MGM Resorts International announced that it bought Empire City Casino and Yonkers Raceway for $850 million from the Rooney family, who has owned the racetrack and casino for more than 46 years.
“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,” said Jim Murren, chairman and CEO of MGM Resorts International. “We believe this transaction enhances our free cashflow 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 Resorts said it has agreed to pay an additional $50 million if Empire City is awarded a license for live table games prior to Dec. 31, 2022.
“With Empire City’s approximately 40 percent share of gross gaming revenues in the market, we believe there are significant opportunities for MGM Resorts to further drive growth,” said Dan D’Arrigo, executive vice president and chief financial officer of MGM Resorts International.
The 97-acre facility sits just 15 miles from Times Square in Manhattan and offers more than 5,200 slots and electronic table games, multiple dining outlets, entertainment, and both live and simulcast horse racing. Empire City features the sixth-largest gaming floor in the country and welcomes nearly 8 million visitors each year.
The racetrack and casino employ more than 1,200 people and reported $230 million in net revenues for the fiscal year ended on March 31.
“Our vision for this property has always been to develop it into one of the world’s greatest entertainment destinations,” said Tim Rooney Sr., president and CEO of Empire City. “We have been a partner of New York State and its communities for 46 years, and it was important to us that we identify an entity that could build on the strong foundation we have established and bring our vision to fruition. We are confident we have found that in MGM Resorts, one of the premier gaming entities in the world.”
With more than 78,000 employees, MGM Resorts owns hotels and resorts across the globe, including those in Las Vegas, Detroit and Maryland. The company also owns the Borgata Hotel Casino & Spa in Atlantic City. In 2018, the company opened MGM Cotai in Macau, China, and the first Bellagio-branded hotel in Shanghai. The company is also in the process of developing MGM Springfield in Massachusetts. In Connecticut, the company aims to create a $675 million casino-hotel resort along Bridgeport’s waterfront.
The Yonkers acquisition follows the announcement in November that the Rooney family was looking for the “right strategic partner” to transform Empire into a global entertainment destination. Empire City retained J.P. Morgan Securities LLC to advise the company as it planned to “explore alternatives,” including strategic partnerships, to expand the casino’s gaming and entertainment offerings.
The casino has recently faced new competition to the north. Earlier this year, Empire Resorts Inc. opened the $1.2 billion Resorts World Catskills casino and resort in Monticello in Sullivan County.
Yonkers Raceway was founded in 1899 as the Empire City Trotting Club, and the Rooney family acquired Yonkers Raceway in 1972. In 2012, Empire City completed a 65,000-square-foot expansion that added gaming and restaurant space.
The acquisition is expected to close in the first quarter of 2019, subject to regulatory approvals. The total cost includes the refinancing of $245 million of Empire City’s outstanding debt, and MGM Resorts expects that approximately $260 million of the remaining consideration will be in the form of common stock.
John Ravitz, executive vice president of the Business Council of Westchester, called the sale an “economic milestone” for Yonkers, Westchester County and the state, adding that the Business Council “has long been an ardent supporter of this invaluable economic resource, and we will continue to take a leadership role in advocating for thoughtful, necessary and appropriate expansion and varied uses.”
“The proximity of Empire City to New York City and the entire metropolitan area is unrivaled, while its potential for far greater financial success with the addition of full gaming license remains untapped,” he said.