Land-based casino giant MGM Resorts International has agreed to purchase the Empire City Casino in Yonkers, NY. The deal is valued at approximately $850 million, including the assumption by MGM of about $245 million in debt. The transaction is expected to be completed in the first quarter of 2019.
The Empire City Casino is part of a complex that includes the Yonkers Raceway, which will also be transferred as part of the deal. It's owned by the sons of legendary Pittsburgh Steelers hall-of-famer Art Rooney.
At first only allowing pari-mutuel gambling, the property underwent expansions in 2006 - 2007 that installed more than 5,000 video slot terminals. Another renovation in 2013 added restaurants, more slots, and various aesthetic architectural elements. In 2015, the casino began offering other games besides slots. Among them are blackjack, craps, roulette, three card poker, sic bo, and baccarat. However, all of these games are run through electronic interfaces because the casino doesn't have a license to host casino table games. This also means that there's no poker room on the premises at present.
Empire City Casino is within driving distance of Manhattan, so it caters to NYC residents looking for some gaming action. It reported around $230 million in net revenue for the 12-month period ending March 2018.
MGM has been strengthening its foothold in the Northeastern United States. The group is opening the first Massachusetts casino in Springfield in August, and it intends to also build one in Bridgeport, Connecticut, pending the approval of the CT authorities. MGM already owns the Borgata, Atlantic City's top-performing gaming establishment. In a May 29 press release, Jim Murren, the CEO and Chairman of MGM Resorts, stated:
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. We believe this transaction enhances our free cash flow profile and presents attractive future opportunities for the Company, and we look forward to welcoming the Empire City team and guests to the MGM Resorts family.
The company already has an especially strong presence in Las Vegas where it manages the MGM Grand, Bellagio, Mandalay Bay, and several other properties. It also has interests globally, in Macau and Shanghai among other places.
One of the clauses of the Empire City purchase stipulates that MGM will have to hand over an additional $50 million if the casino is granted a table games license by the end of 2022. The only reason such wording would be included in the contract is that the new owners plan to add these games eventually.
Because MGM has a property management division in addition to its gambling operations, it's well positioned to transform Empire City into a fully fledged casino resort if it wishes to. This would involve the construction of a hotel, perhaps a golf course, and other amenities.
With the recent Murphy v. NCAA Supreme Court decision, the states are now allowed to implement their own sports-betting licensing regimes. There's a push in Albany right now to pass the relevant bills before the end of the legislative session on June 20. It's expected that the owners of race tracks will be allowed to run sportsbooks, including the possibility of mobile betting apps.
More exciting perhaps for readers of Professional Rakeback is the hope for online poker to be legalized in New York too. Leaders at MGM have expressed their strong support for internet poker. The company already has experience in this area with its PlayMGM and BorgataOnline New Jersey-licensed online poker platforms (they both share traffic and software with PartyPokerNJ).
MGM has been lobbying the government of New York to regulate online poker for several years now. In 2015, MGM Executive VP John McManus testified at a 2015 hearing held by the Racing, Gaming, and Wagering Committee of the New York State Senate. He outlined his view that online gaming doesn't cannibalize land-based casino traffic but rather enhances it.
Now that MGM will be ensconced in the ranks of licensed, tax-paying New York racino owners, it will possess additional leverage in the fight to get the right online gaming bills passed through the legislature.
Whether or not MGM plays a role in setting up a future regulated market for virtual poker in New York, you can still play online in the interim. There are no laws that criminalize the act of playing cards over the internet. You can read about the leading poker sites for New Yorkers in our guide to online poker in New York.