MGM Resorts International, through the company’s real estate investment arm, MGM Growth Properties (MGP) said Tuesday it has reached an agreement to acquire Empire City Casino's Yonkers Raceway and casino just outside of New York City for total consideration of $850 million.
MGP will acquire the developed real property associated with Empire City from MGM Resorts and lease it back to one of its subsidiaries. MGM Resorts will subsequently operate the complex.
MGM Resorts will pay an extra $50 million if Empire City wins a license for live table games on or before Dec. 31, 2022 and MGM Resorts accepts that license by Dec. 31, 2024. "With Empire City's approximately 40% share of gross gaming revenues in the market, we believe there are significant opportunities for MGM Resorts to further drive growth," MGM Resorts Chief Financial Officer Dan D'Arrigo said in a statement.
He added, "We believe the transaction will be value-accretive within its first year of closing, with incremental revenue synergies expected to support growth in 2020 and beyond."
Jim Murren, Chairman and CEO of MGM Resorts International, said, "We are excited to announce the addition of Empire City to the MGM Resorts portfolio." This acquisition represents an excellent opportunity to further solidify our presence on the East Coast, and in particular, expand our reach into the high-density New York City region. We believe this transaction enhances our free cash flow profile and presents attractive future opportunities for the Company, and we look forward to welcoming the Empire City team and guests to the MGM Resorts family."
Yonkers Raceway was established in 1899 as the Empire City Race Track. The family of Art Rooney, the Pittsburgh Steelers legendary owner, has owned the track since 1972. The track added slot machines in 2006. In 2015, the casino added automated Blackjack, Craps, Roulette and Baccarat.