino continue discussions.
Resorts World NYC $5.5B expansion at stake
The dispute comes just months after Resorts World became New York City’s first full commercial casino.
The Queens property opened in 2011 as a video lottery gaming facility. After receiving one of the state’s downstate casino licenses, it began offering live table games, including blackjack, baccarat and craps, in April.
Genting has proposed a $5.5 billion transformation of the property into a large integrated resort. Plans call for additional casino space, hotel rooms, entertainment venues, restaurants and other amenities. The project is expected to generate thousands of construction and permanent jobs.
Queens lawmakers fear uncertainty over the casino’s financial obligations could complicate that investment.
Resorts World has not indicated that it plans to abandon the expansion. Company spokesman Stefan Friedman said the operator remains in discussions with state officials.
“We are having constructive conversations with the state and continue to look forward to working together,” Friedman told the New York Post.
For now, the disagreement comes down to how New York interprets the financial commitments Resorts World made during its casino bid. The Gaming Commission says the casino is subject to separate racing payments, while Resorts World maintains those costs were incorporated into its original proposal.
A resolution could determine not only how much Resorts World ultimately pays but also whether the planned Queens expansion moves forward under the financial assumptions used in its successful casino bid.
