One less gaming company is interested in putting a casino in downstate New York.
MGM Resorts officially withdrew from consideration its plan to transform Empire City Casino into a destination resort and casino.
MGM had promised to invest significantly in its current property in Yonkers, but the company surprised many in the industry by suddenly dropping out of the regulatory bidding process for a downstate New York casino.
The mayor of Yonkers, Mike Spano, called it “nothing short of a betrayal,” according to 6sqft New York.
Jubilation turns to disappointment
Other area officials were similarly perplexed, including Westchester County Executive Ken Jenkins.
“Frankly, this decision makes little sense. Especially after MGM had just been celebrating its advancement through the first round of the process.”
Jenkins and other county officials were anticipating a major economic boon to Westchester County and Yonkers if MGM Reports had won its bid.
MGM cites ‘newly defined competitive landscape’ for pullout
In a statement, MGM Resorts cited an inability to compete as the main reason behind the startling decision.
“The newly defined competitive landscape – with four proposals clustered in a small geographic area – challenges the returns we initially anticipated from this project.”
Changes in the licensing process also contributed to the decision, MGM Resorts said in a statement.
“[O]ur 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.”
The high cost of obtaining a casino license could also have contributed to MGM’s decision. Reports indicate that New York will charge $500 million for a license. In addition, the state has one of the highest tax rates on gaming in the country.
Bally’s project could be frontrunner now
Prior to dropping out, MGM Resorts was considered a frontrunner for one of three licenses to operate a full-scale casino downstate. With the exit of MGM, that leaves Bally’s, Resorts World, and a Steve Cohen-led project called “Metropolitan Park” as the entities vying for a casino license.
With MGM out of the running, speculation is that Bally’s will emerge as the favorite for a casino license in Queens at Whitestone, the former site of a gambling facility owned by Donald Trump. According to some reports, the Trump Organization could receive a significant amount of money if their former property is purchased by Bally’s for a new casino.
Bally’s could also potentially place a casino in the Bronx, if the deal with the Trump property fails.
Cohen’s proposed $8 billion casino would be near Citi Field in Queens. Lastly, Resorts World is proposing a casino resort at the former location of the Aqueduct Racetrack in Jamaica.
All three projects have received tentative approval from zoning and planning committees.
