DraftKings Rejects Sands’ Nassau Coliseum Casino Proposal

Boston-based DraftKings, a mobile sportsbook and iGaming goliath, has exited talks with the Las Vegas Sands about taking over its bid at the Nassau Coliseum to become one of the several companies vying for New York’s three downstate casino licenses.

DraftKings Bids Adieu

The Las Vegas Sands is one of what were originally 11 bidders for one of three coveted downstate casino licenses in New York. However, cost overruns have seen the original estimated cost of $4 billion to restore the Nassau Coliseum nearly double to $7.6 billion to become a casino resort destination if it were selected as one of the three pricey projects to be awarded a casino license by the state.

The cost of the project, in conjunction with the fierce competition in search of a license, has caused the iconic gaming company to retreat from its position and instead go in search of a company that may want to pick up the mantle and assume the lead role. Unfortunately, for them, DraftKings has recently walked away from that possibility.

“There is no deal with between the companies, nor will there be,” said an anonymous source close to the negotiations. “DraftKings will not be taking over the Sands bid.”

Although financial details were not disclosed, the Las Vegas Sands has invested $241 million for a lease to take control of the site. All bids must be in by June 27th to be considered as one of the three companies to obtain a license. That decision is expected to be announced in December.

Sands Says No Más

As far back as October, it was rumored that the Las Vegas Sands was having second thoughts about its multi-billion-dollar commitment to renovating the Nassau Coliseum, and it began during a third-quarter earnings call.

“I’ve always been the biggest advocate for New York and other jurisdictions,” he said at the time. “The only concern I have these days is the ongoing strength of online gambling. We can’t ignore what’s happening in New Jersey, in Pennsylvania, and in Michigan.”

The prospect of New York becoming the eighth state to join New Jersey, Delaware, West Virginia, Pennsylvania, Michigan, Connecticut, and Rhode Island as the nation’s only iGaming states sent tremors through the Sands’ C-suite offices.

The possibility of iGaming coming to New York has sparked fears of cannibalization by land-based casino businesses, and it is not without precedent, as several states have rejected the more lucrative form of online gambling because of those concerns.

Land-based casinos employ hundreds, if not thousands, of people and pay significant taxes to the states in which they reside. They also have powerful lobbyists behind them, and lawmakers have been reluctant to vote against the wishes of their donors.

However, New York has experienced tremendous financial results since legalizing and launching mobile sports betting at a 51% tax, which has seen over $2 billion flow into the state’s tax coffers since the launch in January 2022. It is the most successful mobile sports betting market in the nation, and it just may expand its gaming tentacles to online casino gambling.