Amid growing competition from the newly introduced table games at Resorts World New York, the Empire City Casino, owned by MGM Resorts International (NYSE: MGM), is performing admirably.
In a recent report to clients, Jefferies analyst David Katz highlighted that Empire City experienced a remarkable 4.5% year-over-year increase in its second-quarter gross gaming revenue (GGR)—a noteworthy achievement considering the launch of table games at Genting-operated Resorts World New York in Queens back in April.
Katz remarked, “Empire City achieved this growth despite Resorts World launching table games in April, with GGR at that location surging by 61.9% during April and May of the quarter. Both venues cater to the broader NYC market, and the proximity of approximately one hour between them allows for sustained concurrent growth.”
Empire City and Resorts World were both viewed as prime contenders for the three downstate casino licenses awarded in New York. However, MGM took the surprising step to withdraw from the competition last October, choosing to keep Empire City as a slots-only gaming establishment.
The Significance of Empire City’s Strength
Empire City’s GGR growth in the second quarter is impressive under any circumstances, but it carries even more weight given the intensified competition posed by the table games at Resorts World.
On the topic of increased competition, two additional casinos—Hard Rock in Queens and Bally’s in the Bronx—are in the pipeline, although they won’t open for several years. These establishments are, on average, about a 22-minute drive from Empire City, intensifying the competitive landscape.
Considering Resorts World’s successful transition to table games and the resilience displayed by Empire City, it appears both venues may continue to prosper even as new competitors enter the New York market.
Katz added, “We believe both properties can grow further within the market ahead of two more NYC commercial casinos projected to open in 2030.”
Kansas City Casinos Need a Boost
Examining developments in other regional markets, Katz noted that Caesars Entertainment’s (NASDAQ: CZR) three casinos in the Kansas City area saw a decline in second-quarter GGR, primarily due to struggles at Harrah’s and Horseshoe St. Louis.
Nearby Harrah’s Kansas City faces fierce competition with four rival venues within a 15-minute drive, highlighting the market’s competitiveness. As Caesars approaches acquisition by Tilman Fertitta, discussions about potential asset sales are surfacing, though interest in the Kansas City market may be limited. Katz pointed out that the public operators, which include Caesars, Boyd Gaming (NYSE: BYD), and Penn Entertainment (NASDAQ: PENN), have not invested significantly in their local properties.
“The Kansas City market has not experienced notable recent capital investment, indicating that a property upgrade by any of the public operators could provide an incremental benefit,” concluded the analyst.