The competitive and economic assumptions underpinning our application have shifted, altering our return expectations on the proposed $2.3-billion investment.
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The latest drop, the second month-over-month decline since March, reflects the market's normal cooling heading into fall.
The competitive and economic assumptions underpinning our application have shifted, altering our return expectations on the proposed $2.3-billion investment.
YONKERS—In a shocking move, MGM Yonkers Inc. announced in the late afternoon on Tuesday, Oct. 14 that it was withdrawing its application for a full commercial casino license at its Empire City property here.
MGM Empire City was one of four applicants to be considered by the Gaming Facility Location Board and later the State Gaming Commission for up to three full commercial casino gaming licenses to be awarded by year’s end. MGM Empire Casino in Yonkers won a unanimous 5-0 vote on Sept. 25 from its Community Advisory Committee to advance.
In a statement MGM said it “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.”
MGM’s statement specifically cited the shortened casino licensing term by the New York State Gaming Commission as a key reason for its withdrawal. “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,” MGM stated.
Under a proposed rule issued in August by New York State Gaming Commission General Counsel Edmund Burns, the term of a casino license would be based on the amount of investment. The rule, which was published in the State Register on Oct. 8 and is now under a 60-day comment period that ends on Dec. 7, establishes four tiers in terms of licensing term— 10 years for investments up to $1.5 billion, 15 years for investments for up to $5 billion; 20 years for investments up to $10 billion and 30 years for investments of more than $10 billion.
All four casino applicants—MGM Empire City, Resorts World New York City in Queens, Metropolitan Park in Queens and Bally’s in the Bronx are under the $10-billion threshold. However, on Oct. 14, Resorts World New York City announced it had filed a supplemental application with the New York State Gaming Commission that increased its overall investment from $5.5 billion to $7.5 billion, including $2 billion in community benefits. Under the proposed rule, Resorts World New York City could qualify for a 20-year casino license. Metropolitan Park in Queens at an $8.1-billion investment value could also qualify for a 20-year license, while Bally’s in the Bronx coming in at a projected $4-billion cost could qualify for a 15-year license.
The MGM Empire City proposal, which calls for a $2.3 billion total investment was the smallest of the four casino license candidates and would qualify under a 15-year casino licensing term. It would need to more than double its investment to qualify for a 20-year license. The $2.3-billion investment into the expansion of the existing Video Lottery Terminal facility included a total of $1.8 billion in capital investment.
In its application for a casino license earlier this year, MGM Empire City stated: “In order to meet a minimally acceptable return on such a level of investment, we require the maximum 30-year license term.”
Concluding its statement, MGM noted its partnership with the City of Yonkers and New York State and touted Empire City Casino’s revenue generation over the years, including $1.6 billion since it took ownership of the property in 2019. “We know our decision will impact many individuals; we remain committed to operating the property in its current format and believe it will continue to enjoy success serving customers in Yonkers and the surrounding communities,” MGM stated.
Yonkers Mayor Mike Spano offered harsh criticism of MGM’s decision to abandon its plan at Empire City. “This decision by MGM defies all logic and it’s nothing short of a betrayal to the people of Yonkers and Westchester County. I am calling on Governor Hochul to launch an independent investigation into this process, because the reasons MGM gives for its 180-degree reversal just don't add up,” the mayor stated.
Westchester County Executive Ken Jenkins shared the mayor’s criticism and stated he was “shocked, disappointed, and deeply dismayed by MGM Resorts’ decision to withdraw its commercial casino license application.” He concluded: “For decades, so many of us have supported this effort, believing in the promise of good-paying jobs, new investment, and long-term economic stability for Yonkers and Westchester County. While this was not the outcome we hoped for, we remain committed to supporting MGM and Yonkers and to ensuring that our community continues to thrive.”
The Business Council of Westchester and the coalition, “A Sure Bet for New York’s Future,” in a statement said they were “deeply disappointed by today’s announcement that MGM Empire City will withdraw from the casino licensing process. Throughout the many years of this effort, we have fought tirelessly with the MGM Empire City team to ensure that this important local business—one of the largest private employers in New York’s third largest city—would be given the opportunity to compete for a full-scale commercial casino license, which would have allowed MGM to directly hire 2,000 new employees.”
They termed the decision “devastating news for the City of Yonkers, the County of Westchester, and our entire region” and later stated that it is “a major setback for economic development, workforce opportunity, and community growth across the Hudson Valley and beyond.”
The New York State Gaming Commission had no comment on Mayor Spano’s comments requesting a state investigation into the casino selection process.
The latest drop, the second month-over-month decline since March, reflects the market's normal cooling heading into fall.
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