American global hospitality and entertainment company, MGM Resorts International (NYSE: MGM), declared Tuesday that together with its real-estate investment trust, MGM Growth Properties LLC (NYSE: MGP), it has agreed a deal that will see it buy Empire City Casino at New York for $850 million. According to the official press release, MGM Resorts could pay a blend of cash and $260 million in stock and assume about $245 million of Empire City’s outstanding debt. Another $50 million, that MGM also consented to pay contingent upon Empire City’s announcement of approval to host live table games prior to the end of 2022, brings the whole cost to $900 million.
The press launch additionally claims that MGM would market the Yonkers home for about $625 million into MGM Growth Properties and would lease it back for $50 million annually and a subsidiary of MGM Resorts would operate the land.
Chairman and CEO of MGM Resorts International, Jim Murren, communicated that They’re eager to add Empire City to the company’s portfolio.
Murren clarified, “This acquisition represents a superb opportunity to further solidify our presence around the East Coast, and in particular, expand our reach into the high-density new york region. We consider this transaction enhances our free cash flow profile and presents attractive future opportunities for your Company, and we look forward to inviting the Empire City staff and guests to the MGM Resorts family.
The move by MGM seems to be marginally pushed by the May 14 Supreme Court decision overturning the Professional and Amateur Sports Protection Act (PASPA) and its desire to get in on which New York and a lot of other countries across the nation are rushing to do: serve a potential sports gambling market.
Including New York, about 18 other countries have either recently passed or introduced sports gambling bills.
The Las Vegas Review-Journal reports in a Tuesday note to customers, Telsey Advisory Group gaming analyst, Brian McGill, communicated that New York state legislators are working to get a bill passed prior to June 20 when the present legislative session adjourns. According to McGill, the bill is very likely to create sports gambling legal in off-track betting facilities, racetracks, cellular devices and country and Native American casinos.
Tuesday’s press release adds that in southern New York, roughly 16 million qualified gaming clients are served by Empire City.
The Review-Journal cites a 2017 Oxford Economics report (pdf) that explains that allowing for a tax rate of under 10 percent and access to online casinos and mobile, as much as $1.2 billion yearly in sports gambling may be produced by New York.
MGM Resorts International hit by New York cancellation
