Betting Big on Casinos in Urban Markets
In a creative gamble to drive more economic development, many big cities are looking to add casinos to their downtown zip codes. Large metropolitan areas like New York, Chicago, Baltimore, and Richmond, Virginia, are all eyeing entertainment complexes that prominently feature gaming venues in parts of the city not typically known for the blinking lights and ringing sounds of slot machines.
Aside from the obvious economic windfall, what are the benefits of bringing these mega complexes to downtown neighborhoods where real estate is historically at a high premium?
Go Big or Go Home
The gaming industry is one of the fastest growing in the world, according to a study recently published by Nature magazine. The research looked at the proliferation of casinos cropping up in the Northeastern US, including urban gaming venues in major metropolitan areas. Since the early 2000s, widespread changes to state gambling regulations have opened the door to these new revenue streams and economic growth.
In New York City, three new state gaming licenses have real estate developers going all in. The big-name global gambling corporations such as Caesars, Hard Rock, and Las Vegas Sands view Manhattan as the biggest prize of all, raising the stakes on an all-out bidding war to bring a Las Vegas-style casino to the Big Apple. Some estimates say a gaming venue in Manhattan would net $1 billion in revenue every year.
A proposed Times Square gaming development is in competition with another potential site at the underutilized Hudson Yards complex, while casino bids are also underway in the boroughs of Brooklyn and Queens, giving New York an edge to becoming the largest gaming capital outside of Las Vegas, a situation nearby Atlantic City is eyeing with growing consternation.
What’s the Big Deal?
Casinos can be controversial proposals, especially in complex metropolitan landscapes where the political stakes are high. Mutual collaboration between city and state governments and casino corporations is critical to ensure the community’s interests are best served.
For casinos to truly be successful regional economic drivers, they must attract visitors from outside the city. A key marker of success is how much the surrounding neighborhoods will benefit from the integration of a gaming venue to inject revenue into the community.
Take the Bally’s Chicago deal: The project will revitalize a well-known city landmark: the former Chicago Tribune publishing plant located on a busy corridor just north of the city’s downtown. The $1.7 billion entertainment district proposal encompasses a 500-room hotel tower, 3,000-seat theater, outdoor music venue, six restaurants, a food hall and more. Chicago Mayor Lori Lightfoot has positioned the high-profile project as a viable job creator that will rejuvenate the area and provide economic benefits to the city.
Another intriguing aspect of this headline-making development? Bally’s Chicago proposal is centered on ambitious plans for equitable opportunities for building multigenerational wealth, including a commitment to 60% minority hiring for its more than 3,000 jobs and an innovative crowdfunding initiative that allows Chicagoans to buy fractional ownership of the new facility for an investment as low as $250.
In Baltimore, the city’s recently released economic development plan aims to better incorporate equity than past initiatives, including in the hospitality and tourism sectors. It specifically mentions continued work to build out the Horseshoe Casino entertainment corridor, which was built in 2014, and the use of gaming revenue to improve neighborhoods near the casino. Some casino tax revenue has funded community grants for nutrition education, housing, environment, and youth initiatives.
Time to Cash In
Casinos are providing major US markets with a unique opportunity to invest in their communities, create jobs, and drive development — often in areas that need it most.
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