MGM Yonkers Inc., doing business under MGM Resorts International, has officially applied for a commercial casino license in New York.
In its application, the company presented an ambitious $2.3 billion redevelopment plan to redevelop Empire City Casino in Yonkers.
Key Takeaways
- MGM Resorts has submitted its application for a New York casino license.
- The license would grant MGM permission for its $2.3 billion redevelopment plan for Empire City Casino.
- The license deadline is June 27 at 4:00 p.m. ET
The plan, in a bid to be presented to the New York Gaming Commission and the Gaming Facility Location Board, seeks to convert the current racino into a full-service commercial casino and entertainment complex. The conversion would include a re-arranged gaming area, an enlarged high-limit lounge, and a retail BetMGM Sportsbook building.
Assuming approval, the entire project is projected to be finished by mid-2029.
MGM's bid is based on economic benefits to the community. Under the revenue-sharing plan, 20% of the tax revenues would go to the local government. The City of Yonkers would get 10%, Westchester County 5%, and 5% to Rockland and Putnam counties.
Fierce casino competition mounts
With time ticking down to today's deadline for filing applications for downstate casino licenses in New York, bidding among prospective operators is boiling over. Physical and electronic copies of each filing and a required $1 million application fee must be received no later than 4:00 p.m. ET today.
After careful submission, all proposals will be screened by a locally designated committee of community advisors. The committee will analyze the proposed projects' social, environmental, and economic impacts. For an application to continue, it must pass a minimum two-thirds majority vote from its corresponding committee.
Applicants must also complete the entitlement process, such as an environmental review and zoning approvals, by September 30. The Gaming Facility Location Board will make the choices and will announce them on or before December 1. Each chosen bid will require a $500 million licensing fee and a minimum of like-value capital investment.
Investor response to MGM remains mixed
Investor opinion regarding MGM Resorts' bid to grow in New York is still guarded. JPMorgan started coverage on the company this week with a neutral rating and $38.00 price target, attributing to low expectations of near-term revenue growth in Las Vegas and broader economic concerns.
With a capitalization of about $9.2 billion and a price-to-earnings ratio of 15x, MGM has spent more than $12 billion on stock buybacks since 2016, though its shares are yet to increase by a significant amount.
JPMorgan highlighted the opportunity to obtain a New York gaming license as a bullish catalyst. It also stated that BetMGM's balance sheet and the firm's online gaming site should be enhanced. However, the bank admitted that MGM's discounted valuation is bogged down in securing good investor demand. This challenge could linger until further visibility is available from the outcome of the license.
