MGM Resorts International, the leading gaming, hospitality and entertainment company with a strong presence across the United States, became the latest operator to withdraw from the New York casino license race.
The decision to withdraw from the casino license race was difficult
On Tuesday, the company confirmed that its subsidiary, MGM Yonkers Inc., withdrew its commercial casino license application submitted with the New York Gaming Commission and the Gaming Facility Location Board.
MGM Resorts recognized the decision to exit the commercial casino race as difficult.
However, the company explained in a statement: "Since submitting our application in June, the competitive and economic assumptions underpinning our application have shifted, altering our return expectations on the proposed $2.3bn investment."
Moreover, MGM Resorts wrote: "The newly defined competitive landscape – with four proposals clustered in a small geographic area – challenges the returns we initially anticipated from this project."
Another issue the company found with the process involved the duration of the commercial casino license.
Initially, MGM Resorts considered renovating and expanding Empire City Casino and receiving a 30-year commercial casino license. However, under the newly released guidance, the company can qualify only for a 15-year license.
"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," MGM Resorts added.
The company explained that Empire City Casino has generated more than $5bn for education in New York State, and this includes some $1.6bn generated under MGM Resorts' ownership.
"We know our decision will impact many individuals; we remain committed to operating the property in its current format and believe it will continue to enjoy success serving customers in Yonkers and the surrounding communities," the company further explained.
Earlier this year, Wynn Resorts announced its decision to withdraw from the New York downtown casino race.
On the other hand, this summer, one of the bidders for a casino license, Resorts World, unveiled details regarding what would be New York's largest integrated resort.
Contingent on obtaining one of the coveted licenses, Resorts World plans to invest $5.5bn to redevelop its Resorts World New York City property.
