It is improbable that Vornado Realty will pursue a permit for a casino in New York.
Vornado Realty Trust, which is listed on the New York Stock Exchange under the ticker symbol VNO, is a major real estate investment trust that is not expected to pursue a casino license in New York City.
Vornado has decided not to pursue a casino license in New York City, specifically at the Hotel Pennsylvania. (Image: Untapped New York)
During the REIT’s third-quarter earnings conference call today, Chairman and CEO Steve Roth stated that the company is considering a site near Madison Square Garden and Penn Station as a potential location for a casino hotel. This news comes approximately 10 months after initial reports speculated on Vornado’s interest in the area.
Roth stated in response to a question from analyst Steve Sakwa of Evercore ISI that it is very probable that we will not continue to seek the casino license.
Vornado, a prominent player in the commercial real estate market in the city, may consider the Hotel Pennsylvania’s current location as a potential location for a casino hotel. The hotel was recently torn down as part of a major redevelopment project for the Penn Station area. The company is expected to concentrate on finding tenants for the space for other commercial uses.
Vornado becomes the first major player to withdraw from the competition for a New York casino.
Currently, Vornado is the initial major company to withdraw from the competitive and expensive process of bidding for a casino permit in the New York City area. Other prominent companies have already expressed interest in this opportunity, making it a highly competitive and potentially time-consuming endeavor.
Roth did not provide specific reasons for why Vornado is giving up on their bid for a New York casino. However, the current economic conditions are not favorable for major new commercial real estate developments. With high interest rates, many borrowers and lenders in the commercial real estate industry are hesitant to pursue new projects.
Furthermore, Vornado did not announce a collaborator for the project, although there were speculations that the REIT might join forces with billionaire Neil Gary Bluhm. Bluhm is a co-owner of Midwest Gaming & Entertainment and a co-founder of Rush Street Gaming, a company based in Illinois that manages two casinos in the Chicago area and also has locations in Philadelphia and Pittsburgh.
Other REITs in New York are still involved in the casino race. One example is SL Green, which is collaborating with Caesars Entertainment for a gaming proposal in Times Square. Similarly, Related Cos. has partnered with Wynn Resorts to bring a casino hotel to a different area of Manhattan.
The competition for casinos in New York is far from being resolved.
Although Vornado is no longer in the running for a casino in downstate New York, the competition for the three available licenses is still ongoing. Certain experts predict that the state’s regulators will not choose the winning bidders until 2025, diminishing any expectations for an announcement in 2024.
Adding more excitement to the situation in the fourth-largest state is the possibility that MGM Resorts International and Resorts World, who run two slots-only establishments in the New York City region, may not be guaranteed to receive two of the three available licenses due to a scandal and federal probe involving a former executive.
Recent rumors indicate that Las Vegas Sands and Wynn Resorts are top contenders for obtaining casino permits in New York.
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