After being considered one of the frontrunners for a downstate New York casino license, MGM Yonkers is withdrawing itself from consideration right before the finish line.
On Tuesday the company announced that it is rescinding its application, saying it no longer made economic sense to pursue expanding its existing property, MGM Empire City.
“Today, MGM Resorts made the difficult decision to withdraw its application for a commercial casino license in Yonkers, New York. Since submitting our application in June, the competitive and economic assumptions underpinning our application have shifted, altering our return expectations on the proposed $2.3 billion investment,” the group said in a statement.
Even an existing property would still be expected to invest at least $500 million in capital investment on the property. MGM had said it planned to spend $1.8 billion on improving the facility in addition to the licensing fee.
The statement from MGM also noted that, with a change in what kind of license it would be eligible for, the math just didn’t add up.
“The newly defined competitive landscape – with four proposals clustered in a small geographic area – challenges the returns we initially anticipated from this project. Also, our proposal to renovate and expand Empire City Casino was predicated on the receipt of a 30-year commercial casino license but based on newly issued guidance from the State of New York we now expect to qualify for only a 15-year license. Taken together, these events result in a proposition that no longer aligns with our commitment to capital stewardship, nor to that of our real estate partner in Yonkers, VICI,” the statement added.
According to information provided by the New York State Gaming Facility Location Board, while 30 years is the maximum length of a license, the committee evaluating the applications would adjust the proposed length of a license based on capital investment and the expected revenue generated for the state by the property.
To date, MGM Empire City has generated over $5 billion in tax revenue for the state since opening its doors in 2006. Of that, $1.6 billion has come since MGM took ownership of the property in 2019.
The locations of the four remaining applicants, including MGM Empire City, were all outside of Manhattan. Two proposed casinos, the proposed Hard Rock Casino near Citi Field and the existing racino run by Resorts World at Aqueduct Racetrack, are in Queens. The proposed Bally’s project at the former Trump Links golf course is in the Bronx. The MGM project was the only one outside of the five boroughs in Westchester County.
The MGM Empire City project received no pushback at the local level, a problem that torpedoed the hopes of many other casino contenders. However, now the mayor of Yonkers is unhappy that the city’s loyalty went to waste.
“Our city has stood ready with the workforce, the infrastructure, and the overwhelming public support for full gaming at Empire City. MGM’s blaming New York State Government for their withdrawal rings hollow. The same rules apply to the other bidders. Why aren’t they pulling out as well?” Mayor Mike Spano told local news outlet PIX11. He told another outlet he would like to investigate the property’s withdrawal, as something seems “fishy”.
In the meantime, there are now three remaining projects and three applications, but state regulators have granted no official approvals on applications yet.
