The Manhattan Project

Who will be awarded one of the three coveted New York City casino licenses? And perhaps more importantly, when will we find out?

Jun 11, 2024

NEWS: New York’s downstate casinos are still years away, but the competition for the available licenses is heating up.
QUICK HITTER: Illinois Governor signs sports betting tax increase into law.
VIEWS: ESPN Bet is in the early stages of its life, and there are already calls to pull the plugs.
NEWS: Fantasy sports operators team up to create the Coalition for Fantasy Sports and appoint a former LVS executive to lead the charge.
BEYOND the HEADLINE: Underdog Fantasy partners with the UFL.
AROUND the WATERCOOLER: How much money have North Carolina sports bettors really lost?
STRAY THOUGHTS: I’ll be talking sports betting tax rates on a Webinar tomorrow.

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New York Casino Licensing Is Still Messy

New York plans to hand out three downstate casino licenses, and lawmakers want to speed up the process. However, the process is complicated and becoming extremely messy.

In mid-May, State Sen. Joseph Addabbo Jr. and Assemblyman Gary Pretlow proposed a bill to speed up what has been a sloth-like licensing process. The bill would set a July 31 deadline for bids and a second deadline for the gaming commission to approve the three licenses by March 31, 2025. The bill was recently amended and passed by the legislature, with the bid deadline moved to August and licensing recommendations required by December 31, 2025.

Recent reporting by NY Focus indicates that Resorts World suggested the accelerated timeline, which is likely to reduce the number of bidders, as several projects face land use, zoning, and other legal problems.

The truth is that two licenses are spoken for, as the state’s two existing racinos (Empire City Casino and Resorts World Casino) are heavy favorites to receive a license. That leaves one license and nine interested parties:

Manhattan Project 1: Wynn Resorts + Related Companies (Dolphins owner Stephen M. Ross)
Manhattan Project 2: Caesars Entertainment + SL Green Realty Corp.
Manhattan Project 3: Hudson’s Bay Company (Saks Fifth Avenue)
Manhattan Project 4: Mohegan + Soloviev Group
Manhattan Project 5: Vatche Manoukian (Parx Casino) + Larry Silverstein
Coney Island: Saratoga Casino Holdings and the Chickasaw Nation + Joseph Sitt (Thor Equities Group)
The Bronx (Trump Golf Links at Ferry Point): Bally’s Corporation
Citi Field: Hard Rock and Steve Cohen
Nassau Coliseum: Las Vegas Sands

One project on the ropes is Steve Cohen’s proposed Citi Field project, which has run into a legislative roadblock. The proposed parking lot sits on conservation lands, which requires legislative approval. State Sen. Jessica Ramos opposes the casino proposal and has de facto veto power. You can read the full story at Casino Reports.

Quick Hitter: Pritzker makes it official in Illinois

When he signed his name to the state’s budget, Illinois Gov. J.B. Pritzker raised the sports betting tax rate from a flat 15% to a graduated tax rate starting at 20% and topping out at 40% (previous STTP coverage here). The lingering question is whether Illinois is an outlier or the first of many.

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All We Are Saying Is Give Penn a Chance

We recently had the opportunity to move our martial arts school into a much larger space. Everything happened far too quickly, but the window of opportunity would only be open for a short time, so we jumped through it. It was a quick move, and we are now in a much larger and better facility. It was nearly move-in ready, but it’s not perfect. We would have liked more time. We won’t have an official “Grand Opening” until the fall, giving us time to put the finishing touches on the space.

I would liken this to Penn Entertainment’s decision to launch ESPN Bet in November 2023, just a few months after it announced its partnership with ESPN. The company did this knowing that important product enhancements wouldn’t be ready until the NFL season, at the earliest.

Fortunately, our martial arts school doesn’t have a DraftKings or FanDuel in the area. Penn isn’t so lucky; deciding to launch before its product was 100% ready was more complicated.

