MGM buying Yonkers, N.Y., casino for $850M
MGM Resorts International came at Connecticut from another angle Tuesday, announcing it’s buying Empire City Casino, a Yonkers, N.Y., racetrack casino, for $850 million while remaining committed to its plan to build a Bridgeport casino if the state authorizes one.
In less than three months, MGM Resorts plans to open MGM Springfield, Massachusetts’ first full-blown resort casino, a few miles from Connecticut’s northern border.
The Mashantucket Pequot and Mohegan tribes, respective owners of Foxwoods Resort Casino and Mohegan Sun, expect to lose significant business to MGM Springfield. The tribes, partners in a plan to develop an East Windsor casino as a hedge against the Massachusetts facility, declined to comment Tuesday on MGM Resorts’ latest acquisition.
In a statement, MGM Resorts stressed its commitment to Bridgeport, where it unveiled plans for a $675 million resort casino last September, announcing it intended to push for the Connecticut legislature to establish a competitive-bidding process for a commercial casino license. The legislature adjourned this month without authorizing such a process.
“While we remain hopeful that Connecticut will build on this year’s legislative progress and ultimately authorize a competitive process for a commercial casino license, the state’s delay will not deter us from executing our company’s comprehensive growth strategy,” the Las Vegas-based operator said.
“For years, MGM Resorts has been unwavering in its interest in Connecticut, and in Bridgeport in particular, but thus far Connecticut has rejected all attempts to have an open competitive process for a commercial casino license,” it said. “We continue to believe that with its proximity to the New York City (metropolitan area) and its excellent existing infrastructure, Bridgeport provides substantial opportunity to unlock real value for not only a casino developer, but for the people of Connecticut and the state itself.”
“Just as other jurisdictions in the northeastern region of the United States have modernized their gaming laws to take advantage of shifting market dynamics, we renew our call on Connecticut to do the same,” it said.
State Sen. Cathy Osten, a Sprague Democrat, was unmoved by MGM Resorts’ statement.
“I cannot say any stronger that we have partners that work with us already — reliable partners that have been with us for 25 years,” she said, referring to the tribes. “I continue to believe they (MGM) have no intention of putting anything in Bridgeport.”
Rep. Joe Verrengia, a West Hartford Democrat who cochairs the legislature’s Public Safety and Security Committee, which oversees gaming, said he didn’t consider MGM Resort’s purchase of Empire City to be an indication that its commitment to Connecticut had diminished.
Clyde Barrow, a gaming expert who has done some consulting work for the tribes, said that while MGM Resorts’ purchase of Empire City “makes perfect sense,” its continuing interest in a Bridgeport casino “would make no sense.”
“They’re being disingenuous when they say they’re still committed to building in Bridgeport when they’re going to be 17 miles from the Connecticut border” in Yonkers, N.Y., Barrow said. “They’ll be in a position to bid on table games when New York state’s moratorium on them expires in a few years.”
MGM Resorts announced its real-estate investment trust, MGM Growth Properties, will acquire Empire City and lease it back to MGM Resorts, which will operate it.
“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,” Jim Murren, MGM Resorts’ chairman and chief executive officer, said in the company’s statement.
Empire City is one of the largest slot-machine facilities in the United States and is one of only two such facilities that directly serve the New York City metropolitan area. Its 97-acre expanse, which includes Yonkers Raceway, is 15 miles from Times Square in Manhattan. It has more than 5,200 slots and electronic table games but no “live” games manned by dealers.
MGM Resorts has agreed to pay Empire City an additional $50 million if the casino is awarded a license for live table games on or before Dec. 31, 2022, and MGM Resorts accepts such license by Dec. 31, 2024.
“We have been a partner of New York State and its communities for 46 years, and it was important to us that we identify an entity that could build on the strong foundation we have established and bring our vision to fruition,” Tim Rooney Sr., president and CEO of Empire City, said in a statement. “We are confident we have found that in MGM Resorts, one of the premier gaming entities in the world.”
The Rooney family, which owns the Pittsburgh Steelers of the NFL, has built Empire City into one of the most successful gaming operations in the United States. Empire City has the sixth-largest gaming floor in the country and has more than 1,200 employees. For the 12 months that ended March 31, it reported net revenues of about $230 million.
Empire City announced in November 2017 that it would seek a buyer.
The sale comes following a U.S. Supreme Court decision that could open up sports-betting opportunities for states throughout the country, including Connecticut. MGM Resorts said it intends to be “a major player” in sports betting in the Northeast.