The NYC Casino race just took a turn.
In a surprising turn of events, MGM Yonkers, a subsidiary of MGM Resorts International, has announced the withdrawal of its application for a commercial casino license in Yonkers, New York.
The company had submitted a $2.3 billion proposal to transform its historic Empire City Casino in Yonkers into a full-scale commercial casino and entertainment destination.
This decision comes after a shift in the competitive and economic landscape, which has impacted the expected returns from their ambitious $2.3 billion project to expand and renovate the Empire City Casino.
There are now three remaining NYC casino bidders competing for up to three available licenses, with the selections expected to be announced by year's end.
Crowded Competitive Landscape for NYC Casino Licenses
One of the primary factors influencing MGM's decision is the unexpectedly crowded competitive landscape.
The race for New York's three casino licenses in the downstate area is now down to three:
- Metropolitan Park near Citi Field, backed by Steve Cohen and Hard Rock
- Bally’s Bronx, located at the old Trump Golf Links site
- Resorts World New York City in Queens
Initially, MGM anticipated a less saturated market. However, with four proposals now clustered in a small geographic area, the outlook for achieving the forecasted returns has dimmed.
This heightened competition posed a significant challenge to MGM's projections and was a critical determinant in their decision-making process.
License Duration and Economic Viability
Another major concern for MGM was the duration of the casino license.
The original plan was formulated on the assumption of securing a 30-year commercial casino license. Recent guidance from New York State, however, suggested that MGM would likely be granted only a 15-year license.
This reduction in license length has serious implications for the project's financial viability. "Taken together, these events result in a proposition that no longer aligns with our commitment to capital stewardship, nor to that of our real estate partner in Yonkers, VICI," MGM Resorts stated.
Impacts and Future Prospects
Before the withdrawal, MGM had gained unanimous approval from the Community Advisory Council.
Their plans included a significant expansion featuring 183 live dealer games, a 5,000-seat entertainment venue, new restaurants, and a BetMGM Sportsbook. The sudden reevaluation has left local officials shocked and concerned about potential political or economic influences behind the decision.
With MGM stepping back, three other NYC Casino contenders remain in the race for the coveted downstate New York casino licenses. This development marks a pivotal moment in the ongoing casino licensing process.
Continued Commitment to Yonkers
Despite withdrawing their application, MGM remains committed to Yonkers and New York State.
Since acquiring Empire City Casino in 2019, MGM has made significant contributions to the state, generating over $5 billion for New York State education, with $1.6 billion contributed under their ownership. "We remain committed to operating the property in its current format and believe it will continue to enjoy success serving customers in Yonkers and the surrounding communities," reassured MGM in their statement.
As MGM reassesses its strategy, the focus shifts to how they will leverage their existing operations to sustain their presence and impact in the region.
The evolving scenario is one to watch as it unfolds, reshaping the future of gaming in New York State.
