MGM Resorts Could Lose Out On Casino Licenses In New York City Due To Bookie Scandal: Report

Chances of MGM Resorts International (NYSE: MGM) to win two of the three coveted full-scale casino licenses in New York city has reportedly become complicated after an alleged bookmaking scandal that's unfolding in Las Vegas.

MGM Grand and Resorts World, operators, respectively, of the Empire City Casino in Yonkers and the Resorts World Casino at the Aqueduct Race Track in Queens, had been the frontrunners to win the licenses in a state-run process that's slated to conclude next spring, reported New York Post.

The uncertainty arose after the former head of the MGM Grand casino in Las Vegas, Scott Sibella, was made to step down as president and operating chief of Resorts World.

The report noted Resorts World said Sibella's sudden exit from the company on Friday was "effective immediately" over "failing to disclose certain information required under company policies."

Meanwhile, federal agents are also investigating if employees at MGM Grand, where Sibella was president in 2017 and 2018, had been siphoning off company assets to pay gambling debts to bookie Wayne Nix.

Nix had pleaded guilty in 2022 for operating a a massive, illegal gambling operation and filing false tax returns.

"This is a bigger problem for MGM because they were [allegedly] involved in the conduct," noted the report citing a source. "But Resorts World would need to get rid of the stain."

The report further noted that the news could be good for MGM's rivals in the casino race. Some of the strong contenders include Bally's Corp (NYSE: BALY), Caesars Entertainment Inc (NASDAQ: CZR), Las Vegas Sands Corp (NYSE: LVS) and Wynn Resorts Limited (NASDAQ: WYNN).

Price Action: MGM shares are trading lower by 0.60% at $40.05 in premarket on the last check Tuesday.