MGM Resorts International has abruptly pulled out of the heated competition to operate a full-scale casino near New York City, considered one of the last, major untapped gambling markets in the United States.
In a statement released on Tuesday afternoon, the company said it was no longer certain it could earn as much money as it had hoped by operating a casino in Yonkers, just north of New York City.
“The competitive and economic assumptions underpinning our application have shifted,” the statement read.
MGM also blamed the state for its withdrawal, saying that a recent change in guidelines meant its proposal would likely be offered only a 15-year license instead of a 30-year one.
Now that MGM has dropped out, just three teams remain in the running for as many as three casino licenses that New York State is poised to award by the end of this year.
Steven A. Cohen, the owner of the New York Mets, is proposing to build a Hard Rock casino near the team’s stadium in Queens. Resorts World, which is owned by Genting, a Malaysian gambling company, wants to expand its existing electronic games parlor into a full-scale casino, also in Queens. And Bally’s wants to build a casino at the Bronx foot of the Whitestone Bridge, in a deal that would ultimately result in a $115 million payout to the site’s former landlord, the Trump Organization.
The fact that only three bidders remain for three licenses does not mean all three are shoo-ins.
“There has never been a requirement that all three licenses be issued,” said Lee Park, a spokesman for the New York State Gaming Commission, which controls the siting process. “It could be zero, one, two or three licenses that are issued in this process.”
The rationale for allowing casino gambling in and around New York City was always to drive more revenue to New York State, which is projecting significant budget deficits in the years ahead. The winners in the bidding process will have to pay a licensing fee of at least $500 million, and a significant portion of their proceeds in taxes.
There was a time when the field of candidates vying for a license was much more expansive, geographically and otherwise. There were proposals to build casinos in Coney Island in Brooklyn, in Nassau County on Long Island, and even in and around Times Square.
Each of those proposals fell by the wayside amid strong neighborhood opposition, and four remained, including, unexpectedly, the Bally’s bid, which had made it through a gantlet of local approvals thanks partly to the intervention of Mayor Eric Adams.
The Bally’s site, on a golf course it acquired from the Trump Organization, is a 20-minute drive from MGM’s existing electronic games parlor, at a horse track in Yonkers.
“The newly defined competitive landscape — with four proposals clustered in a small geographic area — challenges the returns we initially anticipated from this project,” said the company’s statement.
The state law authorizing casino licenses allows for terms of 10 to 30 years, based on the size of the applicant’s investment.
MGM’s bid was not a particularly sizable one compared to its peers.
The company was promising to invest $2.3 billion into the project, compared with the $5.5 billion Resorts World was proposing to put into its Queens property; the $8 billion Mr. Cohen’s bid with Hard Rock was promising to invest into a casino next to his stadium; and the $4 billion Bally’s was proposing to put into a facility in the Bronx.
MGM announced in 2018 that it was purchasing the Yonkers Raceway and the so-called racino that operates alongside it, Empire City Casino, in anticipation of bidding for a full-scale casino license.
Bennett Liebman, a government lawyer in residence at Albany Law, said he found MGM’s timing “astonishing,” given how much it had invested in the bidding process and the state’s plan to pick licensees in less than three months.
“If they had gotten out early, I might understand this,” Mr. Liebman said. “But having waited until the middle of October, is just, it’s just mind-boggling.”
Dana Rubinstein covers New York City politics and government for The Times.
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