10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________ 

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2018

OR

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from              to

Commission file number 1-12522

_______________________________________ 

EMPIRE RESORTS, INC.

(Exact name of registrant as specified in its charter)

Delaware	13-3714474
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
c/o Monticello Casino and Raceway, 204 State Route 17B, P.O. Box 5013, Monticello, NY	12701
(Address of principal executive offices)	(Zip Code)

(845) 807-0001

Registrant’s telephone number, including area code

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	x
Non-accelerated filer	¨	Smaller reporting company	¨
		Emerging growth company	¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)     Yes  ¨    No  x

As of November 7, 2018, there were 32,717,491 shares of the registrant’s common stock outstanding.

INDEX

PART I	FINANCIAL INFORMATION	1
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
	Condensed Consolidated Balance Sheets as of September 30, 2018 and December 31, 2017	1
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three-Month and Nine-Month Periods Ended September 30, 2018 and 2017	2
	Condensed Consolidated Statements of Cash Flows for the Nine-Month Periods Ended September 30, 2018 and 2017	3
	Notes to Condensed Consolidated Financial Statements	4
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	32
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	32
ITEM 4.	Controls and Procedures	32
PART II	OTHER INFORMATION	32
ITEM 1.	Legal Proceedings	32
ITEM 1A.	Risk Factors	32
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
ITEM 3.	Defaults Upon Senior Securities	32
ITEM 4.	Mine Safety Disclosures	32
ITEM 5.	Other Information	32
ITEM 6.	Exhibits	33
SIGNATURES		34

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PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)(Unaudited)

	September 30,			December 31,
	2018			2017
Assets
Current assets:
Cash and cash equivalents	$	18,390		$	10,380
Restricted cash	502			693
Accounts receivable, net	10,843			1,273
Inventories	2,418			174
Prepaid expenses and other current assets	5,619			3,376
Total current assets	37,772			15,896
Property and equipment, net	659,737			26,863
Capitalized Development Projects costs	19,544			566,797
Restricted cash and investments for Development Projects	64,178			136,431
Intangible asset, net	46,794			51,000
Cash collateral for deposit bond	—			35,000
Other assets	3,307			251
Total assets	$	831,332		$	832,238
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable	$	10,195		$	2,686
Current portion of long-term debt	28,118			14,588
Accrued Development Projects costs	27,945			71,712
Accrued expenses and other current liabilities	33,941			7,320
Total current liabilities	100,199			96,306
Long-term loan, related party, net of debt issuance costs	20,064			—
Long-term debt, net of current portion	518,645			455,148
Other long-term liabilities	7,555			9,463
Total liabilities	646,463			560,917
Stockholders’ equity:
Preferred Stock, 5,000 shares authorized; $0.01 par value
Series B, $29 per share liquidation value, 44 shares issued and outstanding	—			—
Common stock, $0.01 par value, 150,000 shares authorized, 32,717 and 32,560 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively	327			326
Additional paid-in capital	577,736			572,342
Accumulated other comprehensive loss	(89		)	(315		)
Accumulated deficit	(393,105		)	(301,032		)
Total stockholders’ equity	184,869			271,321
Total liabilities and stockholders’ equity	$	831,332		$	832,238

The accompanying notes are an integral part of these consolidated financial statements.

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except for per share data) (Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Revenues:
Gaming	$	47,381		$	17,833		$	115,706		$	46,956
Racing	1,368			1,438			3,926			4,161
Food and beverage	6,452			794			13,593			1,892
Room	2,826			—			5,285			—
Other	1,921			267			4,096			731
Gross revenues	59,948			20,332			142,606			53,740
Less: Promotional allowances	—			(1,619		)	—			(3,072		)
Net revenues	59,948			18,713			142,606			50,668
Operating costs and expenses:
Gaming	35,737			12,739			91,547			34,384
Racing	2,223			1,312			5,948			3,771
Food and beverage	7,526			1,136			17,108			3,174
Room	2,662			—			5,622			—
Other	43			54			154			215
Selling, general and administrative	19,754			4,730			44,787			14,158
Development Projects	452			5,196			12,084			13,881
Amortization of gaming license	1,577			—			4,206			—
Depreciation	7,864			390			20,325			1,115
Total operating costs and expenses	77,838			25,557			201,781			70,698
Loss from operations	(17,890		)	(6,844		)	(59,175		)	(20,030		)
Interest expense	(15,932		)	(4,833		)	(33,385		)	(16,546		)
Interest income	106			805			635			2,337
Loss before income taxes	(33,716		)	(10,872		)	(91,925		)	(34,239		)
Income tax provision	—			—			—			—
Net loss	(33,716		)	(10,872		)	(91,925		)	(34,239		)
Dividends on Preferred Stock	(32		)	(32		)	(96		)	(96		)
Net loss applicable to common stockholders	$	(33,748	)	$	(10,904	)	$	(92,021	)	$	(34,335	)
Weighted average common shares outstanding:
Basic	32,689			30,973			32,653			30,975
Diluted	32,689			30,973			32,653			30,975
Loss per common share:
Basic	$	(1.03	)	$	(0.35	)	$	(2.82	)	$	(1.11	)
Diluted	$	(1.03	)	$	(0.35	)	$	(2.82	)	$	(1.11	)
Comprehensive loss:
Net loss	$	(33,716	)	$	(10,872	)	$	(91,925	)	$	(34,239	)
Other comprehensive gain (loss):
Unrealized income (loss) on Interest Rate Cap	39			(99		)	226			(489		)
Comprehensive loss	$	(33,677	)	$	(10,971	)	$	(91,699	)	$	(34,728	)

The accompanying notes are an integral part of these consolidated financial statements.

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)(Unaudited)	Nine Months Ended September 30,
	2018			2017
Cash flows provided by (used in) operating activities:
Net loss	$	(91,925	)	$	(34,239	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	20,325			1,115
Amortization of gaming license	4,206			—
Amortization of debt issuance costs	3,143			3,955
Net recovery of doubtful accounts	(17		)	—
Non-cash interest expense	334			2,794
Loss on disposal of property and equipment	—			42
Stock-based compensation	2,042			2,213
Changes in operating assets and liabilities:
Accounts receivable	(9,553		)	(138		)
Inventories	(2,244		)	(4		)
Prepaid expenses and other current assets	(2,242		)	601
Accounts payable	7,509			(195		)
Accrued expenses and other current liabilities	26,087			170
Net cash used in operating activities	(42,335		)	(23,686		)
Cash flows provided by (used in) investing activities:
Purchase of property and equipment	(932		)	(1,823		)
Capitalized Development Projects costs	(148,783		)	(201,405		)
Refund/(payment) of cash collateral for deposit bond	35,000			(20,000		)
Net change in investments for Development Projects	94,450			(189,845		)
Other	13			8
Net cash used in investing activities	(20,252		)	(413,065		)
Cash flows provided by (used in) financing activities:
Proceeds from Term B Loan, net of discount	—			441,871
Proceeds from Term A Loan	70,000			—
Proceeds from Revolving Credit Facility	15,000			—
Proceeds from related party long-term loan	20,000			—
Proceeds from related party equity contribution	—			32,000
Proceeds from Bangkok Bank Loan	2,000			—
Principal payments on Term Loan Facility	(5,750		)	—
Principal payments on equipment loans	(7,038		)	—
Series B Preferred Stock dividend payment	(96		)	(96		)
Proceeds from exercise of stock options and option matching rights	50			—
Payment of debt issuance costs and Interest Rate Cap fees	(598		)	(22,878		)
Other payments	(966		)	(275		)
Net cash provided by financing activities	92,602			450,622
Net increase in cash, cash equivalents and restricted cash	30,015			13,871
Cash, cash equivalents and restricted cash, beginning of period	53,055			38,474
Cash, cash equivalents and restricted cash, end of period	$	83,070		$	52,345
Supplemental disclosures of cash flow information:
Cash paid for interest	$	31,934		$	27,710
Non-cash investing and financing activities:
Accrued Development Projects costs	$	27,945		$	75,291

The accompanying notes are an integral part of these consolidated financial statements.

3

EMPIRE RESORTS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note A. Organization and Nature of Business

Overview

Empire Resorts, Inc. (“Empire,” and, together with its subsidiaries, the “Company,” “us,” “our” or “we”) was organized as a Delaware corporation on March 19, 1993, and since that time has served as a holding company for various subsidiaries engaged in the hospitality and gaming industries.

Our indirect, wholly-owned subsidiary, Montreign Operating Company, LLC, doing business as Resorts World Catskills ("Montreign Operating"), owns and operates Resorts World Catskills, a casino resort (the "Casino"), which opened to the public on February 8, 2018. The Casino is located in Sullivan County, New York, approximately 90 miles from New York City. Montreign Operating is the sole holder of a gaming license (a "Gaming Facility License") issued by the New York State Gaming Commission ("NYSGC") in the Hudson Valley-Catskill region, which consists of Columbia, Delaware, Dutchess, Greene, Orange, Sullivan and Ulster counties in New York State.

In addition to the Casino, Empire Resorts Real Estate I, LLC ("ERREI") and Empire Resorts Real Estate II, LLC ("ERREII" and, together with Montreign Operating and ERREI, the "Project Parties"), each of which is a wholly-owned subsidiary of Montreign Operating, are developing an entertainment village (the "Entertainment Project") and a golf course (the "Golf Course Project" and, together with the Casino and the Entertainment Project, the "Development Projects"), respectively, at the site of a four-season destination resort in Sullivan County, New York.

