The fourth New York casino vote was the charm for MGM Empire City Thursday morning, as it became the first bidder for a downstate licence to win approval from its appointed community advisory committee (CAC).
All three previous bids to be voted upon by local committees were rejected, but Empire City went through on a unanimous 5-0 vote.
It will now move on to the next round under the state’s Gaming Facility Location Board (GFLB). That board will start a fresh round of consideration, with a deadline of 1 December to make recommendations on awarding up to three casino licences. The commercial licences will be awarded by 31 December by the state gaming commission.
There has been consensus opinion that the bids from two racinos, MGM and Resorts World NYC, were particularly strong candidates. This was due to their existing facilities, history of tax contributions and longstanding community ties. MGM is the former Yonkers Raceway and has operated as a video lottery terminal facility since 2006.
Despite these strengths, competitive concerns also played a factor for MGM. Of the eight proposals that made it to the CAC process, MGM is the only one outside New York City. The company said in its application that a full licence was necessary for survival, as it could not compete if three other commercial casinos opened nearby in the future. This argument appeared to hold a lot of sway with the committee.
“If Yonkers does not get one of the three full casino licences, Empire Casino will wither and die,” said CAC Chairman James Cavanaugh, before voting yes. He added that no one would choose to visit “an aging slot parlour” over a full-service casino. Cavanaugh was appointed to the CAC by Yonkers Mayor Mike Spano, the project’s biggest supporter.
What’s ahead for the GFLB process?
Now that MGM has cleared the CAC phase, it must pay a $1 million application fee to the state. Then the GFLB, made up of four appointed members, will evaluate the project under a range of criteria. Board members are as follows:
- Vicki Been, chair: Appointed 2022, professor at NYU School of Law
- Terryl Brown: Appointed 2025, vice president/general counsel at Pace University
- Marion Phillips III: Appointed 2025, SVP of community development, DEI at US News and World Report
- Greg Reimers: Appointed 2025, retired finance executive
The first consideration will be each project’s revenue impact. This involves analysis of “the revenue impact of each applicant’s proposed gaming facility on existing facilities and potential new facilities”, per the board’s website. As part of the request for applications, bidders had to provide projections based on how many licences are awarded and where.
Additionally, each project will be evaluated based on four weighted categories:
- Economic Activity & Business Development (70%)
- Local Impact Siting (10%)
- Workforce Enhancement (10%)
- Diversity Framework (10%)
Another “quirk” of the process, as MGM CEO Bill Hornbuckle joked at a recent conference, concerns taxes. Bidders are asked to pitch their own tax rates, so long as they start at 25% for slot revenue and 10% for all other gaming revenue. However, existing VLT tax rates are about 55% and Hornbuckle said MGM is expected to at least match that level while also maintaining its existing horse racing purse commitments.
MGM first to have amendments accepted
Unlike the first three CACs that voted, the MGM committee was the first to accept amendments submitted by the bidder. Backers of all three rejected proposals made submissions within days before their votes, while MGM’s was filed on 17 September. A week’s worth of deliberation appeared to bear fruit, as the amendments were accepted unanimously.
The only CAC that has requested changes from its bidder was the committee reviewing Bally’s Bronx. In that case, Bally’s did submit a response to the litany of requests, and it now faces a vote at 10am on Monday. The Coney, meanwhile, has filed a flurry of amendments despite at least three members making public their plans to oppose it. Resorts World and Metropolitan Park have not filed any amendments.
MGM’s approved amendments include additional safety and infrastructure commitments, a minimum city revenue requirement that starts at the rate of existing contributions, reimbursing the city for construction costs and other concessions.
MGM Empire City will advance to state consideration for a full casino licence after winning approval from its appointed committee.