MGM Resorts International has withdrawn its application for a commercial casino license in Yonkers, New York. The move marks a change in the company’s plans to expand its Empire City Casino with a $2.3 billion investment aimed at renovation and growth.
Evolving competitive and economic conditions, along with changes in state licensing guidelines, influenced MGM’s decision. Initially expecting a 30-year casino license, MGM was notified the license term would be limited to 15 years.
Key takeaways:
- MGM Resorts pulls out of Yonkers casino license application due to licensing term changes
- Company remains committed to existing operations amid evolving competition
- Remaining contenders for New York City region licenses advance toward decision
MGM Reassesses Casino License Application Strategy
This reduction in license duration impacted the anticipated return on investment and ultimately led to the company’s withdrawal from the competitive licensing process.
“Since submitting our application in June, the competitive and economic assumptions underpinning our application have shifted, altering our return expectations on the proposed $2.3 billion investment.” MGM Resorts said in a press release.
Despite stepping back from the casino license application, MGM said it remains committed to operating Empire City Casino in its current form, continuing to serve the Yonkers community and nearby areas.
With MGM’s exit, three applicants remain contenders for up to three casino licenses to be awarded in the New York City region: Genting Group, Bally Interactive and a joint venture between Steve Cohen and Hard Rock International. State officials are to decide on the licenses by the end of the year, a decision that will influence the region’s gaming industry dynamics.
Financial Outlook and Competitive Pressures
MGM Resorts has demonstrated robust revenue growth, with a 40.9 percent increase over the past three years, according to GuruFocus. However, the company carries a high debt load, reflected in a debt-to-equity ratio of 10.5. Its Altman Z-Score of 0.76 indicates a degree of financial distress risk.
Profit margins and stock volatility suggest areas for operational improvement and investor caution. Insider selling activities, combined with a price-to-earnings ratio of 17.83 and analyst price targets near $47.70, point to a complex valuation outlook amid sector cyclicality and operational uncertainties.
