After receiving approval from the New York Gaming Commission for the $850 million sale of its Empire City Casino and Yonkers Raceway property in January, the Rooney family could be pocketing an additional $50 million if the new owner, MGM Resorts International (NYSE: MGM), is able to obtain a casino license.
The deal that gives MGM Resorts a foothold in the high-density New York City region, was finalized on January 29, 2019, after announcing in May that together with its real-estate investment trust (REIT), MGM Growth Properties LLC (NYSE: MGP), it had agreed to the terms for the purchase.
Over the last three years, the Las Vegas-based global hospitality and entertainment company has established a meaningful presence in the Northeast with MGM National Harbor in Maryland, Borgata Hotel Casino & Spa in Atlantic City and MGM Springfield in Western Massachusetts, and now hopes to leverage its platform to maximize value, starting with a full-scale gaming license.
According to lohud.com, at the state capitol on Tuesday, Empire City’s new Chief Executive Officer, Uri Clinton, said…
“One of the ways to do that is to allow us to have access to live table games, as opposed to electronic table games, Las Vegas-style slot machines and sports betting so that we can stop some of the revenue that’s leaving downstate and going out of state.”
That, however, is contingent upon Empire City’s receiving approval to host live table games before the end of 2022.
Effective from March 1, 2016, state law puts a seven-year moratorium on casino expansion in New York prohibiting full-scale gaming within the New York City metropolitan area until 2023. The law was reportedly intended to afford upstate casinos a chance to gain footing in the market before the NYC area could join and add competition.
MGM, which announced in December, that Clinton would serve as president and chief operating officer for the Yonkers venue, reportedly met with lawmakers in the state’s capital city of Albany on Tuesday in hopes of convincing them to allow the company to have a casino license prior to the moratorium’s end.
The property in New York that had been in the Rooney family since 1972 is located at the intersection of Central Park Avenue and Yonkers Avenue, only 15 miles from Times Square in Manhattan. The 97-acre property covers over 150,000 square feet of floor space and features more than 5,000 video lottery terminals, electronic table games and several dining options and as the largest private employer in the city, employs some 1,200 people.
It cannot, however, offer live table games and other amenities, and pledges to add those things, but will first have to convince lawmakers and Governor Andrew Cuomo, to drop the ban on new casinos.
Clinton reportedly told the USA Today Network’s Albany Bureau, “We’re just kind of educating people on the vision we have for the property,” according to lohud.com.
“The reality of it is we think there is a real opportunity to allow us to start moving forward. So we’ve been talking to community groups; we’ve been engaging with the City Council; we’ve been engaging with local taxpayers’ associations and local stakeholders who are representing those constituencies here in Albany,” explained Clinton.
According to the news agency, Sen. Shelley Mayer, D-Yonkers, said she supports the push by Empire City, saying that if MGM could expand, the city would benefit. She also reportedly said that she would want the city’s schools to receive a dedicated revenue stream from the Westchester County gambling venue.
Mayer reportedly said, “I’ve always been supportive of full gaming for Yonkers. It’s a source of jobs; it’s a source of revenue.”
Sports betting incentive:
The move by MGM appears to be somewhat driven by the overturning of the Professional and Amateur Sports Protection Act (PASPA) in May last year, and its desire to get in on a potential sports betting market, something that New York and many other states around the country are rushing to do.