Through our wholly-owned subsidiary, Monticello Raceway Management, Inc. ("MRMI"), we own and operate Monticello Casino and Raceway, which began racing operations in 1958 in Monticello, New York, which is proximate to the Casino. Monticello Casino and Raceway currently features a video gaming machine ("VGM") and harness horseracing facility. We also generate racing revenues through pari-mutuel wagering on the running of live harness horse races, the import simulcasting of harness and thoroughbred horse races from racetracks across the country and internationally, and the export simulcasting of our races to offsite pari-mutuel wagering facilities.

Recent Events

Kien Huat 2018 Preferred Stock Commitment Letter

On November 6, 2018, the Company entered into a letter agreement (the “KH 2018 Preferred Stock Commitment Letter”) with Kien Huat Realty III Limited ("Kien Huat") pursuant to which Kien Huat committed to provide equity financing in support of the general corporate and working capital requirements of the Company and its subsidiaries. Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million (the "Commitment Amount") of Series F Preferred Stock, $0.01par value per share (the "Series F Preferred Stock") of the Company on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and in accordance with the terms of the Certificate of Designations of the Series F Preferred Stock, which the Company filed with the Secretary of State of the State of Delaware on November 5, 2018. Kien Huat committed to purchase the Commitment Amount of the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018, (ii) up to $20 million no earlier than February 15, 2019, (iii) up to $20 million no earlier than May 15, 2019, (iv) up to $15 million no earlier than August 15, 2019, (v) up to $37 million no earlier than November 15, 2019 and (vi) up to $22 million no earlier than March 15, 2020. The Company agreed to use its reasonable efforts to secure third-party financing in an amount equal to the Commitment Amount and the Commitment Amount will be reduced by the amount of any third-party financing raised by the Company. However, any equity financing raised by the Company from any person entering into a commercial agreement relating to online gaming and sports betting at the Casino in an amount up to $29 million will not reduce the Commitment Amount. Kien Huat will be entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat. Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

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Basis for Presentation

The condensed consolidated financial statements and notes as of September 30, 2018 and December 31, 2017 and for the three- and nine-month periods ended September 30, 2018 and September 30, 2017 include the accounts of Empire and its subsidiaries. All intercompany balances and transactions are eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared under the rules and regulations of the Securities and Exchange Commission ("SEC") applicable for interim periods, and therefore do not include all information necessary for complete financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Our financial statements require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent liabilities. Actual amounts could differ from those estimates. These condensed consolidated financial statements reflect all adjustments (consisting primarily of normal recurring accruals) which are, in the Company’s opinion, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for our interim periods may not be necessarily indicative of the results of operations that may be achieved for the entire year.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared on a basis that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Historically and prospectively, our primary sources of liquidity and capital resources have been, and will continue to be, cash generated from operations, borrowings from banks and proceeds from the issuance of debt and equity securities. Based on our current level of operations and our expected results of operations of the Casino and the remaining Development Projects as they are completed,we believe that cash generated from operations and cash on hand, together with amounts available under our principal debt arrangements and the KH 2018 Preferred Stock Commitment Letter will be sufficient to meet the working capital requirements and the expected remaining costs of the Development Projects over the next 12 months. We cannot be certain that our business will generate sufficient cash flow from operations, that our anticipated earnings from the Development Projects will be realized, or that future borrowings will be available under our existing debt arrangements or otherwise to enable us to service our indebtedness, make anticipated capital expenditures and satisfy working capital needs. As a result, we may need to raise additional capital or incur additional indebtedness, including by issuing securities from our Shelf Registration Statement (as defined below), which has a current availability of approximately $333 million, to finance our plans for growth and general corporate purposes. Our future operating performance and our ability to service our debt will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. See “Risk Factors” in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2017 for a discussion of the risks related to our liquidity and capital structure.

Note B. Summary of Significant Accounting Policies

Reclassifications

Certain amounts in the accompanying consolidated financial statements for the 2017 period have been reclassified to conform to presentation in the 2018 period, most notably, amortization of debt issuance costs has been included within interest expense on the Condensed Consolidated Statement of Operations.

Revenue recognition

As described below, the Company adopted the provisions of new accounting standards and updates as codified in the Accounting Standards Codification (ASC) Topic 606 regarding revenue recognition. The Company adopted this guidance as of January 1, 2018 using the modified retrospective approach. Under the modified retrospective approach, amounts presented as of December 31, 2017 and for the three-month and nine-month periods ended September 30, 2017 have not been adjusted to reflect the impact of the ASC Topic 606. This approach does not significantly impact the comparability of the 2018 and 2017 amounts. The promotional allowances recorded in 2017 are no longer presented in 2018 under ASC Topic 606. The adoption of the provisions of ASC 606 resulted in an increase of $54,000 to both “Other accrued liabilities” and “Accumulated deficit” at January 1, 2018. These increases were exclusively the result of remeasuring the loyalty program liability from a deferred cost model to a deferred revenue model. This change only impacts MRMI, since the Casino did not commence operations until February 8, 2018.

The Company’s patron transactions primarily consist of gaming wagers, hotel room and food and beverage purchases. The transaction price for gaming wagers is the difference between gaming wins and losses, not the total amount wagered. The transaction price for hotel room and food and beverage purchases is the net amount collected from the patron for such goods and services. Hotel room and food and beverage goods and services have been determined to be separate, stand-alone transactions and the

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transaction price for such goods or services is recorded as revenue as they are transferred to the patron over the duration of the patron’s stay at the hotel or when the Company provides the food and beverage services. In the case of a hotel stay involving multiple days, the total transaction price of the stay is recognized on a straight-line basis. The Company collects advanced deposits from hotel patrons for future reservations representing obligations of the Company until the room stay is provided to the patron.

Gaming wagers by patrons who are members of our loyalty programs represent two performance obligations of the Company. Patrons who are members of our loyalty programs earn loyalty points for gaming wagers. Points awarded under our loyalty programs are given to members based on their gaming play and the promise to provide points to members is required to be accounted for as a separate performance obligation. The Company applies a practical expedient by accounting for gaming wagers on a portfolio basis, as such wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to each individual patron. For purposes of allocating the transaction price when loyalty points are earned, the Company allocates an amount to the loyalty point liability based on the stand-alone selling price ("SSP") of the points earned, which is determined by the value of a point that can be redeemed for a hotel room or food and beverage services. An amount is allocated to the gaming wager performance obligation using the residual approach as the stand-alone price for wagers is highly variable and no set established price exists for such wagers. The allocated revenue for gaming wagers is recognized when the wagers occur because all such wagers settle immediately. The loyalty point liability amount is deferred and recognized as revenue when the patron redeems the points for a hotel room stay or for food and beverage services and such goods or services are provided to the patron. Prior to the adoption of ASC 606, we determined our liability for unredeemed points based on the estimated costs of services or merchandise to be provided and estimated redemption rates.

Additionally, outside of our loyalty programs and at our discretion, we offer our patrons complimentary goods and services, primarily food and beverage and hotel room stays. Such complimentaries are provided in conjunction with revenue-generating gaming activity and are largely provided to entice contemporaneous and future revenue-generating gaming activities. We allocate a portion of the transaction price for gaming wagers we receive from such patrons to the complimentary goods and services provided to such patrons using the residual approach. This allocation is based on the estimated SSP of the underlying goods and services provided, which are determined based on observed SSP we receive for selling such goods and services.

Hospitality Revenues: Food and beverage revenues, and room revenues include (i) revenues generated from transactions with patrons for such goods and/or services, (ii) revenues recognized through the redemption of points from our loyalty programs for such goods and/or services, and (iii) revenues generated as a result of providing such goods and/or services on a complimentary basis in conjunction with gaming activities. Food and beverage revenues and room revenues are recognized when goods are delivered and services are performed. In general, performance obligations associated with these transactions are satisfied at a point-in-time, but may also be satisfied over a period of time, which is typically over the course of a patron’s stay. Advance deposits on rooms are reflected as a performance obligation liability until the goods and/or services are provided to the patron. The Company's performance obligation liabilities are included in “Accrued expenses and other accrued liabilities” in our unaudited condensed consolidated balance sheets.

Racing Revenues: Racing revenues include revenue earned from pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks. Some elements of racing revenue from Off-Track Betting Corporations (“OTBs”) are recognized as collected, due to uncertainty of receipt and timing of payments.

Other Revenues: Other revenues primarily include commissions received on ATM transactions and cash advances, as well as lottery tickets, which are recorded on a net basis as the Company represents the agent in its relationship with the third-party service providers. Other revenues also include the sale of retail goods, which are recognized at the time the goods are delivered to the customer.

Subsequent to the adoption of ASC 606, complimentary food and beverage revenues and room revenues are included in food and beverage revenues, room revenues, and other revenues, with a corresponding decrease to gaming revenues, in the unaudited condensed consolidated statements of operations. See “Recent Accounting Pronouncements” for further information regarding the adoption of ASC 606.

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Complimentary food and beverage revenues, and complimentary room revenues for the three-month and nine-month periods ended September 30, 2018 and 2017, respectively, were as follows:

	Three Months Ended				Nine Months Ended
	09/30/2018		09/30/2017		09/30/2018		09/30/2017
	(in thousands)				(in thousands)
Complimentary food and beverage revenues	$	3,178	$	212	$	6,350	$	487
Complimentary room revenues	1,378		—		2,328		—

The Company’s performance obligation related to its loyalty point obligation is generally completed within one year, as a patron’s loyalty point balance is forfeited after six months of inactivity, as defined in the loyalty programs. The Company’s liability for its loyalty point performance obligations was $2.1 million and $0.3 million at September 30, 2018 and December 31, 2017, respectively. Loyalty points are generally earned and redeemed continuously over time.

