Empire Resorts, the owner of Resorts World Catskills, has agreed to sell all remaining shares of its stock to Malaysian investors who already own 86% of the resort. Kien Huat and Genting Malaysia will seal the deal and take over the ailing casino resort later this year.
Continuous Losses and Debt
Located in the town of Thompson, near Monticello, Resorts World Catskills has not been able to meet its financial goals, and is seriously in debt. Parent company Empire Resorts, which also owns the Monticello Raceway harness track, has reported losses of $73 million in the first half of this year. After accumulating $400 million in debts, the topic of bankruptcy was bantered about the boardrooms.
Instead of closing the company’s prime casino asset, Empire Resorts agreed to sell out to Kien Huat and Genting Malaysia, which already holds an 86% stake in the resort. Empire announced it would sell the remaining stock for $9.74 per share to Kien Huat/Genting. Once the purchase is completed in the 4th quarter of this year, the company will be privately held and no longer publicly traded.
Resorts World is one of several properties in the Catskills area of upstate New York; all of which are struggling financially. Opening in 2018 at a cost of $1.2 billion, Resorts World is the largest of 4 Vegas-style mega-resorts to open in the Catskills. The others are Del Lago Resort & Casino near Waterloo, Rivers Casino & Resort in Schenectady, and Tioga Downs in the Southern Tier.
Bye Bye Borscht Belt
Resorts World stands on the site of the former Concord Hotel, once the largest resort in the Catskills. The Catskills area in upstate New York was a popular resort area for city dwellers seeking refuge from the Metropolis. Back in its heyday it was called the Borscht Belt or Jewish Alps, due to the large number of Eastern European immigrants and New York City Jews who flocked to the area for vacation.
What began as a Yiddish theater company and Orthodox Jewish campground in the 1920s rapidly became a hotbed of talent, playing host to many major comedians who got their start there. Comedy legends like Woody Allen, Rodney Dangerfield, Billy Crystal, Andy Kaufman, and Jerry Seinfeld all got their start playing in the Catskills. Jerry Lewis worked as a busboy while his parents worked on their vaudeville act. Now we know why Jerry loved all those kooky bellhop and busboy characters.
This ‘Hollywood of New York City’ had its Golden Age, but the Catskills fell on hard times in the 80s. Recent efforts to revitalize the region by building Vegas-style mega-resorts has not come to fruition, as most of these betting behemoths haven’t shown a profit.
Whether it’s down to competition from all the tribal casinos in the region, or giant gambling magnets like Encore Boston Harbor sucking all the action, one thing seems to be clear. Casinos rise and fall, then, like the proverbial Phoenix, will one day rise again.
Analysis
It’s a shame such a historical entertainment mecca is falling on hard times. Having an old Borscht Belt heyday hotel destroyed and rebuilt in the image of Vegas might be troubling. When Rat Pack haunts like the original Sands were destroyed, it was the end of an era for some.
But when you have prime casino real estate, change is inevitable. There’s no way today’s Millennials would be happy hanging out in a musty Catskills vaudeville theater, so out with the old, in with the new. They’ve done it for ages in Las Vegas, and now they’re trying out that business model on a global scale. Sometimes it works, sometimes it doesn’t.
And when the chips are down, the business world is all one big gamble in the end. But casino moguls never die, they just reincarnate in another form, maybe hiding under an Umbrella Corp or something. While Vegas cowboys like Adelson are stretching their global casino reach into Asia (Sands Macao), it’s nice to know that Asian investment groups are following suit.
As long as those Malaysian investors don’t build one of those massive Kuala Lumpur twin towers in the region. That would be too soon. We’re still suffering from the loss of our beloved twin towers in NYC.
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