Destination Unknown
Plopping a casino in the middle of a thriving metropolitan city sounds like a road to riches, but so far (at least in the US) the results are mixed.
The Bulletin Board
THE LEDE: Are big city casinos worth the time and money?
NEWS: Not everyone opposes reducing the gambling loss deduction cap.
NEWS: Indiana sweepstakes bill considers online casino legalization.
BEYOND the HEADLINE: Indiana Committee passes online lottery bill.
AROUND the WATERCOOLER: Kalshi’s new VIP status.
STRAY THOUGHTS: I can’t handle another year like 2025.
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The Lede: Are Big City Casinos a Boom or a Bust
In a recent editorial titled, “Casinos Are a Bad Bet for US Cities,” the Bloomberg editorial board argues against the widespread expansion of casinos across the country (specifically, major metropolitan, destination casinos), calling them a poor choice for cities, framing it as a long-running experiment where the “house is winning” at the expense of urban areas.
Despite the industry’s breadth and apparent success — 134 million Americans visiting over 1,000 casinos last year and supporting 1.8 million jobs — the editorial team implies these benefits come with significant downsides for cities.
Of the 1,000 casinos, very few (outside of Las Vegas) are in a destination city, and up until a few years ago, there were zero in what would be termed a major city. So, while aa casino in a major city may seem like a road to riches, that theory is largely untested.
As I wrote in May, regarding the New York casino licenses:
“They’ll test whether mega-resorts in major cities can thrive, as thus far, Wynn’s Boston and Bally’s Chicago projects haven’t exactly set the world on fire. The success (or lack thereof) of New York City casinos will likely determine whether casino giants continue to chase multi-billion-dollar urban projects in Texas and beyond, or stick with smaller regional models.”
Everyone wants to create the next great gambling destination (New York City, Dallas, Chicago, Boston) to recreate Las Vegas, Macau, or Singapore, but the track record isn’t so great and destination casinos in the US face several challenges:
Operators pay a premium for location (high licensing fees and tax rates and steep project commitments running into the billions).
As seen in the New York City licensing process, there’s a lot of red tape, from zoning boards to traffic to environmental concerns. And that will continue during the construction process.
As we’ve seen with prediction markets, tax rate changes, and the expansion/legalization of other forms of gambling (VGTs), the situation on the ground can change, turning a thriving business into a surviving business overnight.
It was a surprise at the time, but MGM’s decision to withdraw its proposal at the eleventh hour may be the signal within the noise; the sign that big city destination casinos are not the panacea they’ve been for Macau and Singapore.
Evidenced by some of the recent US projects.
Bally’s Chicago
The city’s first casino opened its temporary facility in September 2023. The permanent Bally’s site, a $1.7 billion resort is slated for completion this year.
Billed as a catalyst for economic revitalization, the project promised to generate hundreds of millions in annual tax revenue for the city, funding pensions and infrastructure. However, by the end of 2024, it generated just $63.2 million in new city revenue, far short of the projected annual payments of $200 million when fully operational. And now Bally’s is cautioning that the new budget allowing VGTs in Chicago could lower the city’s annual cut of casino revenue by $74 million and cost 1,050 jobs.
Encore Boston Harbor
Wynn Resorts’ Encore Boston Harbor (located in Everett, just across the Mystic River from Boston), which debuted in June 2019 as Massachusetts’ first destination, resort-style casino, with a final price tag of $2.6 billion.
It has fared better than its Chicago counterpart but hasn’t transformed the urban landscape as proponents hoped. By August 2025, it had surpassed $1 billion in total tax revenue for the Commonwealth. Still, it has fallen short of initial projections. While revenue has improved over time, annual GGR has hovered around $730-750 million in recent years, which several years after opening is still well below the projected $800 million.
And anecdotally, as someone who lives in Massachusetts, Encore Boston Harbor feels more like a stable regional casino than a revolutionary urban anchor that is a model for big city casinos.
New York’s High-Stakes Gamble
Fast-forward to New York, where the long-awaited downstate casino licenses were finally approved in December 2025 by the New York State Gaming Commission.
All three bids received the green light:
Metropolitan Park (a Hard Rock-led project near Citi Field in Queens)
Resorts World New York City (which will expand its existing Aqueduct Racetrack)
Bally’s in the Bronx (on the site of a former Trump golf course)
While these developments could inject billions into the local economy, with promises of jobs, tourism, and tax revenue to fund education and transit, as the Bloomberg editorial cautions, these casinos are no sure thing.
And Then There’s Texas
Which brings me to Texas, where Las Vegas Sands is aggressively pursuing a multibillion-dollar destination resort in Dallas, modeled after its iconic Marina Bay Sands in Singapore.
The entire plan hinges on Texas legalizing casino gambling, a contentious issue in a conservative state. Assuming it does, like New York and Chicago, the burdens will be heavy.
LVS wants to make Dallas the “next great gambling destination,” but as with Boston and Chicago, the track record suggests caution: regional models may prove more sustainable than chasing Vegas-scale glamour in dense urban areas.
