Suffolk OTB won't bid for full casino license for Jake's 58 in Islandia
A packed parking lot outside Jake's 58 in Islandia on Sept. 9, 2020. Credit: James Carbone
Suffolk OTB does not plan to bid for one of three downstate gaming licenses that would have added a Las Vegas-style casino at Jake's 58 in Islandia, OTB president and chief executive Phil Boyle told Newsday on Friday.
Acquiring the license and building the casino would have cost Suffolk OTB at least $1 billion — far too much for the agency despite the enormous success of Jake's 58, which includes 1,000 video lottery terminals, Boyle said.
“We’re not going to pursue that," he said in a telephone interview. “Being a public benefit corporation, our profits go to the schools and New York State Education Department and Suffolk County … We think that the half-billion dollars is too much," Boyle added of the license fee.
State officials are expected later this year to award three licenses in the metropolitan region for traditional casinos, with live dealers and croupiers, instead of video terminals like the ones at Jake's 58.
Suffolk County Regional Off-Track Betting Corporation officials had said as recently as January 2022 that they planned to switch Jake's 58 from VLTs to live gaming tables, a move that would have required a state license. That was before state officials had outlined fees and requirements for the three new downstate licenses that will be available.
Each license is expected to cost $500 million or more, with an additional mandatory minimum expense of $500 million to build the facility, according to state officials.
Boyle said Suffolk OTB officials concluded that the competition for licenses would result in a bidding war that would drive up the costs of both licenses and construction.
“You’re really talking about a billion-dollar proposition there,” he said.
Boyle said OTB would instead continue developing plans for a $200 million Jake's 58 expansion that would include 1,000 more VLTs, in addition to restaurants, pubs, conference rooms and a pool for hotel guests. That project is expected to be completed in about two years.
Jake's 58 generated $366.9 million in gross revenue last month, of which 93%, or $342.8 million, was won by players, according to online state Gaming Commission data. Suffolk OTB contributed $10.4 million of its $23 million earnings to the state education fund, gaming commission records show.
More than a half-dozen gaming and entertainment entities have shown interest in applying for the downstate casino licenses, including one in Nassau County.
Casino and resort giant Las Vegas Sands announced last month it would apply for a casino license as part of a $4 billion plan to redevelop the Nassau Coliseum site in Uniondale. The project — including a hotel and entertainment venue — already has gotten pushback from some community members, and would go forward whether Sands lands the casino license or not, company officials said.
Former Gov. David A. Paterson, who is working as an adviser to the Sands group, told Newsday he wasn't aware Suffolk OTB had considered submitting a bid. He said Sands' bid would not be affected by Suffolk OTB's announcement on Friday.
“I don’t think it changes anything, really," Paterson said, while adding Suffolk wouldn't be shut out from benefits should Sands win a license.
State law requires tax revenue generated by major development to be shared with neighboring counties within a designated region, such as Long Island, Paterson said.
He added that while it was too soon to predict potential revenue, the Sands project would be "a real revenue generator" for both counties.
Other sites that are expected to become part of license bids include Coney Island in Brooklyn; Willets Point and Resorts World at Aqueduct Raceway in Queens; Times Square, Rockefeller Center and Hudson Yards in Manhattan; Hunts Point in the Bronx and Empire City Casino at Yonkers Raceway.
With James T. Madore
Suffolk OTB does not plan to bid for one of three downstate gaming licenses that would have added a Las Vegas-style casino at Jake's 58 in Islandia, OTB president and chief executive Phil Boyle told Newsday on Friday.
Acquiring the license and building the casino would have cost Suffolk OTB at least $1 billion — far too much for the agency despite the enormous success of Jake's 58, which includes 1,000 video lottery terminals, Boyle said.
“We’re not going to pursue that," he said in a telephone interview. “Being a public benefit corporation, our profits go to the schools and New York State Education Department and Suffolk County … We think that the half-billion dollars is too much," Boyle added of the license fee.
State officials are expected later this year to award three licenses in the metropolitan region for traditional casinos, with live dealers and croupiers, instead of video terminals like the ones at Jake's 58.
WHAT TO KNOW
- Suffolk OTB president Phil Boyle said Friday the agency would not apply for one of three downstate licenses for a Las Vegas-style casino with live dealers.
- Boyle said the OTB couldn't afford the project's cost — $1 billion or more, including $500 million for the license and the same amount for construction.
- Jake's 58 casino-hotel in Islandia is set for a $200 million expansion, including 1,000 additional video lottery terminals, restaurants, pubs, conference rooms and a pool.
Suffolk County Regional Off-Track Betting Corporation officials had said as recently as January 2022 that they planned to switch Jake's 58 from VLTs to live gaming tables, a move that would have required a state license. That was before state officials had outlined fees and requirements for the three new downstate licenses that will be available.
Each license is expected to cost $500 million or more, with an additional mandatory minimum expense of $500 million to build the facility, according to state officials.
Boyle said Suffolk OTB officials concluded that the competition for licenses would result in a bidding war that would drive up the costs of both licenses and construction.
“You’re really talking about a billion-dollar proposition there,” he said.
Boyle said OTB would instead continue developing plans for a $200 million Jake's 58 expansion that would include 1,000 more VLTs, in addition to restaurants, pubs, conference rooms and a pool for hotel guests. That project is expected to be completed in about two years.
Jake's 58 generated $366.9 million in gross revenue last month, of which 93%, or $342.8 million, was won by players, according to online state Gaming Commission data. Suffolk OTB contributed $10.4 million of its $23 million earnings to the state education fund, gaming commission records show.
More than a half-dozen gaming and entertainment entities have shown interest in applying for the downstate casino licenses, including one in Nassau County.
Casino and resort giant Las Vegas Sands announced last month it would apply for a casino license as part of a $4 billion plan to redevelop the Nassau Coliseum site in Uniondale. The project — including a hotel and entertainment venue — already has gotten pushback from some community members, and would go forward whether Sands lands the casino license or not, company officials said.
Former Gov. David A. Paterson, who is working as an adviser to the Sands group, told Newsday he wasn't aware Suffolk OTB had considered submitting a bid. He said Sands' bid would not be affected by Suffolk OTB's announcement on Friday.
“I don’t think it changes anything, really," Paterson said, while adding Suffolk wouldn't be shut out from benefits should Sands win a license.
State law requires tax revenue generated by major development to be shared with neighboring counties within a designated region, such as Long Island, Paterson said.
He added that while it was too soon to predict potential revenue, the Sands project would be "a real revenue generator" for both counties.
Other sites that are expected to become part of license bids include Coney Island in Brooklyn; Willets Point and Resorts World at Aqueduct Raceway in Queens; Times Square, Rockefeller Center and Hudson Yards in Manhattan; Hunts Point in the Bronx and Empire City Casino at Yonkers Raceway.
With James T. Madore
Carl MacGowan is a Long Island native who covers Brookhaven Town after having previously covered Smithtown, Suffolk County courts and numerous spot news and feature stories over his 20-plus year career at Newsday.
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