Cash, cash equivalents and restricted cash

Cash and cash equivalents include cash on hand, demand deposits and certificates of deposit with original maturities of three months or less at acquisition. The Company maintains significant cash balances with financial institutions, which are not covered by the Federal Deposit Insurance Corporation. The Company has not incurred any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

The Company has several types of restricted cash accounts. These restrictions are in accordance with the NYSGC regulations. In addition, at September 30, 2018, the Company had restricted cash of $64.2 million from the proceeds of the Term Loan Facility (as defined below) held in the lender-controlled accounts pursuant to the Term Loan Facility.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows:

	September 30, 2018		December 31, 2017		September 30, 2017		December 31, 2016
	(in thousands)
Cash and cash equivalents	$	18,390	$	10,380	$	6,213	$	11,012
Restricted cash	502		693		920		1,078
Restricted cash for Development Projects	64,178		41,982		45,212		26,384
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	83,070	$	53,055	$	52,345	$	38,474

Restricted cash and investments for Development Projects

Restricted cash and investments for Development Projects represent the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At September 30, 2018, restricted cash and investments for Development Projects of $64.2 million was comprised entirely of cash and cash equivalent balances. At December 31, 2017, restricted cash and investments for Development Projects of $136.4 millionwas comprised of cash and cash equivalent balances of approximately $42.0 million and short-term investments maturing within one year of approximately $94.5 million. At December 31, 2017, short-term investments were comprised of commercial paper of approximately $59.4 million and U. S. Treasury notes of approximately $35.1 million, all with maturities of less than one year. The short-term investments are recorded at amortized cost, which approximates fair value due to their short-term nature.

Accounts receivable

Accounts receivable, net of allowances, are stated at the amount the Company expects to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectibility of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and the Company’s judgment of collectibility. The Company extends credit to certain gaming patrons upon completion of a credit application process. Gaming patrons are expected to repay gaming markers within a predetermined period of time, the Company also settles wagers for other racetracks and is exposed to credit risk. These amounts are included in accounts receivable. Account balances are charged against the allowance

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after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recorded an allowance for doubtful accounts of approximately $154,000 and $171,000 at September 30, 2018 and December 31, 2017, respectively.

Capitalized Interest

Interest costs incurred in connection with the construction of the Casino and the Development Projects have been capitalized in the cost of the projects. Capitalization will cease when the Casino or the other Development projects are substantially complete or if development activity is suspended for an extended period of time.

The Company capitalized $0.3 million and $8.2 million of interest charges during the three-month periods ending September 30, 2018 and September 30, 2017, respectively, and $11.7 million and $17.6 million for the nine-month periods ended September 30, 2018 and September 30, 2017, respectively.

Other long-term liabilities

The difference between our cash payments and straight-line rent on our land leases of $7.5 million and $8.3 million at September 30, 2018 and December 31, 2017, respectively, is included in other long-term liabilities.

Common stock - loss per share

The Company computes basic loss per share by dividing net loss applicable to common shares by the weighted-average common shares outstanding for the period. Diluted loss per share reflects the potential dilution of earnings that could occur if securities or contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three-month and nine-month periods ended September 30, 2018 and and 2017 were the same.

The following table shows the approximate number of common stock equivalents outstanding at September 30, 2018 and 2017 that could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share for the three-month and nine-month periods ended September 30, 2018 and 2017, because their inclusion would have been anti-dilutive to the loss per common share:

	Outstanding at
	September 30, 2018	September 30, 2017
Unvested Restricted stock	37,000	149,000
Warrants	193,000	133,000
Restricted stock units ("RSUs")	154,000	55,000
Option Matching Rights	—	3,000
Options	11,000	15,000
Total	395,000	355,000

On August 19, 2009, the Company entered into an investment agreement (the "Investment Agreement") with Kien Huat, pursuant to which Kien Huat purchased shares of common stock of the Company during the year ended December 31, 2009. Under the Investment Agreement, if any options or warrants outstanding at the time of the final closing under the Investment Agreement, or the first 200,000 options or warrants granted to directors or officers as of the final closing date under the Investment Agreement, are exercised, Kien Huat has the right to purchase an equal number of additional shares of common stock as are issued upon such exercise at the exercise price for the applicable option or warrant. The Company refers to these rights as the “Option Matching Rights.” The last remaining Option Matching Rights expired in July 2018.

Interest Rate Cap Agreement

In February 2017, the Company entered into an interest rate cap agreement with Credit Suisse AG, International to limit its exposure to increases in interest rates on its Term B Loan (as defined below) from May 1, 2017 through February 28, 2018 and then for a portion of the balance of its Term B Loan through July 31, 2019 (the "Interest Rate Cap"). The Company paid $675,000 for the Interest Rate Cap. The cost of the Interest Rate Cap is amortized over its term as interest expense. The fair value of the Interest Rate Cap was $287,000 at September 30, 2018 and $251,000 at December 31, 2017, and is presented at fair value as "Other Assets" on the Condensed Consolidated Balance Sheet. The difference between the fair value and amortized cost is recorded as an adjustment to accumulated other comprehensive loss.

8

Accumulated Other Comprehensive Loss

As of September 30, 2018 and December 31, 2017, accumulated other comprehensive loss was $89,000 and $315,000, respectively, and consisted solely of the fair value adjustment relating to the Interest Rate Cap.

Fair value

The Company follows the provisions of ASC 820, “Fair Value Measurement,” issued by the FASB for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The Company chose not to elect the fair value option as prescribed by the FASB for its financial assets and liabilities that had not been previously carried at fair value. The Company’s financial instruments are primarily comprised of current assets, restricted cash and investments, Interest Rate Cap, current liabilities and long-term debt. Current assets, investments and current liabilities approximate fair value due to their short-term nature.

In determining fair value, the Company uses quoted prices and observable inputs.  Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

The fair value hierarchy of observable inputs used by the Company is broken down into three levels based on the source of inputs as follows:

- Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

- Level 2 - Valuations based on inputs that are observable inputs and quoted prices in active markets for similar assets and liabilities.

- Level 3 - Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. 

The following table presents the carrying amount, fair values and classification level within the fair value hierarchy of financial instruments measured or disclosed at fair value on a recurring basis:

	September 30, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Level of Fair Value Hierarchy
Assets:	(in thousands)
Cash and cash equivalents	$	18,390	$	18,390	$	10,380	$	10,380	Level 1
Restricted cash	502		502		693		693		Level 1
Interest Rate Cap	287		287		251		251		Level 2
Restricted cash and investments for Development Projects:
Cash and cash equivalents	64,178		64,178		41,982		41,982		Level 1
Short-term investments	—		—		94,449		94,209		Level 2
Liabilities:
Term B Loan, net of discount	441,635		447,463		443,161		449,749		Level 2
Term A Loan	66,500		66,500		—		—		Level 2
Bangkok Bank Loan	18,000		18,000		16,000		16,000		Level 3
Revolving Credit Facility	15,000		15,000		—		—		Level 2
Related party loan, net of unamortized issuance costs	20,064		20,064		—		—		Level 3
Equipment loans	24,057		24,057		31,095		31,095		Level 3

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Stock-based compensation

The cost of all share-based awards to employees, including grants of employee stock options and restricted stock, is recognized in the financial statements based on the fair value of the awards at grant date. The fair value of stock option awards is determined using the Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the market price of Empire’s common stock on the date of grant. The fair value of share-based awards is recognized as stock-based compensation expense on a straight-line basis over the requisite service period from the date of grant. As of September 30, 2018, there was approximately $2.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company’s equity compensation plan. That cost is expected to be recognized over a period of three years. This expected cost does not include the impact of any future stock-based compensation awards.

Income taxes

The Company applies the asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates for the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Intangible Assets

In accordance with ASC 350, Intangibles - Goodwill and Other, the Company amortizes intangible assets over their estimated useful lives unless the Company determines their lives to be indefinite.

As a condition of the Gaming Facility License, the Company paid a license fee of $51 million on February 25, 2016. The term of the Gaming Facility License is 10 years from the date of grant; however, amortization did not commence until the Casino opened to the public in February 2018. Amortization has been recognized on a straight-line basis beginning in February 2018 and will continue until the license is up for renewal in 2026. The Company will assess the intangible asset for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which provides guidance for accounting for leases. Under ASU 2016-02, the Company will be required to recognize the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard must be adopted using a modified retrospective approach and provides for certain practical expedients. Early adoption is permitted. The Company intends to adopt the standard on January 1, 2019 and apply the package of practical expedients available to it upon adoption. The Company continues to evaluate the effect that ASU 2016-02 will have on consolidated financial statements, but we expect that ASU 2016-02 will have a material effect on the condensed consolidated balance sheets as a result of the recognition of certain leases as right-of-use assets and lease liabilities.

In November 2016, FASB issued ASU 2016-18, "Restricted Cash" Topic 230, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The Company adopted this standard on January 1, 2018 using the retrospective transition method. The impact of the new standard is that the Company's condensed consolidated statements of cash flows now present the change in a combined amount for both restricted and unrestricted cash and cash equivalents for all periods presented.

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Note C. Prepaid Expenses and Other Assets

The Company participated in the New York State Empire Zones real estate tax credit program for over 10 years. Under this program, the Company receives a refund for real estate taxes paid during the year, after the end of New York State's fiscal year. Beginning in 2014, the amount of the tax credit received was reduced by 20% each year until the tax credit ended for the Company on December 31, 2017. For the year ended December 31, 2017, the Company will receive a 20% refund for real estate taxes paid, equal to $269,000 in Spring 2019.

