Dems push Hochul to block staggering 72% tax rate slapped on NYC’s first full casino – Queens Democrats are pressuring Governor Kathy Hochul to block a plan that would impose an exceptionally high 72% tax rate on slot revenues for Resorts World New York City, arguing it will stifle investment and job creation.
What Happened
Local lawmakers sent a strongly-worded letter on August 25th to Brian O’Dwyer, chairman of the New York State Gaming Commission, to advocate for Resorts World New York City. State Sen. Joe Addabbo, chairman of the Committee on Racing, Gaming and Wagering, criticized the 72% rate as “excessively high” and called for the governor’s office to resolve the issue, noting the Gaming Commission operates under her purview.
Resorts World, owned by Genting, began as a slots parlor in 2011 and recently secured a state license to offer live table games. The casino initially proposed a 56% tax rate, which included subsidies for the horse racing industry and is the rate currently being paid. However, the seven-member Gaming Commission, with five Hochul appointees, contended that the 56% rate did not account for Resorts World’s separate obligation to support the horse racing industry. This additional obligation would reportedly increase the total tax to 72% of slot revenues, amounting to an extra $150 million annually over a 15-year contract.
Key Details
- Queens Democrats are pushing Governor Kathy Hochul to block a 72% tax rate on slot revenues for Resorts World New York City.
- The current tax rate paid by Resorts World is 56%, which is already among the highest in the country.
- The additional 16% is due to a separate obligation to support the horse racing industry, as interpreted by the Gaming Commission.
- This would result in an additional $150 million per year for 15 years.
- Comparatively, Atlantic City casinos pay 9.25%, Michigan’s Detroit casinos 19%, and Ohio 33%.
- Ten lawmakers, including Rep. Gregory Meeks, signed a letter calling for “immediate resolution” before a decision expected by Friday.
- The letter states the uncertainty threatens “billions of dollars in private investment, thousands of jobs, local businesses, and the communities we represent.”
- Signees urged the state to adhere to the 56% rate offered by RWNYC, ensuring the racing industry still receives mandated support.
Why It Matters
The proposed 72% tax rate is significantly higher than those imposed on casinos in other major gambling markets, potentially making New York City’s first full casino uncompetitive and deterring future investment. Lawmakers argue that such a high rate could jeopardize billions in private investment, thousands of jobs, and the economic well-being of local businesses and communities. The dispute highlights the tension between maximizing state revenue and ensuring the viability and growth of new industries, particularly in a highly competitive sector like gaming. The resolution of this issue will set a precedent for future casino development in New York and has significant implications for economic development in Queens.