MGM set a target for this year, making it clear that sports wagering is going to be an important issue for the company. Whilst expecting a positive outcome of the Supreme Court’s late decision to legalize betting on sporting events across the U.S., the entertainment group worked hard on the agreement with Empire City Casino in Yonkers, New York, which it recently purchased for $850 million. The acquisition supports MGM’s current business priorities and casts a new light on the Nevada-based company’s goals.
Although the New York gaming market has been struggling with licenses for the last five years, the entertainment company succeeded in obtaining the city’s most attractive venue, and plans to finalize the purchase in the first quarter of 2019. According to casino reports, the racino earned approximately $230 million in net revenue until March 31st, 2018. That is why chairman and CEO, Jim Murren, said that adding Empire City to the portfolio represents an extraordinary opportunity for future entrepreneurship on the East Coast.
The transaction will also enhance the group’s free cash flow and allow it an early access to the sports betting scene. The state of New York is among the first territories to have addressed sports wagering with a new legislation, making it legal via a referendum for commercial casinos. However, racetracks are still not regulated by the law and are awaiting further amendments. Gary Pretlow, the head of the gaming committee at Empire City, plans to introduce a sports betting legislation at a scheduled session on June 20th. In order to legalize wagering on sports event, the legislators will have to act fast, said Pretlow.
America’s global hospitality and entertainment company, MGM, already owns a considerable number of properties in states where sports betting has launched, including New Jersey, Mississippi and Pennsylvania. As reported by the state officials, the gaming expansion will allow further casino licensees to operate thriving sports betting operations, and currently the only thing needed for that is the green light, which might occur on June 7th in NJ Senate and Assembly.
Source:
“MGM Resorts International and MGM Growth Properties LLC Announce Transactions to Acquire Empire City Casino in Yonkers, New York”, mgmresorts.com, May 29, 2018.