Resorts World Catskills’ owner has now officially confirmed its decision to say Yes to Genting Malaysia’s earlier offer to purchase the remaining interest of the casino complex. This would make the newest casino resort in Upstate New York part of the Genting rich portfolio, due to the financial struggled Empire Resorts has been experiencing over the past months.
A purchase like this one equals an entirely new era for the local gaming field. The past few weeks have been quite uncertain for Upstate New York’s casino scene, as Empire Resorts admitted it has financial struggles with its new casino venue near Monticello in Thompson.
At the early stages of this transition, the casino resort operator made it clear that it is considering filing for voluntary bankruptcy, as it is unable to cover its swelling debt. The only thing that had the potential to alleviate the tough situation was financial help from a third party.
Financial Support Part of the Deal
This is where Genting Malaysia and Kien Huat Realty entered the picture with a suggestion. Genting is already a majority owner at the casino resort, so it simply offered to purchase the remaining interest in the property. As a result, Empire Resorts could now go private and no longer worry about the financial struggles it has been facing ever since February 2018 when the resort launched.
Projections for the casino resort were high prior to the official launch and some US$1.2 billion was poured in its construction. Reality could not meet the initial expectations, especially evident by the latest Securities and Exchange Commission filing.
It showed concerning figured reaching a US$36 million loss in the second quarter of 2019, in addition to US$37 million loss in the first three months of this fiscal year.
Such a performance has been concerning for the casino operator, but for some time it did not voice its worries. Field cannibalization has been the main reason for this slump, a possibility that has been eyed ever since casino expansion launched in 2013.
Resorts World New York Could Help Too
In order to stay afloat, the casino resort had to go private, as Empire Resort is a public company. Ryan Eller, president of the casino operator pointed out that the purchase could guarantee better days for Resorts World Catskills, which would have better financial support to rely on in times of need.
He also stated that the premium facility has a lot up for grabs facility-wise that would attract more casino patrons and tourists down the road. Genting Malaysia would pay US$9.74 per share for the remaining 15 percent of the property. In addition to that, it poured some US$77 million, projected to cover the swelling Empire Resorts debt. The purchase deal is projected to close by the end of 2019.
The new management takes over the casino resort offering reliable employment to as many as 1,000 individuals. No changes to the staff have been projected. Ed Farrell, President of Genting Americas, stated that Resorts World New York could drag the Monticello property out of the mud, leading to a happy end to the horror story.