The increases in prepaid real estate taxes, advertising, gaming expenses and security deposits are directly related to the opening of the Casino during the current nine-month period. Included in prepaid gaming expenses are $863,000 of annual slot machine and table gaming license fees at the Casino, which are amortized to expense on a straight-line basis.

Prepaid expenses and other current assets, as presented on the balance sheet, are comprised of the following at September 30, 2018 and December 31, 2017:

	9/30/2018		12/31/2017
	(in thousands)
Empire Zones real estate tax credit	$	269	$	814
Prepaid real estate taxes	1,082		443
Prepaid insurance	312		327
Prepaid advertising	160		—
Prepaid gaming expenses	1,039		74
Prepaid maintenance contracts	931		476
Development escrow and refundable security deposit	987		780
Prepaid other	839		462
Total prepaid expenses and other current assets	$	5,619	$	3,376

Note D. Property and Equipment

Property and equipment at September 30, 2018 and December 31, 2017 consists of the following:

	9/30/2018			12/31/2017
	(in thousands)
Land	$	770		$	770
Land improvements	2,110			1,759
Buildings	579,203			4,727
Building improvements	76,740			29,874
Furniture, fixtures and equipment	35,483			5,551
Construction in Progress	1,651			77
	695,957			42,758
Less: Accumulated depreciation	(36,220		)	(15,895		)
	$	659,737		$	26,863

The $653.2 million increase in property and equipment was primarily due to the reclassification of capitalized Project Development costs to buildings, building improvements and furniture, fixtures and equipment during the nine-month period ended September 30, 2018. At September 30, 2018, $19.5 million remains classified as capitalized Project Development costs reflecting the ongoing construction of the Development Projects.

Depreciation expense was approximately $7.9 million and $0.4 million for the three-month periods ended September 30, 2018 and 2017, respectively, and approximately $20.3 million and $1.1 million for the nine-month periods ended September 30, 2018 and 2017, respectively.

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The VGMs at Monticello Casino and Raceway are owned by the NYSGC and, accordingly, the Company's consolidated financial statements include neither the cost nor the depreciation of those devices.

Note E. Development Projects Costs

Capitalized Project Development Costs

At September 30, 2018 and December 31, 2017, total Capitalized Project Development costs incurred were approximately $19.5 million and $566.8 million, respectively. Total Capitalized Development Project costs at September 30, 2018 consisted of $17.4 million of construction costs, site development, contractor insurance, general conditions, architectural fees and construction manager fees, and approximately $2.1 million of professional service fees including legal and accounting fees. Total Capitalized Project Development costs at December 31, 2017 consisted of $560.2 million of construction costs, site development, contractor insurance, general conditions, architectural fees and construction manager fees, and approximately $6.6 million of professional service fees, including legal and accounting fees, and is reflected on the balance sheet as Capitalized Development Project costs. The Casino opened for business on February 8, 2018, after receiving an operating certificate from the NYSGC.

ERREI entered into a standard contractor agreement with normal and customary terms with Petillo, Inc., related to the construction of the Golf Course Project, at a cost of approximately $21.2 million. The Company began construction in September 2018 and anticipates the Golf Course will be open for play during Summer 2019.

Cash Collateral for Deposit Bond

In February 2016 and June 2017, the Company deposited $15 million and $20 million, respectively, in performance bonds to guarantee the completion of the Development Projects. On December 28, 2017, the Company notified the NYSGC that it had expended 85% of the Company's required minimum capital investment in the Development Projects. On January 4, 2018, the NYSGC notified the Company that it had confirmed that such minimum capital investment criteria as required by the Gaming Act had been met and the funds returned to the Company were deposited into a lender-controlled account for use towards Development Projects expenses.

Note F. Accrued Expenses and Other Current Liabilities

Accrued Development Projects costs at September 30, 2018 and December 31, 2017 were $27.9 million and $71.7 million, respectively, and were primarily comprised of amounts due to the construction managers for costs incurred for the Development Projects, as well as amounts due to the architect and other vendors. The proceeds from the Term Loan Facility will be used to pay the accrued Development Project costs.

Accrued expenses and other current liabilities, as presented on the condensed consolidated balance sheet, are comprised of the following at September 30, 2018 and December 31, 2017:

	9/30/2018		12/31/2017
	(in thousands)
Liability for horseracing purses	$	1,164	$	886
Accrued payroll	5,494		1,715
Deferred revenue - loyalty points	2,065		271
Liability to the NYSGC	2,836		1,507
Liability for local progressive jackpot	2,452		1,110
Accrued premium game leases	880		—
Accrued professional fees	2,136		744
Accrued interest expense	9,279		14
Accrued utilities	792		81
Accrued other	6,843		992
Total accrued expenses and other current liabilities	$	33,941	$	7,320

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The increase in deferred revenue - loyalty points at September 30, 2018 of $1.8 million primarily reflects the increase in deferred revenues due to the increase in loyalty points earned by new customers as a result of the Casino opening. The liability to the NYSGC represents the amounts payable for taxes assessed by the NYSGC from gaming operations at the Company's facilities. The liability for local progressive jackpot represents the liability the Casino and the Monticello Casino and Raceway has incurred for all progressive jackpot games at each period ending date. Accrued premium game leases represent accruals for short-term slot machine leases for certain popular games.

Note G. Long-Term Debt

Long-term debt, other than Related Party debt, consisted of the following at September 30, 2018 and December 31, 2017:

	9/30/2018			12/31/2017
	(in thousands)
Term B Loan (stated amount less unamortized discount)	$	441,635		$	443,161
Term A Loan	66,500			—
Bangkok Bank Loan	18,000			16,000
Revolving Credit Facility	15,000			—
Equipment Loans	24,057			31,095
Total long-term debt	565,192			490,256
Debt issuance costs	(18,429		)	(20,520		)
Total long-term debt, net	546,763			469,736
Less: Current portion of long-term debt	(28,118		)	(14,588		)
Long term-debt, net of current portion	$	518,645		$	455,148

Term Loan Facility

At September 30, 2018, Montreign Operating's senior secured term loan facility (the "Term Loan Facility") consisted of $66.5 million outstanding under the Term A loan (the "Term A Loan") and $441.6 million outstanding (net of original issue discount) under the Term B loan (the "Term B Loan"). Pursuant to the Building Term Loan Agreement (as amended, the "Term Loan Agreement"), among Montreign Operating, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as administrative agent, the Term A Loan is fully drawn in accordance with the Term Loan Agreement, which required the Company to complete the draw down of the Term A Loan by July 24, 2018. The Term A Loan will mature on January 24, 2022 and the Term B Loan will mature on January 24, 2023. Interest accrues on outstanding borrowings under the Term A Loan at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. At September 30, 2018, the interest rate on the Term A Loan was 7.35%. Interest accrues on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a floor of 1%) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. At September 30, 2018, the interest rate on the Term B Loan was 10.59%. In addition, Montreign Operating paid a commitment fee to each Term A Loan lender equal to the undrawn amount of such lender’s commitment multiplied by a rate equal to 5.0% per annum through July 24, 2018.

The Company is currently required to make principal payments under the Term B Loan and the Term A Loan at the end of each calendar quarter, which began with the period ended June 30, 2018. The Company repays 1% of the original principal balance of the Term B Loan each year, in quarterly payments of approximately $1.1 million. The Company currently repays 2.5% of the original principal amount of the Term A Loan, in quarterly payments of approximately $1.8 million for the period ending March 31, 2019, and quarterly installments of approximately $2.6 million thereafter. The Company repaid approximately $3.5 million and $2.3 million on the Term A Loan and Term B Loan, respectively, in the nine-month period ended September 30, 2018.

The net proceeds from the Term A Loan and the Term B Loan, which are discussed below, were deposited into a lender controlled account.

The Term Loan Facility is guaranteed by the Project Parties and is secured by security interests in substantially all the real and personal property of the Project Parties and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding Company, LLC ("Montreign Holding"), a wholly-owned subsidiary of Empire.

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The Term Loan Facility contains representations and warranties, customary events of default, and affirmative, negative and financial covenants. For example, the Project Parties are restricted from entering into advisory, management or consulting agreements with an affiliate of any of the Project Parties, including Empire, except for payments pursuant to tax sharing agreements, distributions in an amount not exceeding 1% of the net revenues of the Project Parties in any fiscal year, repurchase of capital stock of the Company in an amount not exceeding $1 million and required by the NYSGC, and certain available amounts of cash based on the application of financial covenants. The Term Loan Facility also includes target dates by which the Casino is required to be opened to the public and by which its development must be fully complete (as such concepts are defined in the Term Loan Agreement).

In addition, the Term Loan Agreement requires us to satisfy certain financial covenants, including a maximum first lien leverage ratio, a minimum interest coverage ratio and a limitation on the maximum permissible capital expenditures by the Project Parties. The financial covenants relating to the maximum first lien leverage ratio and the minimum interest coverage ratio will be measured beginning in the first full fiscal quarter following the "Full Opening Date" of the Casino, which is the date on which at least 95% of all rooms in the hotel are open to the public. The Company anticipates that at least 95% of the hotel rooms will be ready to be occupied during the late forth quarter of 2018. As of September 30, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

Mandatory prepayments of the Term Loan Facility will be required upon the occurrence of certain events, including sales of certain assets, casualty events and the incurrence of certain additional indebtedness, subject to certain exceptions and reinvestment rights.