News: More Bad News For Gambling Loss Deduction Supporters
Last year (okay, it was a couple weeks ago), in an article titled, The Bearer of Bad News, I took a deep dive into the effort to overturn the 90% gambling loss deduction cap that was imposed last year. In the column I noted that while gambling support is often bipartisan, so is the opposition:
“When the topic of legalization comes up, I often point out that gambling is one of a few bipartisan issues left in this country. Red states and blue states are in play. Legislative champions come from both sides of the aisle. And the final vote tally will include plenty of Republicans and Democrats.
“But here’s the thing: The bipartisanship also applies to opposition. For every lawmaker eager to tap into gambling revenue for schools and infrastructure, there’s another decrying it as a moral hazard (the social conservative view) or a predatory industry preying on the vulnerable (the progressive Democrat view).
“Raise Cain all you want about fairness, but the idea that lawmakers will be sympathetic to the plight of professional gamblers, and look at gambling loss deductions capped at 90% of winnings as a tax on phantom income, is a theory that is residing outside of reality.”
We’ve heard plenty from the proponents of reinstating the 100% gambling loss deduction cap, but the opponents (who STTP has known exist in droves) have been largely silent, until now.
The Punchbowl article is paywalled, but Dustin Gouker has a good summary here.
Lankford was one of the architects(?) of the controversial change, per Punchbowl reporting back in July: “The change was largely due to tweaks that Finance had to make for the current policy baseline. But there was Finance interest in evaluating the deduction too. LANKFORD told us he did some work early in reconciliation on the issue but wasn’t involved in the final decision.”
And as I said in my December column: “As I’ve said in the past (many times), for many lawmakers, reducing gambling is a feature not a bug.”
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News: Indiana Lawmakers Differ on Sweepstakes
Yesterday, the Indiana House Public Policy Committee held a hearing on HB 1052, a bill that would ban sweepstakes gaming in the state. Indiana Gaming Commission General Counsel Natalie Huffman was one of the speakers calling for a legislative ban, saying that Indiana’s laws don’t allow the IGC to do anything but send cease-and-desist letters.
While some lawmakers are sympathetic, others, like Rep. Jim Lucas, suggested regulating the industry.
“I don’t think it’s right that an industry found a way to work within the boundaries of the law… we should punish them by outright banning them,” Lucas told the committee, arguing that a ban is akin to the legislature picking winners and losers.
The Social Gaming Leadership Alliance (SGLA) issued a press release following the hearing highlighting its proposed regulatory framework “that would generate over $20 million in annual revenue for Indiana through player purchase taxes and operator registration fees, while enforcing strict age verification, data privacy, and responsible gameplay protections.”
Lloyd Melnick, Chief Growth Officer at VGW, testified in support of regulation, noting, “a near constant pace of innovation in gaming and entertainment overall and Social Plus games benefit players by giving them a broad range of fun, safe entertainment.”
Others, including Rep. Ethan Manning, the bill sponsor and committee chair, somewhat disagreed. Manning offered an amendment to clarify the definition of sweepstakes, but also noted the state hasn’t legalized online casinos, so regulating sweepstakes would certainly feel like the legislature was picking winners and losers to the state’s casino operators.
Several amendments were proposed, including scrapping the ban and regulating sweepstakes and another that would legalize online casino gambling.
No vote was taken on the bill or the proposed amendments. The Indiana legislative session ends on March 14.
Beyond the Headline: Indiana iLottery Bill Advances to House Floor
While sweepstakes was debated, a bill that would authorize online sales of draw games and eInstant games, HB 1078, (also authored by Rep. Ethan Manning) was approved in a 9-3 vote and sent to the House floor. The committee members opposed to the bill were not against online lottery per se, rather they called for an amendment to legalize online casinos to be included.
The legislation would also prohibit lottery couriers (similar to Manning’s HB 1053 from last year) and requires the Indiana Lottery to establish and oversee a voluntary exclusion program.
Around the Watercooler
Social media conversations, rumors, and gossip.
Kalshi’s new Platinum status sounds a lot like casino and sportsbook VIP programs:
As Jeff Edelstein wrote at InGame, Kalshi is not alone in offering VIP status, “DraftKings, which launched its own prediction market a few weeks ago, has also launched a VIP program for traders.”
And Kalshi pointed out that these programs are not uncommon in the brokerage world: “Similar to other financial markets, brokerages, and large consumer brands, we’re piloting a program that offers priority support and other benefits to some of our most loyal customers,” Elisabeth Diana, head of communications at Kalshi, told InGame.
Still, one has to wonder how VIP programs (for sports bets/trades) will be structured via prediction markets, considering sportsbook VIP programs are coming under increasing scrutiny, and have far more restrictive guardrails in place.
Stray Thoughts
2025 was a year of tumult. The rise and fall of sweepstakes, sports betting (and online casino) legalization efforts officially grinding to a halt, and the emergence of prediction markets.
Suffice it to say, we ended the year with more questions than answers. Hopefully, we start to get more of those answers in 2026, because a repeat of 2025 (while good for the newsletter) will likely fry quite a few brains, including mine.