Resorts World NYC in Dispute with State Over $500M in Racing Payments

^{Racing support payments are the subject of new legislation backed by Resorts World NYC that would lower its tax bill. (Photo: Anthony Behar / Sipa USA / Alamy Live News)} 

Resorts World New York City is looking to restructure racing support payments to the state of New York as owner Genting looks to avoid fronting the entirety of what could be well over $500 million before the other downstate casinos in the state go live.

Resorts World has been pitching legislation to New York lawmakers that would avoid adding these costs on top of the casino’s tax bill, at least as long as it remains the only resort open in New York City. 

Resorts World Looks for Compromise on Racing Support

According to documents posted by NYSFocus.com, the proposed legislation would specify that payments intended to support horse racing in the state would come from the larger “commercial gaming revenue fund,” rather than be paid on top of existing taxes. 

Racing support payments have existed in New York since 2001, when video lottery terminals first came to the state. At the time, lawmakers had operators pay a share of revenues to support the horseracing industry. In 2023, lawmakers added regulations requiring any future casinos to pay support payments at the same rate as VLT facilities were doing in 2019, adjusted for inflation going forward.

At the time, the state projected that the downstate casinos would owe about $151.7 million annually to the Racing Association in 2023, which would then grow with inflation.

But with Bally’s Bronx and Metropolitan Park set to open their doors no earlier than 2030, Resorts World NYC is currently the only facility that would be making these payments, which could total more than $500 million by that time. And while Genting says it’s not trying to reduce its payments to the state, it does argue that it is already paying more than enough to the state and other funds.

Resorts World’s proposed situation would take any racing payments out of its general tax rate for now. That would change once at least two total downstate casinos are opened, at which point those facilities would split the payments on top of their promised tax rates.

Tax Structure: 'A Matter of Interpretation’

When Resorts World NYC made its bid for one of three downstate casino licenses, it offered to maintain its 56% tax rate, which is what it was already paying when it offered only VLT games at the facility. Had the bidding process proved more competitive, offering such a high tax leg could have given it a leg up over other proposals.

Ultimately, however, only three proposals were still in the running when New York gaming officials made their determinations, and all three were able to secure licenses. And while Resorts World went well above the minimum tax rate requirements, Bally’s will pay the offered 30%, while Metropolitan Park will come in even lower at 25%.

Genting attempted to get the state to accept a lower rate after seeing how much more it would pay than its competition, but the New York State gaming Facility Location Board refused to budge, saying that it had to take the bids as proposed to maintain the integrity of the bidding process. 

In its bid for a downstate license, Resorts World wrote that the proposed 56 percent rate was “inclusive of racing support.” On the other side, the New York State Gaming Commission argues that the 56% in taxes is earmarked for the Metropolitan Transportation Authority (MTA) and educational aid. While neither of the other casinos has indicated their tax rate is inclusive of the racing support fund, Resorts World has pointed out that the Gaming Commission had promised that bidders wouldn’t be forced to pay different tax rates than the ones they proposed themselves.

“It’s a matter of interpretation,” State Sen. Joseph Addabbo (D-Queens), the chair of the Senate Racing, Gaming, and Wagering Commission, told NYSFocus.com. “That’s part of the problem, to get people a table to decipher, what is the meaning of the 56%?”

However, it’s unclear whether this legislation will get any traction in the state legislature. NYSFocus cited sources who said that leaders in both the New York Senate and Assembly were sympathetic to the request, but that the Gaming Commission is opposed. And with the legislative session ending around Thursday, June 4, there’s little time remaining for a change to the current regulations to pass this year.