MGM Resorts International, the global gaming and entertainment giant, discarded its $2.3 billion bid for a coveted state casino license in the New York suburb of Yonkers, saying its expected return on investment had changed.
The move provides a surprise twist to the competition just weeks after MGM cleared a major hurdle. The decision narrows the field of the closely watched selection process to three contenders vying for one of up to three licenses the state is expected to issue by early December.
The company said in a statement late Tuesday that it had to make “the difficult decision” to withdraw its bid, which centered on transforming the historic Empire City Casino in Yonkers into a full-fledged commercial casino and entertainment destination.
MGM quit the competition after a five-person committee appointed by elected officials voted 5-0 in favor of its bid in late September, in contrast to the losing hands dealt to some others, including three rival bids in Manhattan.
“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 said. “The newly defined competitive landscape — with four proposals clustered in a small geographic area — challenges the returns we initially anticipated from this project.”
MGM said its proposal for an expanded and overhauled Empire City Casino also “was predicated on the receipt of a 30-year commercial casino license” and that, based on newly issued guidance from the state, it would 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,” landlord Vici Properties, MGM said.
Varying proposals
MGM, which bought the Empire City casino in 2019, said it remains “committed to operating the property in its current format.” An MGM spokeswoman didn’t respond late Tuesday to a request for further details.
Still, it remains to be seen if that commitment to the current format will be the case.
If Yonkers doesn’t get one of the three licenses, Empire City Casino "will wither and die," James Cavanaugh, chair of the local committee that recently cast the crucial vote, said at the time of the vote. The committee members have said a majority of residents have expressed support for the project despite concerns about noise, traffic, flooding and quality-of-life issues.
MGM’s plan had called for the full renovation and expansion of Empire City Casino’s existing gaming areas; the addition of a 5,000-person maximum capacity entertainment venue and accompanying meeting space; three new full-service restaurants; and the renovation of existing food and beverage venues.
Empire City Casino at Yonkers Raceway traces its roots back to 1899, when it was founded as Empire City Trotting Club. MGM Resorts purchased it in 2019.
With MGM now out of the running, the three remaining contenders all stand a chance to get a license, and Queens has emerged as a location leader among bidders in the high-stakes race.
Steve Cohen, the New York Mets owner and billionaire hedge fund investor, has won full community committee support for his $8 billion casino bid to transform 50 acres of asphalt parking lots around Citi Field in Queens into a sports and entertainment park complex. Resorts World’s $5.5 billion expansion plan at Aqueduct Racetrack in Queens also recently won full local panel support.
Outside of Queens in the Bronx, Bally’s proposed Bronx casino resort at Bally’s Golf Links at Ferry Point also has made it to the final round.
The state’s Gaming Facility Location Board is expected to make final decisions on the proposals by Dec. 1.