An unexpected development
Confirmation of MGM’s decision was revealed on Tuesday afternoon, several hours after the company’s Q3 financial report was published.
According to the report, MGM’s financial guidance for net revenue was increased to at least $2.75 billion and EBITDA of roughly $200 million. It also confirmed that net revenue hit $667 million during Q3, a 23 percent year-over-year improvement.
“Today, MGM Resorts made the difficult decision to withdraw its application for a commercial casino license in Yonkers, New York,” an announcement read. “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.”
A number of casino groups were formed during a competitive process. However, only eight made it to CAC reviews, and only four were advanced to the GFLB.
One of those, Bally’s Bronx, is less than 12 miles away from the casino’s targeted site. The others in Jamaica and near Citi Field, both in Queens, are about 30 miles away.
“The newly defined competitive landscape – with four proposals clustered in a small geographic area – challenges the returns we initially anticipated from this project,” the statement read. “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.”
MGM betrayed the community?
Despite dropping the bid for a full-fledged casino, MGM affirmed its commitment to its racino in Yonkers.
“MGM Resorts has been a proud partner of the City of Yonkers and the State of New York since we purchased Empire City Casino in 2019,” an announcement read. “The property has generated more than $5 billion for New York State education, including $1.6 billion under our ownership. 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.”
The GFLB had been charged with removing one of four remaining applicants from its pool before the end of the year. Although the state has only been expected to award up to three licenses, the general expectation has been that it would award all three.
Yonkers Mayor Mike Spano declared that MGM’s withdrawal was a sign of betrayal against Yonkers and Westchester County. He also implied that there was unseen subterfuge between Bally’s and President Trump due to the existing connection between the two, and Trump standing to gain $115 million if Bally’s receives an operator’s license.
“I am calling on Governor (Kathy) Hochul to launch an independent investigation into this process, because the reasons MGM gives for its 180-degree reversal just don’t add up,” Spano said in a statement.
With only three remaining bidders, it’s unclear if the process is now a mere formality, or if any other bidders are at risk of being turned down without a present alternative.
