New York Casino Crisis: 72% Tax Rate Threatens $7.5 Billion Investment

The ambitious vision for New York City's first fully-fledged casino resorts is facing a major financial roadblock. In Queens, a heated dispute has emerged between Genting’s Resorts World and state regulators over a tax bill that could become the highest in the United States. With a combined rate reaching 72 percent on slot revenues, the viability of a massive 7.5 billion USD development is now in question. While Resorts World is already a significant contributor to the state's coffers, this new regulatory interpretation could derail the project entirely.

The core of the conflict lies in how subsidies for the horse racing industry are calculated. Genting entered the bidding process for one of the three available full-scale licenses under the impression that their 56 percent tax rate included these subsidies. However, the New York State Gaming Commission recently clarified that a 16 percent levy for horse racing is an additional requirement. This stance has sparked a political backlash, with lawmakers urging Governor Kathy Hochul to intervene and protect the economic future of Southeast Queens.

Numbers and facts

The scale of the investment is staggering. Resorts World plans to spend 7.5 billion USD to transform its current site near JFK airport into the largest integrated resort in the U.S. by 2030. The 73-acre site is set to feature 2,000 hotel rooms, a vast casino floor, and a community park, creating approximately 10,000 jobs. To put the 72 percent rate in perspective, neighboring New Jersey taxes retail casinos at 9.25 percent, while Michigan stands at 19 percent and Ohio at 33 percent. The uncertainty also casts a shadow over other license winners, including Bally’s in the Bronx and Hard Rock’s Metropolitan Park.

"This uncertainty now threatens not simply one company, but billions of dollars in private investment, thousands of jobs, local businesses, and the communities we represent." - Gregory Meeks, Chair of the Queens Democratic Party

Background

Resorts World NYC has operated as a slots-only facility for years before securing a full casino license on December 15 of last year. This new license allows for live table games like blackjack and baccarat, but the excitement was short-lived as the tax dispute intensified. The Gaming Commission, operating under the governor's office, insists that the law has never included racing support payments within the base tax rate. According to industry reports, these payments amount to at least 150 million USD annually. Over the next four years, Resorts World could face over 500 million USD in extra costs, as they must shoulder the full burden until other city casinos open in mid-2030.

State Senator Joe Addabbo, a prominent supporter of regulated gaming, has called the rate excessively high. He argues that the governor needs to resolve the issue to ensure the promised economic benefits are realized. While the governor’s office has defended the current legal framework, there are signs of potential compromise. New legislation has been proposed that would allow the Gaming Commission to make these racing payments directly from the state’s commercial gaming fund, which typically supports education and transit.

Why it matters for German players

German players might see this as a local U.S. issue, but it reflects a global trend of increasing fiscal pressure on regulated gambling. In Germany, the 2021 Interstate Treaty on Gambling (GlüStV 2021) imposes a 5.3 percent tax on every slot spin, which often forces legal operators to lower their Return to Player (RTP) percentages. Despite these pressures, players in Germany are advised to stay within the legal market. Only GGL-licensed casinos offer the protection of the LUGAS system, with its 1,000 EUR monthly deposit limit and the 1 EUR stake limit per spin, ensuring a safer environment than unregulated offshore sites.

What it means for GGL-licensed casinos

Casinos licensed by the German GGL face similar economic challenges to those in New York. High taxes and strict social responsibility requirements make it difficult to compete with illegal MGA or Curacao operators. The Resorts World case illustrates that regulatory stability is crucial for long-term investment. For German licensees, it emphasizes the need for transparent dialogue with authorities to ensure that the legal market remains attractive for both operators and players while maintaining high standards of player protection through systems like OASIS.