Revolving Credit Facility

At September 30, 2018, Montreign Operating's revolving credit facility (the "Revolving Credit Facility") consisted of $15 million of outstanding borrowings. The Revolving Credit Facility provides for loans or other extensions of credit to be made to Montreign Operating in an aggregate principal amount of up to $15 million (including a letter of credit sub-facility of $10 million) pursuant to the terms of the Revolving Credit Agreement, among Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent (as amended, the "Revolving Credit Agreement"). The proceeds of the Revolving Credit Facility may be used for working capital needs, capital expenditures and other general corporate purposes. The Revolving Credit Facility will mature on January 24, 2022. Interest accrues on outstanding borrowings at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. At September 30, 2018, the interest rate on borrowings under the Revolving Credit Facility was 7.34%.

The Revolving Credit Facility is guaranteed by the Project Parties and is secured by security interests in substantially all the real and personal property of the Project Parties and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding.

The Revolving Credit Facility contains representations and warranties, customary events of default, and affirmative, negative and financial covenants substantially similar to the terms of the Term Loan Agreement. Mandatory prepayments of the Revolving Credit Facility will be required upon the occurrence of certain events, including sales of certain assets, casualty events and the incurrence of certain additional indebtedness, subject to certain exceptions and reinvestment rights. As of September 30, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

Bangkok Bank Loan

At September 30, 2018, the Delayed Draw Term Loan, as amended (the "Bangkok Bank Loan") consisted of $18 million of outstanding borrowings and availability of $2 million pursuant to the Delayed Draw Term Loan Credit Agreement (the “Bangkok Bank Loan Agreement”), among Empire, Bangkok Bank PCL, New York Branch (“Bangkok Bank”), as lender, and MRMI, as guarantor. On November 7, 2018, the Company borrowed the remaining $2 million under the Bank of Bangkok Loan Agreement.

The Bangkok Bank Loan will mature on December 28, 2019. Interest accrues on outstanding borrowings under the Bangkok Bank Loan at a rate equal to LIBOR plus 6.25%, or an alternate base rate plus 5.25% per annum. At September 30, 2018, the interest rate on the Bangkok Bank Loan was 8.49%. In addition, the Company pays a commitment fee to Bangkok Bank equal to the undrawn amount of the Bangkok Bank Loan commitment multiplied by a rate equal to 1.50% per annum. Such commitment fee is paid on the last business day of each quarter and commenced on March 31, 2018.

The Bangkok Bank Loan was amended (the "Bangkok Bank Loan Amendment") on June 25, 2018 concurrently with the execution of the Kien Huat Subordinate Loan Agreement (which is defined and discussed in Note H below). The Bangkok Bank Loan Amendment permitted the Company to incur the Kien Huat Subordinate Loan.

14

The Bangkok Bank Loan is guaranteed by MRMI and is secured by a security interest in Monticello Casino and Raceway. The Bangkok Bank Loan Agreement contains customary representations and warranties and affirmative, negative and financial covenants, including representations, warranties and covenants that, among other things, restrict the ability of the Company and MRMI to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in certain transactions with affiliates, or make dividends or other distributions. Obligations under the Bangkok Bank Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as applicable), including among others, nonpayment of principal, interest or fees, breach of the affirmative or negative covenants, revocation of a gaming license after the expiration of certain cure periods, and a change of control of the Company.

In addition, the Bangkok Bank Loan Agreement contains a financial covenant that restricts the maximum total leverage ratio to four times the adjusted EBITDA of MRMI, which financial covenant is applicable beginning with the fiscal quarter ending December 31, 2018. The Bangkok Bank Loan Amendment excludes the Kien Huat Subordinate Loan from calculations of the Company's maximum total leverage so long as the Kien Huat Subordinate Loan remains subordinate to the Bangkok Bank Loan. The Company is in compliance with the covenant requirements as of September 30, 2018.

Equipment Loans

The Company has entered into several financing agreements related to the purchase of its slot machines, equipment and software for its telephone, hotel and Casino operations. The original amount financed was $31.1 million and the terms of these agreements run between six and 36 months. The balances outstanding at September 30, 2018 totaled approximately $24.1 million. The stated interest rates for these loans are between zero and eight percent per annum. The Company has imputed interest on several equipment loans with stated interest rates of 0%, using the Company's cost of funds rate of approximately 10%. The weighted average of the monthly principal repayments is approximately $1.0 million.

The following table lists the annual principal repayments due for the Company's long term debt as of September 30, 2018:

Year ending December 31,	Totals
	(in thousands)
2018	$7,711
2019	44,841
2020	20,690
2021	15,815
2022	30,000
2023	452,250
Totals	$571,307

Note H. Long-Term Loans, Related Party

Kien Huat Subordinate Loan Agreement

On June 25, 2018, Kien Huat and the Company entered into a loan agreement (the “Kien Huat Subordinate Loan Agreement”), providing for loans of up to $30 million (the “Kien Huat Subordinate Loan”). The Kien Huat Subordinate Loan is subordinate to the Bangkok Bank Loan. The proceeds of the Kien Huat Subordinate Loan may be used exclusively to make capital contributions to Montreign Operating. Montreign may use such funds for marketing and general corporate purposes (including the payment of debt service). All amounts due under the Kien Huat Subordinate Loan will mature on December 28, 2020, which date may be extended for additional one-year periods if the Bangkok Bank Loan is similarly extended or accelerated in the event the Bangkok Bank Loan is accelerated. The maturity of the Kien Huat Subordinate Loan may also be extended for up to one year at the sole discretion of Kien Huat. At September 30, 2018, $20 million was outstanding under the Kien Huat Subordinate Loan and an additional $10 million was advanced on October 16, 2018. The Company paid Kien Huat a commitment fee of $300,000 (or 1% of the principal amount) out of the proceeds of the first advance.

The Kien Huat Subordinate Loan bears interest at a rate of 12% per annum, compounded monthly, and will be payable at maturity. Prior to the maturity of the Kien Huat Subordinate Loan, interest will not be required to be paid in cash and will be added to the outstanding principal of the Kien Huat Subordinate Loan and will thereafter be deemed to be part of the principal indebtedness due thereunder upon maturity. The Kien Huat Subordinate Loan may be repaid in full or in part at any time without premium or penalty.

15

The Kien Huat Subordinate Loan Agreement contains customary representations and warranties and affirmative covenants, including a restriction on the use of the proceeds of the Kien Huat Subordinate Loan as described above. Obligations under the Kien Huat Subordinate Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as applicable), including among others: nonpayment of principal, interest or fees; breach of the affirmative covenants; and a default in payment of or acceleration of the Bangkok Bank Loan. Additionally, any future amendments to the Bangkok Bank Loan Agreement relating to default provisions thereunder, prepayment provisions or an increase of the maximum principal amount thereunder will be subject to Kien Huat’s prior written consent.

The Company agreed to indemnify and defend Kien Huat and its affiliates from negligent acts or omissions of the Company and its affiliates, any failure of the Company to comply with the terms of the Kien Huat Subordinate Loan Agreement and any failure of the Company to comply with any laws, except to the extent resulting from the gross negligence or willful misconduct of Kien Huat or its affiliates.

Kien Huat Backstop Loan Agreement

On December 28, 2017, Empire and Kien Huat entered into a loan agreement (the "Kien Huat Backstop Loan Agreement"), providing for loans to Empire in an aggregate principal amount of up to $20 million. Any amounts borrowed pursuant to the Kien Huat Backstop Loan Agreement will be used exclusively to make payments required under the Bangkok Bank Loan Agreement and will mature on the one-year anniversary of the maturity date of the Bangkok Bank Loan, or such earlier date that the Bangkok Bank Loan is terminated. At September 30, 2018, there were no outstanding borrowings pursuant to the Kien Huat Backstop Loan Agreement.

The Kien Huat Backstop Loan Agreement contains representations and warranties and affirmative covenants that are usual and customary, including representations, warranties and covenants that restrict the Company’s use of the proceeds of any loans made pursuant to the Kien Huat Backstop Loan Agreement to pay amounts due and payable under the Bangkok Bank Loan. Obligations under the Kien Huat Backstop Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including among others, nonpayment of principal, interest or fees, and breach of the affirmative covenants.

Note I. Stockholders’ Equity

Common Stock

Restriction on Ownership

Our common stock is transferable only subject to the provisions of Section 303 of the Racing, Pari-Mutuel Wagering and Breeding Law, so long as we hold, directly or indirectly, a license issued by the NYSGC, and may be subject to compliance with the requirements of other laws pertaining to licenses held directly or indirectly by us. The owners of common stock issued by us may be required by regulatory authorities to possess certain qualifications and may be required to dispose of their common stock if the owner does not possess such qualifications.

Restriction on Ability to Pay Dividends

Pursuant to the terms of the Bangkok Bank Loan Agreement, neither Empire nor any of its subsidiaries is permitted to declare or pay any dividends or make other payments to purchase, redeem, retire or otherwise acquire any capital stock of the Company. Such restriction will lapse upon the payment in full of any amounts outstanding under the Bangkok Bank Loan Agreement. Notwithstanding the foregoing, so long as no event of default has occurred, subsidiaries of Empire are permitted to pay dividends to Empire and Empire may pay dividends on the Series B Preferred Stock and for withholding taxes payable in connection with equity compensation programs.

Preferred Stock and Dividends

Series B Preferred Stock

The Company paid dividends, required by the terms of the Series B Preferred Stock, during 2017 and 2018 as follows: on April 2, 2018, July 2, 2018 and October 1, 2018, quarterly payments in the amount of $32,087 were made for the first three quarters of 2018. For the 2017 fiscal year, quarterly payments in the amount of $32,087 were made on April 3, 2017, July 3, 2017, October 2, 2017 and January 2, 2018.

