MGM NYC Casino Strong Post-Resorts World Table Games Launch

Facing increased competition in the form of newly launched table games at Resorts World New York, MGM Resorts International’s (NYSE: MGM) Empire City Casino is holding up well.

In new report to clients, Jefferies analyst David Katz notes that Empire City’s second-quarter gross gaming revenue (GGR) jumped 4.5% year-over-year — an impressive feat when considering Genting-operated Resorts World New York in Queens launched table games in April.

Along with Resorts World New York, Empire City was widely seen as one of the leading contenders for the three downstate casinos New York awarded, but MGM surprisingly withdrew from that competition last October, opting to remain a slots-only gaming venue.

Why Empire City Strength Matters

Under any circumstances, Empire City’s second-quarter GGR growth is impressive, but it’s even more so when considering the upped competition from Resorts World in the form of table games.

Speaking of increased competition, two more New York City casinos — Hard Rock in Queens and Bally’s in the Bronx — are several years away from opening, but those venues up the market’s competitive posture. Those properties are, on average, a 22-minute drive from Empire City.

So given Resorts World’s stout transition to table games and Empire City’s fortitude in the face of that move, it’s possible both venues will continue thriving when new rivals join the Big Apple party.

Kansas City Casinos Could Use Some Love

Looking at goings on in other regional markets, Katz points out that second-quarter GGR at Caesars Entertainment’s (NASDAQ: CZR) three Kansas City-area casinos slumped in aggregate due to weakness at Harrah’s and Horseshoe St. Louis.

There are four competing venues near Harrah’s Kansas City within a 15-minute drive, confirming competition there is fierce. With Caesars close to being acquired by Tilman Fertitta, there’s talk of potential asset sales, but appetite for the Kansas City market could be limited. As Katz notes, the public operators there, which include Caesars, Boyd Gaming (NYSE: BYD) and Penn Entertainment (NASDAQ: PENN), haven’t been investing in their venues there.

“The Kansas City market has not seen meaningful recent capital investment, suggesting that a property refresh by any of the public operators could prove incremental,” concludes the analyst.