Now, activist investors are trying to force Penn’s hand (and have succeeded in creating divisions among shareholders), with everything from a strategic review to a pullback on online gambling to an outright sale being bandied about.

While I’m a big believer in the dangers of the sunk cost fallacy, pulling back on ESPN Bet before it’s been given a chance seems like absolute folly. Penn has admitted the product is not on par yet, nor has it made a full-scale marketing push – Penn’s goal is to have both remedied near the start of the NFL season.

As the team at JMP Securities wrote in a recent note on potential Penn suitors, “… history suggests it takes at least several years to build a successful online business, a large amount of capital, and a perfect strategy to run the sports betting and iGaming businesses together.”

Coalition for Fantasy Sports Appoints Former LVS Exec as Executive Director

According to the Las Vegas Review-Journal, former Las Vegas Sands executive J.T. Foley has been selected to lead the Coalition for Fantasy Sports, which comprises four DFS operators: Underdog Fantasy (a newsletter sponsor), PrizePicks, Betr, and Dabble. The Mission is to “expand the fantasy sports market nationwide.”

Foley will take over as the executive director after 17 years with Las Vegas Sands, including acting as the company’s vice president of government relations.

Foley will have his hands full, as DFS companies have suffered several significant losses in 2024, as states have taken a more restrictive approach to some of the offerings, most notably player vs. the house contests. DFS 2.0 operators are now trying to regain control of the narrative.

Underdog’s Jeremy Levine posted on LinkedIn about the appointment of Foley, saying:

“Really excited to have J.T. Foley join as as the Executive Director for the Coalition for Fantasy Sports. We started to coalition to make sure sports fans can play the games they love and we're thrilled to be adding his leadership, more members and planning to continue to expand the mission to help all those bringing innovation to sports fans and gaming.”

PrizePicks Adam Wexler took to X to discuss the appointment:

“We’ve been working on the formation of a Coalition since the Summer of 2022.
“While it’s been a helpful vehicle to represent & push forward the emerging category of DFS+ to date, the significance of now having a seasoned gaming veteran like J.T. Foley leading The Coalition for Fantasy Sports cannot be understated.
“J.T.’s extensive industry background & expertise after 15+ years in a VP role at world-renowned Sands made him the ideal candidate to elevate our group, and it’s great to see his former employer show high praise as he enters his next professional chapter.
“I look forward to collaborating with him to ensure our current coalition members, as well as the broader fantasy sports space, provide the proper consumer protections as we enable fans to engage deeper with the sports they love.”

Beyond the Headline: Underdog Teams Up With UFL

Underdog Fantasy has entered into an agreement with the United Football League (UFL) to become the UFL’s exclusive fantasy sports partner.

The UFL is an upstart league with some interesting rules that lend themselves to betting opportunities, like the UFL’s point-after-touchdown (PAT) plays. Per the press release, UFL teams have three options after scoring a touchdown:

A play from the 2-yard line for one point
A play from the 5-yard line for two points
A play from the 10-yard line for three points

“The UFL has injected vibrancy and high-octane energy into the Spring sports calendar,” said Underdog Founder and co-CEO Jeremy Levine. “Underdog and the UFL share a similar DNA – leading with innovation and constantly testing new, fan-focused ideas, so it’s a very natural partnership.”

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Around the Watercooler

Social media conversations, rumors, and gossip.

Sporttrade CEO Alex Kane has been banging the drum when it comes to state revenue reports and the surface-level analysis that usually accompany them.

As Kane notes, while it might seem that North Carolina bettors have lost more than $230 million, when promotional credits are factored in, North Carolina bettors are ahead by $67 million.

Kane and I discussed this during his appearance on the Straight to the Point Talking Shop Podcast.

Stray Thoughts

I’ll be part of an Indian Gaming Association webinar tomorrow, along with Brendan Bussman, that will examine the Illinois sports betting tax increase and what states might follow.

The Webinar, The New Normal: Beyond New York: Predicting State Moves on Sports Betting Taxes, is scheduled for 1 PM EST.