Empire City Strikes Back: MGM Buys NY Racino For $850 Million

MGM made it clear that sports betting was going to be a priority this year. It discussed it on its most recent earnings call and at the Sports Betting USA conference late last year.

The company expected the recent ruling from the Supreme Court to open up the possibility of legalized sports betting in the United States. It spent the last few months ahead of the Supreme Court’s decision preparing for the new sports betting landscape.

On Tuesday, MGM announced it entered into an agreement with Empire City Casino in Yonkers, New York. It is possible the latest acquisition for the Nevada-based company supports their sports betting priorities.

MGM buys Empire Casino in New York

MGM has been trying to break into the New York gaming market for at least the last five years. They were unsuccessful in obtaining one of four casino licenses made available when the gambling expansion law passed in late 2013.

MGM is buying Empire City Casino for $850 million and expects the deal to finalize in the first quarter of 2019. The racino reportedly earned about $230 million in net revenue for the year ending March 31, 2018.

Jim Murren, chairman and CEO of MGM said following in a press release announcing the sale:

We are excited to announce the addition of Empire City to the MGM Resorts portfolio. 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.

MGM and New York sports betting

With the purchase of Empire Casino, MGM is ready to be early to market in the New York sports betting scene. New York is just one of several states that have addressed the sense of urgency around sports betting with new legislation.

Sports betting is already legal via a voter referendum, and New York can regulate it for commercial casinos. Racetracks, including Empire City, are not addressed in the existing law.

Assemblymember Gary Pretlow, the head of the gaming committee, represents Empire City as part of his district. He is planning to introduce sports betting legislation as early as this week. Legal Sports Report obtained a copy of the draft of the proposed bill.

The New York legislature is scheduled to wrap up its session on June 20. Legislators will have to act fast if they want sports betting in place sooner rather than later.

MGM is ready to expand its sports betting operation

MGM owns several properties in states where sports betting will likely launch soon.

In New Jersey, MGM owns Borgata. MGM is ready to launch New Jersey sports betting pending legislation. The New Jersey Senate and Assembly are targeting a June 7 vote on sports betting bill.

Mississippi already legalized sports betting. State officials indicate sports betting will launch by the end of summer. MGM owns two properties in the state.

Additionally, MGM may have some interest in the Pennsylvania sports betting market. Pennsylvania passed a gaming expansion law last year that made additional casinos licenses available. There were rumors that MGM was talking to Sands to gain entry into the market – although that is not confirmed.

What is not a rumor is MGM wanting to expand sports betting beyond Nevada.

The company already operates a thriving Nevada sports betting operation. The infrastructure that is in place allows MGM to move fast into new markets where it has a presence.

All that is needed now is a green light from the states.

Photo by Ritu Manoj Jethani / Shutterstock.com

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