Global casino operator MGM Resorts International has withdrawn its commercial casino licence application to the New York Gaming Commission and the Gaming Facility Location Board in the United States. The announcement was made by the firm on Tuesday.
“MGM Resorts made the difficult decision to withdraw its application for a commercial casino licence in Yonkers, New York,” the firm said in a prepared statement.
The proposal had been submitted by MGM Yonkers Inc, a subsidiary of MGM Resorts. The US$2.3-billion bid proposed to transform the group’s Empire City Casino site – an existing slots and electronic gaming facility – into a “commercial casino and entertainment destination”, according to previous information.
MGM Resorts runs a network of casino properties in the United States. It is also the parent of Macau casino concessionaire MGM China Holdings Ltd. The firm is developing the first casino resort in Japan, to be located in Osaka.
MGM Resorts said in its Tuesday announcement: “Since submitting our application in June, the competitive and economic assumptions underpinning our application have shifted, altering our return expectations on the proposed US$2.3-billion investment.””
According to MGM Resorts, “the newly defined competitive landscape – with four proposals clustered in a small geographic area – challenges the returns we initially anticipated from this project.”
The group also said its proposal was predicated on a 30-year commercial casino licence, “but based on newly issued guidance from the State of New York, we now expect to qualify for only a 15-year licence.”
“Taken together, these events result in a proposition that no longer aligns with our commitment to capital stewardship, nor to that of our real estate partner in Yonkers, Vici Properties Inc.”
MGM Resorts noted it remained “committed to operating” Empire City Casino – which the firm had acquired in 2019 – in its “current format”.
Large gaming operators with venues in Asia were among those that had previously expressed interest in bidding for a downstate New York licence, including Wynn Resorts Ltd, Las Vegas Sands Corp, and Malaysia’s Genting group.
In May, Wynn Resorts said it would not take part in the bidding process for a licence in downstate New York. Rival casino operator Las Vegas Sands also dropped out of the race in April.
Genting group remains in the running: the conglomerate’s parent, Genting Bhd, announced on Monday that it had put forward a conditional voluntary takeover offer for its subsidiary Genting Malaysia Bhd.
Genting Malaysia is proposing – via a US$5.5-billion bid – to extend and upgrade its existing Resorts World New York City slot-machine and electronic gaming facility in Queens, New York.
Genting Bhd said on Monday, regarding its takeover offer for Genting Malaysia: “If the [New York] bid is successful, significant capital investment is required… In this regard, Genting believes that with control over Genting Malaysia clearly established through its majority ownership of Genting Malaysia shares, the overall financial profile of Genting Malaysia will be further enhanced, as Genting Bhd will be better placed to lend the Genting group’s financial strength and network to support the development of this significant project.”
Maybank Investment Bank Bhd said in a note on Tuesday that results of the downstate New York process were expected on December 1.