On a pivotal Thursday morning, MGM Empire City emerged victorious by securing the first approval from the community advisory committee (CAC) for a coveted downstate casino license in New York. This marks a significant milestone as the proposal was unanimously passed with a 5-0 vote, after three prior bids had faltered.
Following this breakthrough, MGM Empire City will now proceed to the next phase, which involves scrutiny by the state’s Gaming Facility Location Board (GFLB). This board is tasked with conducting a comprehensive review process, with their recommendations for issuing up to three casino licenses expected by December 1. Simultaneously, the state gaming commission aims to finalize the distribution of commercial licenses by December 31, thereby setting the stage for potential gaming expansion in the region.
Historically, racinos such as MGM and Resorts World NYC have been viewed as frontrunners in this competitive race. Their well-established operations, substantial tax contributions, and significant community interactions have bolstered their appeal to decision-makers. MGM, which initially began operations as Yonkers Raceway, has been functioning as a video lottery terminal since 2006, which reinforced its credibility and operational prowess in the eyes of the committee.
Yet, the discussions did not shy away from addressing competitive dynamics. Of the eight proposals reviewed by the CAC, MGM’s stood out for its unique positioning outside New York City. In its proposal, MGM underscored the necessity of obtaining a full casino license to ensure its continued viability, particularly with the looming prospect of three additional commercial casinos potentially setting up shop nearby.
This argument found resonance with key figures on the committee, notably CAC Chairman James Cavanaugh. He underscored the pivotal nature of securing the license for the future sustainability of Empire Casino. Appointed by Yonkers Mayor Mike Spano, Cavanaugh articulated concerns that without one of these vital licenses, the prospects for the Yonkers facility appeared bleak. Patrons, he suggested, would naturally gravitate towards newer, more modern casino experiences over an aging slot hall.
The pathway to securing the license is not yet complete, with MGM now required to pay a $1 million application fee to proceed further. The subsequent phase managed by the GFLB will dive into a detailed evaluation based on specified criteria. This includes a rigorous analysis of the revenue implications of each proposal, factoring in the potential impact on existing operations and anticipated new ventures. Bidders have been tasked with providing forward-looking revenue projections, which consider the number and geographical distribution of licenses that may be awarded.
Beyond revenue aspects, the GFLB will conduct an assessment across four critical pillars: Economic Activity and Business Development (70%), Local Impact Siting (10%), Workforce Enhancement (10%), and Diversity Framework (10%). These dimensions are crucial for determining which projects will be most beneficial to the state’s socio-economic landscape.
A particularly intriguing facet of this process, as humorously noted by MGM CEO Bill Hornbuckle at a recent industry gathering, is the flexibility given to applicants in proposing their own tax rates. The baseline starts at 25% for slot revenue and 10% for other gaming types. However, with current video lottery terminal tax rates hovering around a substantial 55%, Hornbuckle acknowledged that MGM would likely need to align with this threshold to remain competitive, while also fulfilling their horse racing purse commitments.
Despite the optimism surrounding MGM’s progress, there are alternative perspectives in the discourse. Some industry analysts caution that the move to approve casino licenses outside New York City could diffuse the market, potentially affecting existing operations adversely. They argue that saturation could lead to diminishing returns for all parties involved, posing long-term sustainability challenges.
Moreover, questions linger about whether the expansion of casinos aligns with broader community interests. As one concerned voice from the neighborhood remarked: “While the promise of economic growth is enticing, it’s crucial to remain vigilant about the social implications that often accompany gambling hubs.”
As the December deadlines approach, all eyes remain on the GFLB and their impending recommendations. The stakes are high, with potential economic growth and job creation on the horizon. For MGM Empire City, this approval represents not only an opportunity to expand its footprint but also a chance to redefine its legacy within the gaming industry. The coming months will be critical in shaping the future of casino gaming in New York, with each development closely watched by stakeholders across the spectrum.
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