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Series F Preferred Stock

On November 5, 2018, the Company filed a certificate of designations for the Series F Preferred Stock with the Secretary of State of the State of Delaware. In addition, on November 6, 2018, the Company entered into the KH 2018 Preferred Stock Commitment Letter pursuant to which Kien Huat agreed to purchase up to $126 million of the Series F Preferred Stock on the terms set forth therein. See Note K for further information concerning the KH 2018 Preferred Stock Commitment Letter.

Note J. Concentration

As of September 30, 2018, the Company had no receivable which represented more than 10.0% of the total net outstanding accounts receivable.

As of December 31, 2017, the Company had one debtor, Hawthorne OTB, which represented 13.0% of the total net outstanding accounts receivable.

Note K. Related Party Transactions

Kien Huat 2018 Preferred Stock Commitment Letter

On November 6, 2018, the Company entered into the KH 2018 Preferred Stock Commitment Letter, pursuant to which Kien Huat committed to provide equity financing in support of the general corporate and working capital requirements of the Company and its subsidiaries. Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million of Series F Preferred Stock on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and the Certificate of Designations of the Series F Preferred Stock, which the Company filed with the Secretary of State of the State of Delaware on November 5, 2018. Kien Huat committed to purchase the Commitment Amount of the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018, (ii) up to $20 million no earlier than February 15, 2019, (iii) up to $20 million no earlier than May 15, 2019, (iv) up to $15 million no earlier than August 15, 2019, (v) up to $37 million no earlier than November 15, 2019 and (vi) up to $22 million no earlier than March 15, 2020. The Company agreed to use its reasonable efforts to secure third-party financing in an amount equal to the Commitment Amount and the Commitment Amount will be reduced by the amount of any third-party financing raised by the Company. However, any equity financing raised by the Company from any person entering into a commercial agreement relating to online gaming and sports betting at the Casino in an amount up to $29 million will not reduce the Commitment Amount. Kien Huat will be entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat. Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

RWS License Agreement

On March 31, 2017, Montreign Operating entered into a license agreement (the “RWS License Agreement”) with RW Services Pte Ltd (“RWS”). RWS is an affiliate of Tan Sri Lim Kok Thay, who is a beneficiary of, and controls, Kien Huat. Pursuant to the RWS License Agreement, RWS granted Montreign Operating the non-exclusive, non-transferable, revocable and limited right to use certain “Genting” and “Resorts World” trademarks (the “RWS Licensed Marks”) in connection with the development, marketing, sales, management and operation (the “Permitted Uses”) of the Development Projects. The name of the Casino is “Resorts World Catskills,” and, notwithstanding the foregoing, the use of such name is exclusive to Montreign Operating and may be used in connection with online gaming in addition to the Permitted Uses The initial term of the RWS License Agreement will expire on December 31, 2027 and will be extended automatically for additional terms of 12 months each, up to a maximum of 39 additional terms, unless either of the parties provides notice to terminate the RWS License Agreement or upon the mutual written consent of both parties.

Beginning on the date on which the Casino opened to the public, Montreign Operating pays to RWS a fee equivalent to a percentage of Net Revenue (as such term is defined in the RWS License Agreement) generated in each calendar year from (i) all activity at the Casino, (ii) each specific use of the RWS Licensed Marks in the Entertainment Project or Golf Course and (iii) each specific use of the name Resorts World Catskills in connection with online gaming. The percentage of Net Revenue payable as the fee is a low single digit percentage that will increase incrementally between the third year and sixth year of the term of the RWS License Agreement and will remain a low single digit percentage during the entire term of the RWS License Agreement. The Company recorded an expense of approximately $494,000 and $1.1 million for the three-month and nine-month periods ended September 30, 2018, respectively, reflecting the fee payable pursuant to the RWS License Agreement.

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Moelis Agreement

On August 7, 2018, the Company entered into an engagement agreement (the "Moelis Engagement Agreement") pursuant to which it engaged Moelis & Company LLC ("Moelis") to act as the Company’s exclusive financial advisor in its review of opportunities in online gaming, sports betting and interactive gaming. Pursuant to the Moelis Engagement Agreement, Moelis has also been engaged as exclusive financial advisor with respect to a strategic financing transaction for the Company, if any. Pursuant to the Moelis Engagement Agreement, we will pay Moelis a retainer fee of $100,000 upon execution. In the event a transaction is consummated, the Moelis Engagement Agreement contemplates additional transaction-based fees would be earned by Moelis.

Gregg Polle, one of the directors of the Company, is a Managing Director of Moelis. Mr. Polle refrained from participating in the discussion of the Moelis Engagement Agreement and abstained from voting on whether to enter into such agreement.

Note L. Commitments and Contingencies

Legal Proceedings

The Company is a party from time to time to various legal actions that arise in the normal course of business. In the opinion of management, the resolution of these other matters will not have a material and adverse effect on our consolidated financial position, results of operations or cash flows.

Operating Leases

The following table represents the minimum lease payments under the Company's operating leases at September 30, 2018:

Year ending December 31,	Total Payments
	(in thousands)
2018	$	2,559
2019	9,291
2020	8,948
2021	8,489
2022	8,400
2023 to 2056	361,849
Total	$	399,536

The details of operating lease commitments are described below.

Casino Lease

On December 28, 2015, Montreign Operating entered into a lease (the "Casino Lease") with EPT Concord II, LLC ("EPT") for the lease of the parcel on which the Casino was built (the "Casino Parcel"). The Casino Lease has a term that expires on the earlier of (i) March 31, 2086, and (ii) Montreign Operating giving EPT written notice of its election to terminate the Casino Lease (the “Termination Option”) at least 12 months prior to any one of five Option Dates (as defined below). The option dates (each an "Option Date") under the Casino Lease mean each of the 20th, 30th, 40th, 50th and 60th anniversaries of the commencement of the Casino Lease. Upon Montreign Operating's timely notice of exercise of its Termination Option, the Casino Lease will be automatically terminated effective as of the applicable Option Date.

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The following table represents the fixed rent payments under the Casino Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1) (2)	$1,875
2019 (2)	7,500
2020 (2)	7,500
2021 (2)	8,000
2022 (2)	8,100
2023 to 2056 (2)	346,524

(1) From March 1, 2017 through August 31, 2018, fixed rent was $1 million per month.

(2) From September 1, 2018 through the remainder of the term of the Casino Lease, fixed rent is $7.5 million per year, subject to an eight percent escalation every five years ("Base Amount").

In addition to the annual fixed rent, beginning September 2018 and through the remainder of the term of the Casino Lease (the “Percentage Rent Period”), Montreign Operating is obligated to pay an annual percentage rent equal to five percent of the Eligible Gaming Revenue (as such term is defined in the Casino Lease) in excess of the Base Amount for the Percentage Rent Period. Additionally, the lease is a net lease, and Montreign Operating has an obligation to pay the rent payable under the Casino Lease and other costs related to Montreign Operating's use and operation of the Casino Parcel, including the special district tax assessments allocated to the Casino Parcel, not to exceed the capped dollar amount applicable to the Casino Parcel.

Golf Course Lease

On December 28, 2015, ERREI entered into a sublease (the “Golf Course Lease”) with Adelaar Developer, LLC (the "Destination Resort Developer") for the lease of the Golf Course Parcel. The terms of the Golf Course Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Golf Course Lease, there is no percentage rent due.

The following table represents the future fixed rent payments under the Golf Course Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1)	$0
2019 (1) (2)	63
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 to 2056 (2) (3)	7,633

(1) From the date the Golf Course Lease commenced (the “Golf Course Lease Commencement Date”) and until the date on which the Golf Course opens for business, which is expected to be in Summer 2019 (the “Golf Course Opening Date”), fixed rent payments will equal $0.

(2) From the Golf Course Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per

year.

(3) From August 2029 through the remainder of the term of the Golf Course Lease, fixed rent will equal $250,000 per year.

The Golf Course Lease is a net lease and ERREI is obligated to pay the rent payable under the Golf Course Lease and other costs related to ERREI's use and operation of the Golf Course Parcel, including the special district tax assessments allocated to the Golf Course Parcel, not to exceed the capped dollar amount applicable to the Golf Course Parcel. This obligation will not be assessed against ERREI prior to 60 months following the Golf Course Lease Commencement Date.

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Entertainment Project Lease

On December 28, 2015, ERREII entered into a sublease (the “Entertainment Project Lease”) with the Destination Resort Developer, for the lease of the Entertainment Project Parcel. The terms of the Entertainment Project Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Entertainment Project Lease, there is no percentage rent due.

The following table represents the future fixed rent payments under the Entertainment Project Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1) (2)	$0
2019(2)	150
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 to 2056 (2) (3)	7,675

(1) From the date the Entertainment Project Lease commenced (the “Entertainment Project Lease Commencement Date”) and until the date on which the Entertainment Project opens for business, which is expected to be at the end of December 2018 (the “Entertainment Project Opening Date”), fixed rent payments will equal $0.

(2) From the Entertainment Project Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per year.

(3) From January 2029 through the remainder of the term of the Entertainment Project Lease, fixed rent will equal $250,000 per year.

The Entertainment Project Lease is a net lease and ERREII is obligated to pay the rent payable under the Entertainment Project Lease and other costs related to ERREII's use and operation of the Entertainment Project Parcel, including the special district tax assessments allocated to the Entertainment Project Parcel, not to exceed the capped dollar amount applicable to the Entertainment Project Parcel. This obligation will not be assessed against ERREII prior to 60 months following the Entertainment Project Lease Commencement Date.

