MGM Resorts is adding another state to its domestic portfolio by announcing it has reached a deal to acquire the Empire City Casino in Yonkers, New York, for $850 million.
The deal involves the company’s real estate investment trust, MGM Growth Properties (MGP). MGP will pay $625 million and then lease back the property’s operations to MGM Resorts, which will cover the remaining $225 million.
The $850 million price includes assuming approximately $245 million in outstanding debt held by Empire City.
“This acquisition represents an excellent opportunity to further solidify our presence on the East Coast, and in particular, expand our reach into the high-density New York City region,” MGM CEO Jim Murren said in a statement.
Murren added that the acquisition allows the company to expand its footing into a highly desirable market without tying up substantial cash flow. The sale is dependent on regulatory approvals, and is expected to close in the first quarter of 2019.
Yonkers Raceway added its Empire City Casino in the fall of 2006. Today, the casino features more than 5,200 slot machines and electronic table games.
Empire City is located 15 miles north of Manhattan’s Times Square. The only gaming venue in New York City proper is Resorts World in Queens near JFK International Airport.
Yonkers Raceway has been controlled by the Rooney family for nearly five decades. The Rooneys are most known for founding and owning the NFL’s Pittsburgh Steelers.
Empire City CEO Tim Rooney Jr began exploring partnerships or offers for the racetrack casino in November 2017 in response to a widespread belief that New York legislators will authorize commercial gaming licenses in downstate areas in the years ahead. An ordinance currently prohibits Manhattan from welcoming a casino, but that prohibition is set to expire in 2020.
In 2013, New York Gov. Andrew Cuomo (D) signed a law that authorized up to seven full-scale casinos in upstate regions. The four that have since opened are underperforming in terms of anticipated gross gaming revenues.
Betting on Sports
Should the Empire City deal go through, MGM Resorts will expand its domestic operations to seven states. New York would also complement the company’s recent investment in the northeast.
MGM spent $1.4 billion to build its National Harbor integrated casino resort just outside DC in Maryland, and is putting the finishing touches on its $960 million property in Springfield, Massachusetts.
Though live dealer table games aren’t permitted at New York’s downtown racinos, they could soon become authorized to operate sports betting.
New York lawmakers are currently deliberating the best path forward to regulate sports gambling in the wake of the Supreme Court’s repeal of the longstanding federal ban known as PASPA (Professional and Amateur Sports Protection Act).
State Sen. John Bonacic’s (D-District 42) bill, which is currently being reviewed by the chamber’s Finance Committee, would authorize licensed casinos to partner with sportsbook operators to facilitate wagers on collegiate and professional sports. However, bets on college events that involve a New York team or takes place within the state’s borders would remain prohibited.