October 1 Lawsuit Could Jeopardize MGM’s New York Casino Purchase

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A New York state senator is attempting to block MGM Resorts International from purchasing a racino in the Empire State. State Sen. Shelley Mayer, a Democrat from Yonkers, says that MGM’s lawsuit against shooting victims indicates that the company does not belong in her area.

“They should withdraw the lawsuit if they want to proceed, if they want to be in our community,” Mayer told the New York Daily News.

MGM is seeking to purchase the Empire City Casino and Yonkers Raceway for $850 million. The company hoped to close the deal by Q1 2019. It would be MGM’s only property in New York.

However, the deal is subject to New York State Gaming Commission approval. Mayer hopes that her voice and the voices of New York residents affected by the attack will stop the deal in its tracks.

Lawsuit is a massive headache for MGM

On Oct. 1, 2017, Stephen Paddock opened fire from his hotel room at the MGM-owned Mandalay Bay Hotel and Casino into a large crowd of concertgoers below. Fifty-nine people died in the attack, including Paddock.

In an effort to head off a slew of lawsuit threats, MGM controversially countersued any victims who announced they were considering legal action. The casino giant sought to limit its liability in the matter.

However, the public outcry over the lawsuit has severely damaged the company in the court of public opinion. Family members, lawmakers, and media members from both sides of the political spectrum have criticized MGM for its seemingly callous maneuver.

In the lawsuit, MGM named 11 New York residents. Several of them, like Michelle Torrente, echoed Mayer’s calls to stop the deal.

“My first reaction was how can you do this to people who have already gone through so much,” said Torrente. “There’s other companies, (and) I don’t think I would ever do any kind of business with them.”

Torrente was not shot during the attack. However, she suffered minor injuries and emotional distress in the ensuing panic.

MGM CEO Jim Murren addressed the suit during a recent press conference about the company’s NBA sports betting deal. He clarified the intent was never to get money from victims:

“We’re not looking for monetary damages. We’re not looking to harm anyone, in fact, we would like to see those affected compensated as soon as possible.”

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Empire City deal critical to MGM’s plans

A delay or rescission of the deal would be devastating to MGM’s plans. MGM’s activities in the last few weeks have highlighted how important expansion is to the company.

The main issue for MGM is the sports betting potential. New York already has legalized sports betting at its upstate commercial casinos, regulations are just still in development. There are still efforts to expand wagering to racino properties like Empire City though.

MGM cannot offer sports betting without a valid license to operate in the state of New York. For all its new partnerships in the last two weeks, MGM has no access or footing in New York beyond this deal.

As a result, one of the largest gaming companies in the world could find itself shut out or delayed from one of the most-populous states. The $230 million in annual revenue from the Empire City Casino wouldn’t hurt, either.

A spokesman for the NYSGC maintained that the commission had not reached a verdict on the deal. However, he confirmed that an examination of the lawsuits would be part of the process.

“This is not a good way to begin their relationship with Yonkers, or frankly, the victims of gun violence,” Mayer said. “I think there should be a frank conversation about this (before the sale is approved) and that MGM should withdraw its action.”

Bart Shirley

About

Bart Shirley is a writer and poker player from Houston, Texas. When he's not teaching high school math and business, Bart writes about the NJ online casino industry and US online poker. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M.