N.Y.C. Casino Bids Promise an Economic Boom. The Reality Might Differ.

Resorts World has promised up to $4 billion in annual revenue from a casino near Kennedy International Airport. Hard Rock Hotel & Casino has pledged revenues of $3.9 billion and 6,000 permanent jobs from a casino in Queens. And Bally’s has said it would spend $4 billion on a casino resort in the Bronx and pay $370 million in taxes every year.

The three contenders vying for one of up to three licenses to open a Las Vegas-style casino in New York City have made eye-popping claims about the potential economic impact of their proposed gambling houses.

Even in the $115 billion casino industry, the projections by each operator stand out. Meeting or nearly meeting their revenue estimates would make any of them the highest-grossing commercial casino nationwide, outside Nevada and Mississippi. And the promises of major investments and financial rewards have enticed elected officials and won over some residents who believe the casinos will be economic stimulants, job creators and major tourist destinations.

But time and again at new casinos across the country, including ones that have opened recently elsewhere in New York, reality has not matched the initial forecasts, especially in urban areas. While substantial, revenues have missed targets and have been fleeting, with tax payments sliding year after year.

Experts and researchers who have studied casinos describe their impact as far from a potent economic jolt. It is more like a reshuffling. The casinos absorb jobs from nearby companies, shift consumer spending away from other establishments and contribute taxes that would otherwise have been paid by other businesses.

“They’re dressed up as if they’re generating revenue that is new to the economy when it simply is not,” said Jonathan Krutz, an emeritus professor at Boise State University’s College of Business and Economics who has studied casinos for decades. “Their target audience is then not going to be spending that money buying a used car or a dishwasher or a meal in a restaurant.”

When casinos first rose in the Las Vegas desert and later on the Atlantic City boardwalk in the mid-20th century, they became tourism magnets and fueled an employment boom that extended to other local businesses. But today, the novelty of flashing slot machines, blackjack tables and dazzling casino floors has faded.

Casinos are in almost every state, with new ones popping up all the time that cannibalize one another’s business and rely on loyal gamblers from their neighborhoods.

They are also facing emerging threats, mainly the multibillion-dollar mobile sports betting and online gambling industry that has attracted young players who tend to skip brick-and-mortar casinos.

Doug Walker, an economics professor at the College of Charleston in South Carolina, said that with New York City’s high population density and high personal incomes, a casino would undoubtedly bring in sizable revenues. But it would otherwise operate like most others across the country, depending on a local customer base and attracting few out-of-town bettors.

“A development of $5 billion will be big for any area, but in terms of the big picture and the city overall, you probably wouldn’t notice much,” Professor Walker said. “In an urban environment, it’s like any other industry.”

In recent years, large casinos have opened in other major metropolitan areas, like Chicago and Boston. But those casinos have not met their initial goals.

The Encore Boston Harbor projected $800 million in annual gambling revenues. But after six years it has yet to reach that amount, and revenues have declined in the past three years. The Bally’s Chicago casino made $125 million in 2024 — half of what the city had forecast.

In a paper published this month, researchers who examined casinos in urban settings found that they had created small pockets of economic activity. They often hire hundreds or thousands of people and fuel a rise in employment in the blocks near them, forming an entertainment district of restaurants, bars and event venues.

But beyond that area, there were job losses that canceled out the gains, the researchers found.

Ari Anisfeld, an author of the report who is an assistant professor of economics at the Sam M. Walton College of Business at the University of Arkansas, said it was “a bit disappointing if you are trying help create job opportunities in an area.”

Since opening, their performances have been mixed. Many have become the top employers in their counties, but just one site has surpassed its projected annual gambling revenue. Half of them have had declining incomes over the past three years, and the county that hosts Resorts World Catskills, in Monticello, N.Y., recently approved up to $585 million in bonds to help that struggling casino.

Soon, the upstate casinos could face competition from major operators in the state’s most populated area.

With as many as three licenses up for grabs, the remaining bidders could each be awarded one as soon as December, though it is not guaranteed.

Two sites would be built from scratch — Bally’s in the Bronx, next to the company’s public golf course at Ferry Point, and the Hard Rock, on the parking lots of Citi Field, the ballpark of the New York Mets. The third, the Resorts World bid, already exists as a so-called racino, a racetrack with slot machines, and would be expanded upon.

Altogether, the three properties have pledged to create more than 50,000 jobs, most of them temporary construction jobs. About a third would be permanent positions after they open. Bally’s said its median wage would be $62,400 a year, slightly below the median income for New York City workers.

A 2021 report on the casino industry in New York commissioned by the state’s Gaming Commission estimated that three casinos in the city could together generate up to $4.4 billion in annual gambling revenue. The contenders themselves are more bullish.

Resorts World, which is the top grossing video gambling house in the country with about $1 billion a year in revenue, said it could quadruple that amount if it were the only casino awarded a license. If all three bidders were allowed to open, Resorts World estimated that it could make $2.7 billion a year from its New York City casino.

In its application, Bally’s Bronx estimated it could make more than $1 billion in gambling revenue, and Hard Rock said it could generate $3.9 billion in its third year of operations.

Most casinos generate their income from slot machines, where players can make or lose money in just seconds, and these casinos would be no different. They would have thousands of slots and far fewer dealer tables for blackjack and poker.

The licenses handed out by the Gaming Commission will last between 10 and 30 years. Over that period, casinos will have to confront an aging customer base and the rising popularity of other forms of gambling, like betting on sporting events, researchers said. Sports bettors in New York wagered nearly $24 billion on their phones in the last fiscal year.

One expert, Kahlil Philander, said the biggest threat to casinos over the next 30 years would not be the potential for new casinos in the New York City area but “the confluence of demographic and technological preferences changing.”

Mr. Philander, an assistant professor at Washington State University’s School of Hospitality Business Management, used as an example the lottery, which “used to be very popular with high-income areas and middle-income people.” Those same people still play, he said, but they are getting much older.

All three bidders predicated that they would each contribute hundreds of millions of dollars every year in taxes. Up front, the state would receive a one-time bonus: Each winner will pay a fee of at least $500 million.

Ms. Dadayan of the Urban Institute said states typically see a boost in tax revenue from casinos as the initial excitement draws visitors. But it is not sustained. Since 2019, taxes paid by New York casinos and racinos have declined by more than 9 percent when adjusted for inflation, she said.

Still, in small municipalities, that revenue can be a boon. The four commercial casinos elsewhere in New York State contribute 5 percent of their annual taxes to their host towns. In the rural town of Tyre, between Rochester and Syracuse, del Lago Resort & Casino has provided more than $2 million a year in local taxes. It was enough for Tyre, population 1,015, to eliminate its town tax rate.

“It has been a tremendous benefit to the town, economically speaking,” said Elizabeth L. Partee, the town supervisor.