They hosted the largest indoor gathering in the state since the start of the pandemic with some 15,000 fans in the stands.
About 90% of fans in attendance were vaccinated, which meant they did not have to wear their masks.
Non-vaccinated fans had to show proof of a recent negative COVID test.
Games three and four in Atlanta will only have a crowd of about 7,500 fans, even with 15,000 in NYC Sunday night.
MSG is still not at capacity, which is 20,000, but Knicks owner James Dolan says they are leading the way showing everyone New York is back.
The game was a heartbreaker for Knicks fans. In the final seconds, Atlanta's Trae Young silenced the Garden with a game-winning shot.
He had 32 points in his playoff debut.
New York dropped game 1, 107-105.
This game follows the largest crowd in over a year at the Barclays Center as the Brooklyn Nets say 14,391 fans filled the stands Saturday night, 93% of the spectators were fully vaccinated.
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