Bronx and Queens Line Up for Three New Casinos, Cannibalization Risk Still in Play

New York’s wager on three new casinos tests the city’s economic appetite for risk—and raises questions about who will truly profit from the surge in legalised gambling.

Among the denizens of New York’s Van Wyck Expressway, gridlock is nothing new. Soon, however, some of the traffic heading south from the Bronx-Whitestone Bridge may have less to do with airport runs and more to do with the spinning of roulette wheels. In a move likely to recalibrate the city’s entertainment axis, the State Gaming Facility Location Board announced on December 2nd its endorsement of three casino projects: Bally’s Bronx at Ferry Point, Hard Rock Metropolitan Park in Queens, and an expanded Resorts World at Aqueduct Racetrack. Collectively, these complexes represent a bet worth billions in investment, thousands of new jobs, and, inevitably, no small measure of risk.

New York City’s casino approvals mark the penultimate step in a drawn-out regulatory process that is scheduled to conclude in weeks, once the State Gaming Commission has its final say. Already the aspirants are issuing grandiose promises: glittering entertainment districts, neighbourhood revitalisations, and a veritable bonanza of tax revenue. Yet, as ever, New Yorkers have been left to ponder the sobering arithmetic beneath the ribbon-cutting rhetoric. Can the city sustain three casinos separated by little more than a short cab ride—and will their presence generate new prosperity, or merely siphon spending from elsewhere?

Placing several casinos in such close proximity is an audacious economic gamble in itself. Proponents argue that the city’s scale and tourist magnetism will buoy all three, a view echoed by Vicki Been, chair of the Location Board. Consultants, she notes, assessed the market with “very, very conservative” forecasts and still saw ample room for growth. But sceptics, like Bennett Liebman, a gaming law expert and former state regulator, question the wisdom of clustering these operations along what he dubs the “Van Wyck Casino Belt”—far from the commercial heart of Manhattan, where the richest veins of tourist and corporate dollars run thickest.

The central tension revolves around cannibalization: the possibility that New York’s shiny new casinos will not expand the market, but simply cannibalize each other’s (and existing upstate) customer base. Each of the three projects boasts a distinct amenity: Bally’s features a championship golf course; Hard Rock’s development flanks Citi Field, the Billie Jean King Tennis Center, and a future soccer stadium; Resorts World, already established, would turbocharge its amenities. Each group maintains that differentiated offerings and location will conjure distinct, loyal crowds. Reality may prove less obliging.

Should the board’s confidence prove misplaced, the effects on city finances and nearby neighbourhoods may be puny rather than potent. The city’s budget narratives, currently strained as pandemic-era supports wane, anticipate a new river of tax receipts and union jobs flowing from these facilities. Temporary construction employment is certain, and short-term boosts to local hospitality likelier still. But the longer-term impact depends on casinos’ ability to draw “new” money—tourists unlikely to otherwise visit—to the city, rather than coddling locals with a penchant for slots.

There is also the awkward matter of opportunity cost. Each site, notably those in the Bronx and outer Queens, occupies land that could have played host to non-gambling-based developments—housing, technology parks, even run-of-the-mill commerce. Development concentrated in entertainment enclaves often displaces existing businesses or reshapes neighbourhood character. If projections undershoot, New York may be left with cavernous halls and far fewer jobs than advertised, replicating the fate of Atlantic City’s many white elephants.

The city’s politics are, unsurprisingly, animated. Local officials, quick to trumpet job creation, have been joined by organized labor in pushing for casinos as hubs of unionized employment. Yet, some community boards mutter about congestion, gentrification, and a social cost that is harder to quantify: greater exposure to gambling addiction. New York’s existing responsible-gaming resources are modest. Whether oversight keeps pace with proliferation is an open question.

New York is hardly alone in seeing casinos as an elixir for fiscal woes. Across the country, states from Massachusetts to Illinois have chased gaming dollars, often with mixed results. Nationally, new casinos frequently fail to meet projected revenues once regional competition catches up and market saturation sets in. Atlantic City’s long, slow slide reminds us that proximity to New York’s population is no talisman against stagnation. Indeed, the question raised by analysts is not whether New Yorkers want casinos, but whether a marginal dollar spent at a local slot machine is one foregone at a Broadway theatre, a Madison Avenue shop, or a SoHo gallery.

The perils of a saturated market

None of this is to say the experiment will inevitably flop. Legalised gambling now extends far beyond dour gaming floors: the glitzy complexes on offer combine music venues, hotels, restaurants, and shopping, gambling as much on entertainment as on vice. Should one or more succeed in luring a new kind of visitor, New York’s tottering post-pandemic tourism rebound may tilt more robust. Conversely, if the effect is simply to shuffle the discretionary income of locals from one temptation to another, the experiment may look distinctly pallid.

It is precisely the scale of investment—billions in capital, years in the making—that will determine whether the city, and the state, reap a windfall or merely pocket a sliver of the receipts. Casino operators rarely go bust outright. But the state’s own revenue projections for gambling have historically portended more optimism than reality; recall the tepid returns from downstate “racinos” over the last decade.

New Yorkers themselves may be cool on casinos: a 2023 Siena College poll found city residents divided, and support lower than in suburban counties. Many still recall the mid-2000s promises of the lottery to solve school funding—a pledge seldom fulfilled in full. Scepticism has its place, especially when “economic development” is sold as a panacea.

Our own view is that the city is taking a measured risk, but hardly an inspired one. Recent years have repeatedly shown that New York can and will absorb new entrants into its teeming tapestry—ride-hailing apps, weed dispensaries, and so forth—yet often with effects more diffuse and less transformative than champions claim. If three casinos jointly energize outer-borough economies, generate actual public value, and avoid the social externalities that plague lesser markets, it will be despite the weight of national evidence, not because of it.

For now, New York is still rolling the dice. The odds of a jackpot—or a bust—rest less on neon lights than on the stolid math of markets and migration. As every seasoned gambler knows, the house rarely loses. Whether the city at large is similarly lucky remains, for now, a matter for gamblers to decide. ■