Note M. Subsequent Events

On October 16, 2018, the Company borrowed $10 million under the Kien Huat Subordinate Loan Agreement. See Note H for a discussion of the terms of the Kien Huat Subordinate Loan Agreement.

On November 5, 2018, the Company filed a certificate of designations for the Series F Preferred Stock with the Secretary of State of the State of Delaware.

On November 6, 2018, the Company entered into the KH 2018 Preferred Stock Commitment Letter pursuant to which Kien Huat committed to provide equity financing in support of the general corporate and working capital requirements of the Company and its subsidiaries. Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million of Series F Preferred Stock on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and the Certificate of Designations of the Series F Preferred Stock. Kien Huat committed to purchase the Commitment Amount of the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018, (ii) up to $20 million no earlier than February 15, 2019, (iii) up to $20 million no earlier than May 15, 2019, (iv) up to $15 million no earlier than August 15, 2019, (v) up to $37 million no earlier than November 15, 2019 and (vi) up to $22 million no earlier than March 15, 2020. The Company agreed to use its reasonable efforts to secure third-party financing in an amount equal to the Commitment Amount and the Commitment Amount will be reduced by the amount of any third-party financing raised by the Company. However, any equity financing raised by the Company from any person entering into a commercial agreement relating to online gaming and sports betting at the Casino in an amount up to $29 million will not be used to reduce the Commitment Amount. Kien Huat will be entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat. Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

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    On November 7, 2018, the Company borrowed the remaining $2 million under the Bangkok Bank Loan Agreement. See Note G for a discussion of the terms of the Bangkok Bank Loan Agreement.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The Management’s Discussion and Analysis of the Financial Condition and Results of Operations should be read together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Condensed Consolidated Financial Statements and related notes thereto in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally relate to our strategies, plans and objectives for future operations and are based upon management’s current plans and beliefs or estimates of future results or trends. Forward-looking statements also involve risks and uncertainties, including, but not restricted to, the risks and uncertainties described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2017 which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict.

You should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and we will not update these forward-looking statements, even if our situation changes in the future. We caution the reader that a number of important factors discussed herein, and in other reports filed with the Securities and Exchange Commission, could affect our actual results and cause actual results to differ materially from those discussed in forward-looking statements.

Overview

Empire was organized as a Delaware corporation on March 19, 1993, and since that time has served as a holding company for various subsidiaries engaged in the hospitality and gaming industries.

Our indirect wholly-owned subsidiary, Montreign Operating, doing business as Resorts World Catskills, owns and operates Resorts World Catskills, a casino which opened to the public on February 8, 2018. The Casino is located in Sullivan County, New York approximately 90 miles from New York City. Montreign Operating is the sole holder of a Gaming Facility License issued by the NYSGC in the Hudson Valley-Catskill region, which consists of Columbia, Delaware, Dutchess, Greene, Orange, Sullivan and Ulster counties in New York State.

In addition to the Casino, ERREI and ERREII and, together with the Project Parties, each of which is a wholly-owned subsidiary of Montreign Operating, are developing the Development Projects, a four-season destination resort in Sullivan County.

Through our wholly-owned subsidiary, MRMI, we own and operate Monticello Casino and Raceway, which began racing operations in 1958 in Monticello, New York, which is proximate to the Casino. Monticello Casino and Raceway currently features a VGM and harness horseracing facility. We also generate racing revenues through pari-mutuel wagering on the running of live harness horse races, the import simulcasting of harness and thoroughbred horse races from racetracks across the country and internationally, and the export simulcasting of our races to offsite pari-mutuel wagering facilities.

Recent Events

Kien Huat 2018 Preferred Stock Commitment Letter

On November 6, 2018, the Company entered into the KH 2018 Preferred Stock Commitment Letter pursuant to which Kien Huat committed to provide equity financing it support the general corporate and working capital requirements of the Company and its subsidiaries. Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million of Series F Preferred Stock on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and the Certificate of Designations of the Series F Preferred Stock, which the Company filed with the Secretary of State of the State of Delaware on November 5, 2018. Kien Huat committed to purchase the Commitment Amount of the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018, (ii) up to $20 million no earlier than February 15, 2019, (iii) up to $20 million no earlier than May 15, 2019, (iv) up to $15 million no earlier than August 15, 2019, (v) up to $37 million no earlier than November 15, 2019 and (vi) up to $22 million no earlier than March 15, 2020. The Company agreed to use its reasonable efforts to secure third-party financing in an amount equal to the Commitment Amount and the Commitment Amount will be reduced by the amount of any third-party financing raised by the Company. However, any equity financing raised

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by the Company from any person entering into a commercial agreement relating to online gaming and sports betting at the Casino in an amount up to $29 million will not reduce the Commitment Amount. Kien Huat will be entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat. Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

Critical Accounting Policies and Estimates

We make certain judgments and use certain estimates and assumptions when applying accounting principles in the preparation of our consolidated financial statements. The nature of the estimates and assumptions are material due to the levels of subjectivity and judgment necessary to account for highly uncertain factors or the susceptibility of such factors to change.

We believe the current assumptions and other considerations used to estimate amounts reflected in our consolidated financial statements are appropriate. However, if actual experience differs from the assumptions and other considerations used in estimating amounts reflected in our consolidated financial statements, the resulting changes could have a material adverse effect on our consolidated results of operations and, in certain situations, could have a material adverse effect on our consolidated financial condition. 

For further information on our critical accounting estimates, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017. With the exception of the adoption of ASC 606 on January 1, 2018, there have been no material changes to our critical accounting policies and estimates. See Note B to the condensed consolidated financial statements for further information regarding our updated revenue recognition and loyalty program accounting policies.

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Results of Operations - Three months ended September 30, 2018 Compared to Three Months ended September 30, 2017

The following table highlights the various sources of revenues and expenses for the three months ended September 30, 2018 as compared to the three months ended September 30, 2017:

	Three Months Ended
	September 30, 2018		September 30, 2017		Percent Change
	(in thousands, except percentages)
Gaming revenues	$	47,381	$	17,833	165.7	%
Gaming expenses	35,737		12,739		180.5	%
Racing revenues	1,368		1,438		(4.9	)%
Racing expenses	2,223		1,312		69.4	%
Food and beverage revenues	6,452		794		712.6	%
Food and beverage expenses	7,526		1,136		562.5	%
Room revenues	2,826		—		n/m
Room expenses	2,662		—		n/m
Other revenues	1,921		267		619.5	%
Other expenses	43		54		(20.4	)%
Selling, general and administrative expenses	19,754		4,730		317.6	%
Development Projects expenses	452		5,196		(91.3	)%

Gaming Revenues and Expenses

Gaming revenues increased $29.5 million, or 165.7%, for the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017, from $17.8 million to $47.4 million. The increase in gaming revenues was primarily due to revenues generated by the Casino, which generated $43.0 million in gross gaming revenue. Monticello Casino and Raceway generated $8.7 million in gross gaming revenue for the three-month period ended September 30, 2018 as compared to $17.8 million for the three-month period ended September 30, 2017. The decrease in gaming revenue at Monticello Casino and Raceway was primarily due to a decrease in volume relating to the opening of the Casino.

Gaming expenses increased $23.0 million, or 180.5%, for the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017, from $12.7 million to $35.7 million. The increase in gaming expenses was primarily due to expenses generated by the Casino, which includes gaming taxes and payroll expenses, offset by an increase in the commission rate earned by the Company at operations at Monticello Casino and Raceway. The Company's commission rate was increased due to NYSGC regulations that allow for a higher commission that is commensurate with the blended tax rate paid by the Casino.

Racing Revenues and Expenses

Racing revenues decreased approximately $70,000, or 4.9%, for the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017. The decrease in racing revenues is due to a decrease in racing simulcast revenues as compared to the three-month period ended September 30, 2017. Racing expenses increased $0.9 million, or 69.4%, for the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017, from $1.3 million to $2.2 million. The increase is due to larger purse contributions and higher fees required by New York State.

Food and BeverageRevenues and Expenses

Food and beverage revenues increased approximately $5.7 million, or 712.6%, for the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017, from approximately $0.8 million to $6.5 million due to the opening of the new food venues at the Casino. Food and beverage expenses increased $6.4 million, or 562.5% for the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017, from $1.1 million to $7.5 million. The increase was primarily due to the opening of the Casino and its attendant additional food venues, which increased costs for food, beverage and supplies, as well as payroll expense.

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Room Revenues and Expenses

The Casino generated approximately $2.8 million in room revenue for the three-month period ended September 30, 2018 due to the Casino opening. We incurred room expenses of approximately $2.7 million, which is primarily due to payroll and benefit expenses.

Other Revenues and Expenses

Other revenues are primarily due to ATM revenues at the Casino, as well as retail sales and commissions from the sale of lottery tickets. Other revenues increased by approximately $1.7 million, or 619.5%, during the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017, from approximately $0.3 million to approximately $1.9 million, primarily due to an increase in ATM revenues along with the opening of the retail store and spa at the Casino. Other expenses decreased by approximately $11,000, or 20.4%, during the three-month period ended September 30, 2018 as compared to the three-month period ended September 30, 2017, from approximately $54,000 to approximately $43,000 due to the reduction of staffing at Monticello Casino and Raceway.    

Selling General and Administrative (“SG&A”)

SG&A expenses increased $15.0 million, or 317.6%, for the three-month period ended September 30, 2018 as compared to the three-month ended September 30, 2017, from $4.7 million to $19.8 million. The increase in SG&A expenses is primarily due to an increase in payroll and benefits, insurance, marketing and a branding fee, all relating to the Casino.

