Resorts World NYC Finds Support for Tax Relief from Local Lawmakers

_{Resorts World New York City is seeking to reduce its tax rate, which is higher than that of its competitors. (Photo: Associated Press / Alamy)}

A group of Queens lawmakers signed on to a letter last week urging New York State Gaming Commission Chairman Brian O’Dwyer to reduce the taxes and fees the commission says are owed by Resorts World New York City, saying the rates are excessive.

The letter, signed by 10 Democratic lawmakers, was sent on Aug. 25 and asks for the governor’s office to step in to resolve the issue.

The Taxing Question of Taxes & Fees

When Genting made its proposal to win a downstate casino license, it offered a 56% tax rate on slot revenue. However, the downstate casinos must also pay mandated revenues in support of the state’s horse racing industry. Under that obligation, the casino says it would owe an additional 16% of its slot revenue, for a total of 72%.

Resorts World’s proposal stated that its 56% figure was inclusive of all taxes and fees owed to the state, while the Gaming Commission has argued that the proposed number covers only taxes, not additional obligations.

“The Gaming Commission determined that Resorts World would pay a 56% tax rate on slot-machine gross gaming revenue, just as Resorts World proposed to pay in seeking the license,” Gaming Commission spokesperson Lee Park said, via The New York Post. “By law, this gaming-revenue tax is separate and apart from their other required statutory obligations, which are not taxes.”

The Gaming Commission has noted that these additional payments for the racing industry do not have to come from slots revenue, making arguments that tie these payments to the existing slots tax rate somewhat disingenuous.

But the lawmakers who signed last week’s letter say that the total financial obligation is excessive. In the letter, they point out that additional payments might threaten the size and scope of the planned expansion at Resorts World New York City.

“The uncertainty now threatens not simply one company, but billions of dollars in private investment, thousands of jobs, local businesses, and the communities we represent,” the letter reads. “RWNYC should pay the 56 percent slot gaming tax rate it offered, and the racing industry should continue to receive the full support required under State law.”

Resorts World Promised a Higher Tax Rate Than Competitors

The letter, signed by notables such as Rep. Gregory Meeks (D-New York), who also serves as the Chairman of the Queens Democratic Party, and State Sen. Joe Addabbo (D-Queens), who is the Chairman of the New York Senate Committee on Racing, Gaming and Wagering, argues that both the state and casino operators must equally be held to their commitments.

“Applicants must be held to the financial, employment, investment, and community commitments they make to New York,” the letter reads. “At the same time, the State should administer those commitments according to the framework upon which they were offered and evaluated.”

Resorts World New York City has pushed for legislation that would allow it to avoid the additional racing support payments, which it says could total more than $500 million before Bally’s Bronx and Metropolitan Park open around 2030. 

What’s not in dispute is that Resorts World is paying an unusually high tax rate compared to most full casinos. When Genting proposed converting its existing video gaming facility into a casino resort, it offered to maintain the same 56% tax rate the venue had been paying, hoping that the higher rate would give its bid a competitive advantage.

But in the end, there were only three bids that survived the lengthy approval process. The other two New York City casinos offered – and will pay – far lower tax rates, with Bally’s at 30% and Metropolitan Park at 25%. Genting has also tried to get the state to lower its tax rate after seeing the disparity, but the Gaming Facility Location Board said that doing so after the fact would threaten the integrity of the bidding process.