Queens Democrats are urging New York Governor Kathy Hochul to intervene in a tax dispute that could impose a 72% tax rate on slot revenues at Resorts World New York City, the city's first full-service casino. Local lawmakers sent a letter on August 25 to Brian O’Dwyer, chairman of the New York State Gaming Commission, expressing concern that the proposed rate is excessively high and could have significant negative economic consequences.
State Sen. Joe Addabbo, chairman of the Committee on Racing, Gaming and Wagering, stated that the governor's office must resolve the issue, as the Gaming Commission operates under the governor's purview. The casino, owned by Genting, initially opened as a slots parlor in 2011 and received a license this year to offer live table games. Resorts World had proposed a 56% tax rate for its full license, which included subsidies for the horse racing industry and is the rate the casino is currently paying.
However, the Gaming Commission, composed of five Hochul appointees, argues that the 56% rate does not account for Resorts World's separate obligation to fund the horse racing industry. This separate obligation, according to the commission, would bring the total remittance to 72% of slot revenue, amounting to an additional $150 million annually over the 15-year contract. The lawmakers contend that the 56% rate should apply to slot gaming tax, while the racing industry support should continue as mandated by state law.
The letter, signed by ten lawmakers including Rep. Gregory Meeks, warns that the ongoing uncertainty threatens billions in private investment, thousands of jobs, local businesses, and the communities represented by the officials. They argue that while applicants must adhere to their commitments, the state should administer these agreements based on the framework under which they were offered and evaluated.
The commission, through spokesman Lee Park, maintained that the 56% tax rate on slot machine gross gaming revenue was proposed by Resorts World and that this gaming revenue tax is distinct from other statutory obligations, which are not taxes. The commission noted that by law, casino tax receipts can only be directed to state funds benefiting public education and the Metropolitan Transportation Authority. Funding for racing, mandated by a separate law, is not considered a tax and can be paid from any revenue source, not solely from slot machines.
A spokesperson for the governor stated that tax rates have never included racing support payments and that the state's priority is to generate revenue for education and transit, ensure continued support for racing, and deliver the promised economic benefits from Resorts World. Resorts World has indicated it is engaged in constructive conversations with the state.
Resorts World's planned $4 billion expansion for a casino and entertainment complex, which could create substantial union construction employment, permanent jobs, and opportunities for local and minority contractors, is also at risk due to the tax dispute. The letter's signatories included state Sens. Leroy Comrie and James Sanders; Assembly members Alicia Hyndman, Stacey Pheffer Amato and Kahleel Andersson; and City Council members Nantasha Williams, Ty Hankerson and Selvena Brooks-Powers.