And then there were three.
Photo: MGM
MGM unexpectedly withdrew its casino bid on Tuesday, whittling down the competition for the three coveted licenses in downstate New York to just, well, three. The company, which owns the Empire City Casino and Yonkers Raceway, claimed that the abrupt about-face was a financial calculation: The apparent return on building a full-blown casino at a cost of $2.3 billion didn’t look as good as it did when the company submitted its proposal in June. “The competitive and economic assumptions underpinning our application have shifted,” MGM said in a statement.
So, who’s still at the table? Mets owner and hedge-fund titan Steven Cohen, of course, with his $8 billion Metropolitan Park that would install a Hard Rock casino next door to Citi Field in Queens. There’s Genting’s Resorts World, which is looking to add live table games to its existing gambling operation in Queens, to the tune of $5.5 billion. And Bally’s is looking to spend $4 billion on building a gambling facility on top of the former Trump Golf Links in the Bronx — which would mean a $115 million payout to the president. This caught the attention of Yonkers’s mayor, Mike Spano, who had supported MGM’s bid for a full-license casino and called for Governor Kathy Hochul to investigate the company’s change of heart. “The reasons MGM gives for its 180-degree reversal just don’t add up,” Spano said, suggesting that perhaps the Las Vegas–based company was trying to sweeten up to Donald Trump by clearing the way for Bally’s to win a license. “The people of Yonkers deserve to know if this process was tainted or manipulated in any way,” he said.
MGM was long seen as a favorite in the race, owing to the fact that, like Resorts World, it was already running a gambling operation with video slots and horse racing. Its proposed $2.3 billion investment, however, was quite puny compared to the rest, and its plans didn’t even include a hotel. (Where else are blackjack winners expected to roll around in their cash or, you know, weep in panic over their losses?)
In its statement on the move, MGM wrote that the state Gaming Commission’s newly issued guidance that the duration of each casino license would be based on the size of the bidder’s proposal had changed its calculus. (The company believes it would likely receive only a 15-year license, versus the 30-year permit it had anticipated.) The concentration of nearby competition — including the Bally’s project, which would be less than a 25-minute drive from MGM’s operation — didn’t seem to help. “The newly defined competitive landscape — with four proposals clustered in a small geographic area — challenges the returns we initially anticipated from this project,” per the statement.
The existing pool, small as it is now, comes after all three contenders in Manhattan were blocked by community advisory committees, which is also what happened to a plan to put a casino along Surf Avenue on Coney Island. And even though we’ve now got three bidders vying for three licenses, there is still some suspense: The Gaming Commission could ultimately choose to award less than three — even zero. That’s gambling for you, I guess.