Empire Resorts and an affiliate of bet365 Group, have announced a strategic alliance to develop a physical and online sportsbook in New York State at Resorts World Catskills, New York’s newest and largest integrated commercial casino resort destination with closest proximity to Manhattan. The 20-year agreement will see the two organizations offer retail sports betting, an online sportsbook and online gaming at Resorts World Catskills if and when permitted by applicable law.
Under the sports wagering agreement, Empire and bet365 will establish what they claim will be New York’s premier sports betting and online gaming option. This agreement provides for the companies to split profits 50/50 once bet365 recoups its start-up and other costs.
In connection with the agreement, the bet365 affiliate will acquire up to $50m of Empire common stock at a price of $20 per share in two tranches, making it the firm’s second largest stockholder. Additionally, Kien Huat Realty III, Empire’s largest stockholder, has committed to purchase up to $126m of convertible preferred stock, with a conversion price of $20 per share.
The official press statement noted: “The investment by bet365 and the commitment by Kien Huat strengthens Empire’s financial position and underscores Kien Huat’s view of the potential for value creation in Empire’s Resorts World Catskills.”
“Joining forces with bet365 positions Empire and our flagship Resorts World Catskills to lead a potentially enormous new market,” said Manny Pearlman, executive chairman of Empire Resorts. “bet365’s global expertise in effectively developing and executing world-class sportsbooks strongly complements Empire’s leadership in commercial casino operations in New York.
“This collaboration, which will enable Resorts World Catskills to be a leading destination for sports wagering in New York State, highlights our commitment to the continued growth of Resorts World Catskills, as well as our dedication to working with the best, most innovative pioneers in the industry to provide world-class gaming options.”
Resorts World Catskills is one of only four commercial casinos in New York State currently authorized by statute to offer retail sports betting pending the promulgation of regulations. The alliance, meanwhile, provides bet365 access to the New York State sports wagering market, which, according to market estimates by Eilers & Krejcik Gaming, is expected to become the single largest market jurisdiction for sports betting in the US other than California, with projections for more than $1bn in annual revenues from sports betting within five years of legalization.
Following the announcement of a market access deal in New Jersey earlier this year, bet365 says it is now well positioned for sports betting expansion into New York State.“This landmark agreement, which combines Empire’s gaming operating skill with our expertise in providing best-in-class online sports betting, allows bet365 to tap into what we believe will be one of the most significant online and sportsbook markets in the United States,” said Simon Betteley, president of bet365 affiliate Hillside (New York).
The alliance with bet365 represents the next phase of Resorts World Catskills’ growth, including the addition of a new hotel with two dining and entertainment venues by the end of the year. In 2019, two additional hospitality venues are expected to open at the destination resort in which Resorts World Catskills is located. The Kartrite Hotel and Indoor Waterpark is scheduled to open in the first quarter of 2019, and a Rees Jones redesign of the well-known Monster golf course will debut in the second half of 2019.
Following its initial investment, which closed today, an affiliate of bet365 will own approximately 4.9% of Empire’s outstanding common stock. Pursuant to the sports wagering agreement, the parties expect to use the bet365 brand and online consumer facing sports betting and digital platform.