By:  Serach Nissim

New York City Mayor Eric Adams has proposed making changes to the city zoning law to allow casinos to open in the Big Apple, in alignment with the state-led process which will select up to three gaming sites to be opened in NYC.  As reported by the NY Post, currently city zoning laws make no mention of casinos which would leave gaming facilities, vying to open a casino in the five boroughs of NYC, open to litigation.  City officials say that without any changes to zoning law, casino bidders in the city would be at a disadvantage compared to the suburbs, with each potential casino site being required to undergo the cumbersome process of having individual hearings and a City Council review.

The state has approved the Gaming Commission the right to award up to three full casino licenses in the downstate region, which includes NYC, Long Island and the northern suburban counties of Westchester, Rockland and Putnam.  The city proposed to change its zoning law to allow casinos in most commercial districts and manufacturing districts, and says the casino may include a hotel and restaurant.  The proposed change does not make any restriction on size, only specifying that a casino should not be built in a residential area.  The open-ended zoning change, is meant for simplicity, being that the casino bidders will still need to be approved by the state’s extensive review under the formed 6-member Community Advisory Committee.

“As the state considers proposals for casinos downstate, it’s important that we create a level playing field for applicants within New York City so they can compete for this opportunity,” said Dan Garodnick, director of the Department of City Planning and Planning Commission chairman.  “This text amendment would avoid duplicating the state’s rigorous licensing process, which includes local representation on the CAC, while setting up a rational framework for consideration within our zoning.”

Per the Post, two of the potential casino sites, namely Steve Cohen’s proposal for a casino near the Mets Citi Field, and Bally’s proposal for a casino at Ferry Point, are both on city parkland. These proposals would require additional state legislature approving a conversion of the parkland to commercial use space.

Whichever bidders win the lucrative gaming license, they will be required to pay the state an upfront licensing fee of $500 million, for the right to open alone. Notwithstanding, a study commissioned by state gaming authorities in 2021 revealed that potential gaming revenue in NYC could reach more than $5.3 billion annually   The state Gaming Commission has not yet set the deadline for submission and approval of casino bids.  The official review is slated to begin next year, with multiple bidders already actively working on their proposals.

The city’s lax zoning change proposals indicate that it is willing to forgo its right to veto any of the bids, handing over decision making control to the state.  “Casinos have the potential to bring jobs and economic opportunities to New Yorkers, but applicants within New York City are at a disadvantage today because the city does not currently have a mechanism in our land use regulations to properly review casino siting. To ensure New York City applicants are not at a competitive disadvantage, the Department of City Planning and City Council will consider a standalone citywide zoning change that allows them to be judged within the guidelines of the state’s statutory process for considering casino license proposals,” Council Speaker Adrienne Adams wrote in October.