Jake’s 58 $210M Expansion to Eradicate Islandia Village Property Taxes

Jake’s 58 commenced construction today on the Long Island casino’s $210 million initiative that will increase the number of video lottery terminals (VLTs) to 2,000. Once finalized and the slot-like machines are in operation, local officials indicate that residents will no longer be required to pay property taxes to Islandia Village.

Suffolk Regional Off-Track Betting Corporation (Suffolk OTB) revealed last summer its most significant expansion of the Long Island casino since it debuted in May 2017. In addition to doubling the number of VLT positions, the $210 million plan encompasses the renovation of all 210 hotel guestrooms. The initiative will also introduce several new dining and drinking establishments to the property, an indoor swimming pool, a multilevel parking structure, and a sound barrier to diminish noise in a neighboring area.

Those homeowners will also soon gain from the project with lowered taxes. The Village of Islandia intends to abolish property taxes after the additional casino floor space is operational. This change will save homeowners an estimated $400 to $500 annually, as reported by Newsday.

"Mayor [Allan] Dorman and the Village Board negotiated an extraordinary deal on behalf of their constituents,” said Suffolk OTB President Phil Boyle, who was formerly a New York state senator and assemblymember. “As the casino expands and revenue increases, Islandia residents will continue to benefit.”

The elimination of the property tax originates from Islandia negotiating a higher local share payment from Suffolk OTB when the company proposed plans to extend the casino’s footprint. Suffolk agreed to allocate $4. 25 million to Islandia each year, which is an increase of 89% from the current annual payment of $2. 25 million.

Islandia is a village spanning 2. 2 square miles with a population of approximately 3,500 residents.

Upcoming Competition

Jake’s 58 is among 11 VLT casinos that provide gaming machines for the state. The casinos receive around 45. 7% of the gross gaming revenue earned from the terminals and electronic table games, while 44. 3% is allocated to state education, and the remaining 10% is designated for gaming vendors and the management of the video lottery central system.

Jake’s is situated on Long Island approximately 30 miles east of the location where Las Vegas Sands aims to establish an integrated resort casino featuring Las Vegas-style slot machines, live dealer table games, and sports betting. The Sands proposal at the Nassau Coliseum site is one of at least 10 projects vying for one of the three downstate casino licenses that the state will award next year. Each of the selected developers will be required to pay a one-time fee of $500 million.

Boyle has consistently stated that Suffolk would not pursue a downstate casino license to install slots, dealers, and a sportsbook at Jake’s. Instead, the company is concentrating on enhancing its product and further increasing customer loyalty.

“I think wherever those casinos are located, we are going to be able to compete very well,” Boyle told the New York Post. “We have a very loyal following.”

Construction Timeline

Boyle disclosed that the $210 million expansion and renovation of Jake’s 58 is expected to be finalized sometime next year. As the New York Gaming Facility Location Board indicated last month, the downstate licensing process will probably extend into late 2025, which means that Jake’s will embark on its next chapter without commercial casinos for at least a year, and likely longer, since the construction of the integrated resorts will take several months.

Over the past year, Jake’s 58 has reported gross gaming revenue (GGR) of approximately $277. 3 million. Boyle anticipates a 42% increase in gaming win during the first full year after the completion of the expansion.