Queens Democrats are pushing Gov. Kathy Hochul to block a plan that would force the Big Apple’s first full casino to pay a staggering 72% in taxes on its slot revenues.
Local lawmakers sent a sharply worded letter on Aug. 25 in defense of Resorts World New York City to Brian O’Dwyer, the chairman of the New York State Gaming Commission handpicked by the Democratic governor.
“A 72% tax rate is excessively high,” state Sen. Joe Addabbo, chairman of the Committee on Racing, Gaming and Wagering, told The Post.
“The governor’s office has to step in and resolve this issue. The Gaming Commission falls under the auspices of the governor.”
The Jamaica casino, owned by Genting, opened as a slots parlor in 2011 before it netted a state license this year to also offer live table games such as baccarat, blackjack and craps.
Resorts World officials proposed a 56% tax rate as it sought a full license — including subsidies to the horse racing industry. That’s the rate the casino is now dishing out to the Empire State.
But the seven-member Gaming Commission — which includes five Hochul appointees — argued that the 56% tax rate does not include Resorts World’s separate obligation to pay mandated revenues to support the horse racing industry.
This separate obligation would force Resorts World to remit another 16% — or 72% of its slots revenue — to the state and the subsidized racing industry.
That’s an additional $150 million a year over the 15-year contract.
The 56% tax tax rate that RW pay is already among the highest, if not highest, in the country.
New Jersey’s Atlantic City casinos, by comparison, pay a 9.25% state tax rate. Michigan’s tax rate is 19% on its Detroit casino and Ohio imposes a 33% tax rate.
The 10 lawmakers who signed the letter said the issue requires “immediate resolution” as a decision is expected by Friday.
“The uncertainty now threatens not simply one company, but billions of dollars in private investment, thousands of jobs, local businesses, and the communities we represent,” said the letter, whose signees include Rep. Gregory Meeks, also the chairman of the Queens Democratic Party.
“RWNYC should pay the 56 percent slot gaming tax rate it offered, and the racing industry should continue to receive the full support required under State law.”
The lawmakers said accountability cuts both ways.
“Applicants must be held to the financial, employment, investment, and community commitments they make to New York,” the letter stated. “At the same time, the State should administer those commitments according to the framework upon which they were offered and evaluated.”
The letter was co-signed by 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.
They expressed concern the tax dispute could hinder Resorts World’s planned $4 billion casino and entertainment expansion that would support substantial union construction employment, thousands of permanent jobs, opportunities for local and minority contractors.
But the commission stood its ground.
“The Gaming Commission determined that Resorts World would pay a 56% tax rate on slot-machine gross gaming revenue, just as Resorts World proposed to pay in seeking the license,” said commission spokesman Lee Park.
“By law, this gaming-revenue tax is separate and apart from their other required statutory obligations, which are not taxes.”
In awarding the casino license, the Gaming Commission set a 56% slot-machine gaming tax rate.
The commission said it cannot not divert casino tax receipts to any purpose other than those the law requires — paid only to states fund that benefits public education and the Metropolitan Transportation Authority.
Resorts World’s obligation to fund racing is required under a separate law and is not considered a tax, the commission claimed. Resorts World could pay it from any of its revenue sources, not just from slot machines, the commission noted.
A spokesperson for the governor, who is seeking re-election to a second full term, said the tax rates do not “and have never” included racing support payments.
“By law, tax rates do not, and have never, included racing support payments. “The State’s priority is to generate substantial tax revenue for public education and mass transit, ensure continued support for the racing industry, and deliver the investment, jobs and economic benefits Resorts World promised for Southeast Queens & New York State,” Hochul spokesperson Gordon Tepper said.
Resorts World spokesman Stefan Friedman said, “We are having constructive conversations with the state and continue to look forward to working together.”
