MGM Resorts International announced on Tuesday that it had entered into an agreement to buy Empire City Casino in New York.
That move would appear to be at least partially driven by the desire to serve the potential NY sports betting market.
MGM + Empire City
MGM is buying the racetrack and racino in Yonkers for $850 million, the entertainment and gaming giant said in a press release.
“We are excited to announce the addition of Empire City to the MGM Resorts portfolio,” said Jim Murren, chairman and CEO of MGM. “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.”
It adds a New York casino long-coveted by MGM to its portfolio. MGM had hoped to get one of the four commercial casino licenses issued in the state as part of a gaming expansion about five years ago, but was shut out.
For the last twelve months ended March 31, 2018, Empire City reported approximately $230 million in net revenues.
The transaction is expected to close in Q1 of 2019.
More sports betting for MGM?
The press release did not specifically mention sports betting as part of the acquisition, but it was almost certainly part of the calculus.
New York is one of several states considering sports betting legislation. It’s already legal and able to be regulated at the aforementioned commercial casinos under existing state law. But it’s not clear if that will roll out without a new enabling law for the state’s racetracks (like Empire City) and off-track betting facilities. Tribal casinos would likely be able to move forward with sports gambling as well, in that scenario.
Empire City is in the district of Assemblymember Gary Pretlow, who heads that chamber’s gaming committee. A draft of his proposed sports betting legislation surfaced this weekend, and will likely be introduced this week. The NY legislature is scheduled to wrap up its session in less than a month.
MGM is already poised to offer NJ sports betting via Borgata in Atlantic City, and its two casinos in Mississippi. MGM has been bullish on its position in sports betting moving forward in a world where the federal ban on single-game wagering no longer exists, thanks to the US Supreme Court decision.
Horse racing for MGM
The foray into New York also marks a first for MGM. It’s the first time the company will own a horse racing track.
Yonkers Raceway is a harness racing track originally founded in 1899. The track became a racino in 2006 with the addition of slot machines.