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ponents say New York must follow so tax revenue doesn’t leak out.

It was the same argument used to advance mobile sports betting, which became legal in New York early this year and has generated $500 million in revenue for the state through September, according to data compiled by the Urban Institute. The costs of this revenue, in terms of gambling losses and addiction rates, are still to be tallied.

“I hope i-gaming is part of budget talks next spring,” Addabbo said. “And certainly we would need resources for those who get addicted.”

What else could be next? Maybe more casinos. Even after the three open, New York would have just one “gaming position” per every 896 people, CBRE said. Boston has one for every 691, and Philadelphia ,one for every 477.

In other words, CBRE wrote, New York could “still be potentially underserved.” ■ Natalie Sachmechi contributed reporting to this story.

POTENTIAL LOCATIONS FOR THE NEW CASINO LICENSES SPAN THE FIVE BOROUGHS

l Where casino licenses are likely to be awarded l Proposed locations

Casino licenses are no sure bet for state’s coffers

Supporters promise a windfall of tax revenue, but some analysts see the money as a flash in the pan

BY JAMES O’DONNELL

Three new casino licenses being awarded by the state will soon bring the razzle-dazzle of live table games, such as poker and blackjack, and in-person sports betting to the city. But supporters and lobbyists promise the licenses will bring something else too: a windfall of tax revenue for the state.

Four casinos have been operating upstate since 2018, but the new licenses will mark the first opportunity for casino operators in the city, in Westchester County and on Long Island to open fully licensed facilities. Lawmakers have gone all-in on supporting casinos as tax revenue generators, with state Sen. Joseph Addabbo Jr. calling the licenses “a win for New York state and the local communities where these licenses will go.” Gov. Kathy Hochul fast-tracked the process to start sooner than originally planned and licenses are expected to be awarded next year.

But a range of experts, from tax policy analysts to gambling addiction counselors, say the benefits are not as clear-cut as lawmakers imply. How the winnings are paid out

The winners of the bidding process will ultimately have to pay $500 million each for the licenses, bringing in $1.5 billion for the state. But after that windfall, the state’s winnings will depend on how the casinos perform.

Depending on location and games, gamblers bet between $150 million and more than $800 million a month at New York’s casinos. After payouts, fully licensed facilities are typically taxed around 30% of net slot machine revenues and 10% of net table game revenues for a total tax rate between 30% and 40%.

According to the law, 80% of tax revenue from licensed casinos is earmarked for the state's education budget. An additional 10% is split equally between the casino’s home county and the home municipality, and the remaining 10% is distributed to nearby towns on a per-capita basis.

For the state’s last fiscal year, which ended in March, the four upstate casinos contributed about $163 million in tax revenue, meaning about $130 million went toward the education budget. With the state’s total education budget at $39.5 billion, the funds represented about 0.33% of

the total. But supporters say the population density of the city will mean significantly higher figures. Two of the three licenses are expected to go to existing gambling locations that have only video-gaming licenses: Empire City at Yonkers Raceway and Resorts World Casino in Queens. Those two facilities contributed $566 million to education in fiscal 2022, about 1.43% of the budget. In total, the state’s nine video-gaming facilities contributed $972 million in tax revenue earmarked for the education budget. It’s difficult to estimate how much revenues will rise at Empire City and Resorts World if the two casinos obtain full licenses, but Tioga Downs outside of Binghamton offers evidence of a bump. The casino operated BY THE without a table license until 2016, and its generated tax NUMBERS revenue hovered between $17 million and $23 million $130M annually. When it began operating with a full license in 2018, those figures rose to UPSTATE CASINO TAX $29 million in 2021. REVENUE added to the education budget in Schools or tax cuts FY’22 When selling the idea to community members, which 0.33% are encouraged to weigh in on the location of the casinos, lawmakers and supPERCENTAGE of the porters praise the fact 80% of total education budget the tax revenue will go torepresented by upstate ward education. But the law casino tax revenue also provides another outlet for those funds. The money can also be used for “real property tax relief,” according to the law, and it’s not clear what portion of the $131 million raised by upstate casinos in the last fiscal year have gone toward which purpose. To Nathan Gusdorf, executive director of Fiscal Policy Institute, the impact of the revenue from the new casinos will depend entirely on whether the earmarked funds are actually put toward education. “It is essential that this revenue support teachers and students, as intended, and not be used to cut taxes for homeowners,” he said. “Additionally, our schools’ operating expenses must be supported by sustainable, recurring revenue, not one-time windfalls.” The bulk of tax revenues goes toward education, Addabbo said, but the lawmaker could not provide a specific figure of how much. “The money is going towards education and not towards the alternative,” he said. “It’s now supplementing an education budget that’s increasing every year.” See BET on page 16

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