Monticello – Empire Resorts reported steep losses in 2008 at its struggling Monticello racino, and company officials now say that bankruptcy could be looming.
The owner of the Monticello Gaming & Raceway reported a net loss applicable to common shares of USD 12.2 million for 2008, compared with a loss of USD 26.2 million in 2007.
Empire executives say the company’s immediate future is in the hands of its creditors. The company is required to pay an outstanding balance of about USD 7.15 million to the Bank of Scotland by May 29.
In its annual report to the Securities and Exchange Commission, the company wrote that „these factors … raise substantial doubt about our ability to continue as a going concern.“
The company’s total net revenues decreased about USD 8.4 million or 11 percent from 2007. Racino revenue decreased USD 6.2 million, or 10 percent, while racing revenue decreased by USD 1.8 million, or 22 percent.
Empire is blaming competition from a racino in Yonkers and casinos in Pennsylvania for a nearly 20 percent drop in attendance last year.
Empire also reported that its partnership with Concord owner Louis Cappelli, on which the company had staked its future survival, is now unclear. Empire and Cappelli are giving conflicting reports about where the Entertainment City project, which includes building a racino and harness track on the Concord property, is heading.
On Monday, Empire’s stock plunged to new lows, closing at 40 cents per share, down from 88 cents.
CEO Dave Hanlon said the company will avoid bankruptcy if bondholders don’t call in the notes.
„Worst-case scenario is that we do not come to an accommodation with the bond holders,“ Hanlon said. „They would force us to go into a bankruptcy mode,“
But Hanlon said that even if the company were to declare Chapter 11 this summer, it would mean a reorganization.