PETALING JAYA: The chances of Genting Malaysia Bhd
’s Resorts World New York City (RWNYC) securing a licence is now very high, following MGM Empire City’s withdrawal, says CIMB Research.
MGM has withdrawn its application for a Downstate New York (DNY) full casino licence, ahead of the Oct 15 submission deadline to the New York Gaming Facility Location Board.
MGM cited shifting economic and competitive conditions, with four proposals clustered in a small geographic area challenging the returns it initially anticipated from the project.
It also said its bid was based on a 30-year licence, but newly issued guidance from the state suggested only a 15-year permit would be granted.
“MGM’s withdrawal means there are now only three remaining applicants (RWNYC, Metropolitan Park, Bally’s) for up to three DNY full casino licences.
“While it is still possible the Gaming Commission may issue less than three licences (or even none, although we think this is highly unlikely), the chances of RWNYC securing a licence are now very high, in our view,” CIMB Research said in a report yesterday.
It said in RWNYC’s application to the Board, it offered US$600mil for a 30-year licence (US$100mil more than the minimum required) and 56% and 30% tax rates for slots and table games, respectively.
The slots/table games tax rates are higher than what CIMB Research expected (40%/10%), but this is mitigated by two key factors.
Firstly, RWNYC has included a caveat in its offer stating that its gaming tax rates should be reduced (to level the playing field), if other DNY full casino licensees pay lower gaming tax rates.
“On this front, Metropolitan Park has offered to pay US$500mil for a 30-year licence and only 25%/10% tax rates for slots/table games, respectively (for example, the minimum required), while Bally’s offer is currently unknown (as details were redacted from its application materials).
“Second, if RWNYC secures the licence, it will be the only DNY full casino licencee for at least four years (given MGM’s withdrawal), allowing it to reap maximum gross gaming revenue during the period,” the research house said.
CIMB Research said MGM’s withdrawal has come as a surprise to many given that it previously said publicly that Empire City Casino cannot survive if other casino operators win the licence and it does not.
“However, the press highlighted that MGM’s chief executive officer had hinted at a possible exit at a banking conference in early September 2025, where he baulked at the idea of tying capital investment to licence terms and also said his property had to match its current 55% tax rate for the new licence,” the research house said.
Furthermore, MGM also has ongoing projects in Japan and Dubai and is remodelling its MGM Grand property in Las Vegas.
