The NYC Casino race has taken a significant turn.
In an unexpected announcement, MGM Yonkers, a part of MGM Resorts International, has decided to withdraw its application for a commercial casino license in Yonkers, New York.
The firm had proposed a substantial $2.3 billion plan to convert its historic Empire City Casino into a comprehensive commercial casino and entertainment hub.
This move comes in light of recent changes in the competitive and economic environment, which have influenced the anticipated returns from their ambitious $2.3 billion initiative to expand and renovate the Empire City Casino.
Currently, there are three contenders left bidding for up to three available casino licenses, with announcements expected by the end of this year.
Highly Competitive Environment for NYC Casino Licenses
One of the key reasons behind MGM’s withdrawal is the unexpectedly competitive environment.
The race for the three casino licenses in the downstate New York region has now narrowed down to:
- Metropolitan Park near Citi Field, supported by Steve Cohen and Hard Rock
- Bally’s Bronx, located at the former Trump Golf Links site
- Resorts World New York City in Queens
MGM initially expected a less congested market but now faces a saturated area with four proposals, diminishing the outlook for projected returns.
License Duration and Economic Concerns
A significant issue for MGM was the length of the casino license.
The initial plan was based on acquiring a 30-year commercial casino license. However, recent guidelines from New York State indicated that MGM would likely receive only a 15-year license.
This reduction in duration has serious financial implications for the project. MGM Resorts remarked, “Collectively, these developments lead to a proposal that no longer aligns with our commitment to capital stewardship, nor that of our real estate partner in Yonkers, VICI.”
Impacts and Future Outlook
Prior to withdrawing, MGM had received unanimous approval from the Community Advisory Council.
Their plans included a substantial expansion featuring 183 live dealer games, a 5,000-seat entertainment venue, new dining options, and a BetMGM Sportsbook. The abrupt re-evaluation has left local officials surprised and worried about potential political or economic motivations behind the decision.
Ongoing Commitment to Yonkers
Despite pulling out of the race, MGM remains committed to Yonkers and New York State.
Since acquiring Empire City Casino in 2019, MGM has contributed significantly to the state, generating over $5 billion for New York State education, with $1.6 billion contributed during their ownership. “We continue to be dedicated to operating the property in its current format and believe it will maintain its success serving customers in Yonkers and neighboring communities,” MGM affirmed in their statement.
As MGM reevaluates its strategy, the focus will be on how to leverage existing operations to uphold their presence and influence in the region. This evolving situation will be crucial to monitor as it shapes the future of gaming in New York State.
