In upstate New York and the firm behind the 332-room Resorts World Catskills has reportedly declared that it is considering the possibility of entering voluntary bankruptcy in order to head off creditors.
According to a Wednesday report from the Poughkeepsie Journal, Empire Resorts Incorporated made the revelation via an official August 9 filing with the Securities and Exchange Commission (SEC) alongside detailing a $73.5 million operating loss for the twelve months to the end of June.
Below par performance:
The newspaper reported that the $1 billion Resorts World Catskills opened its doors in February of 2018 as the last of the eastern state’s first tranche of four Las Vegas-style commercial casinos. It was hoped that these properties, which additionally encompass Rivers Casino Resort Schenectady, Tioga Downs Casino Resort and Del Lago Resort and Casino, would help to boost upstate tourism but they have since largely failed to live up to expectations with revenues continually coming in below predictions.
Although Catskills is the closest of these four new casinos to the over eight million inhabitants of New York City, Empire Resorts still managed to chalk up a $36 million operating loss for its most recent financial quarter. The Poughkeepsie Journal moreover detailed that the firm had earlier envisioned recording gaming revenues for 2019 of about $300 million but looks likely to finish the year with only about two-thirds of this amount.
Reportedly read the SEC filing from Empire Resorts Incorporated…
“We are currently generating operating losses as the casino revenues have not exceeded the costs related to the casino since its opening in February of 2018. Given our continuing negative cash flows from operations and in order to meet our expected cash needs for the next twelve months and over the longer term, we will be required to obtain additional liquidity sources or possibly restructure our existing debt and other obligations.”
Empire’s filing also contained a revelation that it had received a non-binding offer for its majority stake in the Sullivan County venue from Asian casino operator Genting Malaysia Berhad. This Kuala Lumpur-listed giant purportedly wants to save the struggling 18-story New York property by folding it into an American portfolio that already contains the slots-only Resorts World Casino New York City.
The newspaper reported that Ed Farrell, Americas President for Genting Malaysia Berhad, later told USA Today that his firm is hoping to complete its takeover of the Catskills venue before the end of the year in advance of incorporating all of its own local promotion and management teams.
Farrell reportedly stated…
“We’re in a unique position where we can assist with the management of Resorts World Catskills through our Resorts World Casino New York City property at a low cost. We can bring synergies to both projects and, by just operating at a higher scale, we’re going to be able to put the cost structure in a way that Resorts World Catskills can turn to black and we can make money going forward.”