Development Projects Expenses

Development Projects expenses decreased by $4.7 million, or 91.3% for the three-month period ending September 30, 2018 as compared to the three-month period ended September 30, 2017, from $5.2 million to $0.4 million. The decrease was primarily due to the Casino opening. Costs associated with the Casino will cease to be capitalized upon the complete opening of the Casino. At September 30, 2018, the Casino is open, however the penthouse suites at the Casino are still under construction and are expected to be complete in December 2018. The Company is also currently constructing the Entertainment Project hotel and recently began construction of the Golf Course Project. Costs associated with these Projects are primarily capitalized and are included in Capitalized Development Projects Costs on the Balance Sheet.

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Results of Operations - Nine months ended September 30, 2018 Compared to Nine Months ended September 30, 2017

The following table highlights the various sources of revenues and expenses for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017 (in thousands, except percentages):

	Nine Months Ended
	September 30, 2018		September 30, 2017		Percent Change
	(in thousands, except percentages)
Gaming revenues	$	115,706	$	46,956	146.4	%
Gaming expenses	91,547		34,384		166.2	%
Racing revenues	3,926		4,161		(5.6	)%
Racing expenses	5,948		3,771		57.7	%
Food and beverage revenues	13,593		1,892		618.4	%
Food and beverage expenses	17,108		3,174		439.0	%
Room revenues	5,285		—		n/m
Room expenses	5,622		—		n/m
Other revenues	4,096		731		460.3	%
Other expenses	154		215		(28.4	)%
Selling, general and administrative expenses	44,787		14,158		216.3	%
Development Projects expenses	12,084		13,881		(12.9	)%

Gaming Revenues and Expenses

Gaming revenues increased $68.8 million, or 146.4%, for the nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from $47.0 million to $115.7 million. The increase in gaming revenues was primarily due to the opening of the Casino in February 2018, which generated $98.0 million in gross gaming revenue. Monticello Casino and Raceway generated $17.8 million in gross gaming revenue for the nine-month period ended September 30, 2018 as compared to $47.0 million for the nine-month period ended September 30, 2017. The decrease in gaming revenue at Monticello Casino and Raceway was primarily due to a decrease in volume due to the opening of the Casino, as well as unfavorable weather during the first quarter.

Gaming expenses increased $57.2 million, or 166.2%, for the nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from $34.4 million to $91.5 million. The increase in gaming expenses was primarily due to the Casino opening, which includes gaming taxes and payroll expenses, offset by an increase in the commission rate earned by the Company at operations at Monticello Casino and Raceway. The Company's commission rate was increased due to NYSGC regulations that allow for a higher commission that is commensurate with the blended tax rate paid by the Casino.

Racing Revenues and Expenses

Racing revenues decreased approximately $0.2 million, or 5.6%, for the nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from $4.2 million to $3.9 million. The decrease in racing revenues is due to a decrease in racing simulcast revenues as compared to the nine-month period ended September 30, 2017. Racing expenses increased $2.2 million, or 57.7%, for the nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from $3.8 million to $5.9 million. The increase is due to larger purse contributions and higher fees required by New York State.

Food and BeverageRevenues and Expenses

Food and beverage revenues increased approximately $11.7 million, or 618.4%, for the nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from approximately $1.9 million to $13.6 million due to the opening of the new food venues at the Casino. Food and beverage expenses increased $13.9 million, or 439.0% for the

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nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from $3.2 million to $17.1 million. The increase was primarily due to the opening of the Casino and its additional food venues, which increased costs for food, beverage and supplies, as well as payroll related expenses.

Room Revenues and Expenses

The Casino generated approximately $5.3 million in room revenue for the nine-month period ended September 30, 2018 due to the Casino opening. We incurred room expenses of approximately $5.6 million, which is primarily due to payroll and benefit expenses relating to the Casino opening.

Other Revenues and Expenses

The increase in other revenues is primarily due to ATM revenues generated by the Casino, as well as retail revenues and commissions from the sale of lottery tickets. Other revenues increased by approximately $3.4 million, or 460.3%, during the nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from approximately $0.7 million to approximately $4.1 million, primarily due to an increase in ATM revenues along with the opening of the retail store and spa at the Casino. Other expenses decreased by approximately $61,000, or 28.4%, during the nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from approximately $215,000 to approximately $154,000 due to the reduction of staffing at Monticello Casino and Raceway.    

Selling General and Administrative (“SG&A”)

SG&A expenses increased $30.6 million, or 216.3%, for the nine-month period ended September 30, 2018 as compared to the nine-month period ended September 30, 2017, from $14.2 million to $44.8 million. The increase in SG&A expenses is primarily due to an increase in payroll and benefits, insurance, marketing and a branding fee, all relating to the Casino opening.

Development Projects Expenses

Development Projects expenses decreased by $1.8 million or 12.9% for the nine-month period ending September 30, 2018 as compared to the nine-month period ended September 30, 2017, from $13.9 million to $12.1 million. The decrease was primarily due to decreased payroll and benefits for Casino employees and management staffing prior to Casino opening, as well as marketing and advertising expenses in preparation for the Casino opening. Costs associated with the Casino will cease to be capitalized upon the complete opening of the Casino, which is expected to occur in December 2018.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared on a basis that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Historically and prospectively, our primary sources of liquidity and capital resources have been, and will continue to be, cash generated from operations, borrowings from banks and proceeds from the issuance of debt and equity securities. Based on our current level of operations and our expected results of operations of the Casino and the remaining Development Projects as they are completed, we believe that cash generated from operations and cash on hand, together with amounts available under our principal debt arrangements and the KH 2018 Preferred Stock Commitment Letter, will be sufficient to meet the working capital requirements and the expected remaining costs of the Development Projects over the next 12 months. We cannot be certain that our business will generate sufficient cash flow from operations, that our anticipated earnings from the Development Projects will be realized, or that future borrowings will be available under our existing debt arrangements or otherwise to enable us to service our indebtedness or to make anticipated capital expenditures. As a result, we may need to raise additional capital or incur additional indebtedness, including by issuing securities from our Shelf Registration Statement (as defined below), which has a current availability of approximately $333 million, to finance our plans for growth and general corporate purposes. Our future operating performance and our ability to service our debt will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. See “Risk Factors” in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2017 for a discussion of the risks related to our liquidity and capital structure.

Cash Flows

Net cash used in operating activities was approximately $42.3 million during the nine-month period ended September 30, 2018. Net cash used in operating activities was $23.7 million during the nine-month period ended September 30, 2017. We continue to generate net losses due to the expenses we incurred related to the Casino and the Development Projects prior to the opening of the Casino. We incurred $12.1 million and $13.9 million of Development Projects costs during the nine-month periods ended September 30, 2018 and 2017, respectively. Our operating cash flows during the nine-month period ended September 30, 2017 were negatively impacted by severe weather during the period resulting in a reduction in revenues. The decrease in cash flow for the nine-month period ended September 30, 2018 was primarily due to the impact of the net loss for the period along with the increase in accounts receivable and prepaid expenses associated with the Casino opening. Cash flows for the current year may not

26

be indicative of future results due to the timing of the Casino opening, a lack of full amenities and delayed marketing expenditures for the Casino.

The Casino opened to the public in February 2018 with limited amenities. Additional amenities were added to the Casino during the nine-month period ended September 30, 2018. The Entertainment Project is expected to be completed in December 2018 and the Golf Course is expected to open in Summer 2019. Moreover, Resorts World Catskills opened during the winter season, which is historically a season of lower visitation to casinos. As a result, the Company’s expenditures on marketing the Casino were lower during the first six months in 2018. The Company used a portion of the proceeds of the Kien Huat Subordinate Loan to expand the marketing activity during the three-month period ended September 30, 2018, when gaming patrons were more likely to visit the Casino. As a result, net revenues increased from $49.1 million to $59.9 million for the three-month periods ending June 30, 2018 and September 30, 2018, respectively.

Net cash used in investing activities was approximately $20.3 million and $413.1 million during the nine-month periods ended September 30, 2018 and 2017, respectively. The decrease in net cash used for the nine-month period ended September 30, 2018 as compared to 2017 was due primarily to the reduction in investments of unused loan proceeds in 2018. The Company incurred $148.8 million of costs for the Capitalized Development Projects during the nine-month period ended September 30, 2018. Development Projects costs were funded by $129.5 million of proceeds of the Term Loan Facility held in lender-controlled accounts. At September 30, 2018, our total assets included approximately $64.2 million of remaining net proceeds available from the Term Loan Facility, which are presented on the condensed consolidated balance sheet as a non-current asset (restricted cash and investments for Development Projects). The proceeds of the Term Loan Facility may be used solely to pay for costs relating to the Development Projects. During the nine-month period ended September 30, 2017, the Company invested $189.8 million of proceeds from the Term Loan Facility in restricted investments for the Development Projects and incurred $201.4 million of Capitalized Development Project costs. During the nine-month period ended September 30, 2017, the Company also made a $20.0 million payment for a cash performance bond as required for the Casino.

Net cash provided by financing activities was approximately $92.6 million and $450.6 million during the nine-month periods ended September 30, 2018 and 2017, respectively. Approximately $15.0 million was borrowed under the Revolving Credit Facility, $2.0 million was borrowed under the Bangkok Bank Loan Agreement and the Company borrowed an additional $70.0 million of Term A Loans during the nine-month period ended September 30, 2018. The Company also received $20.0 million under the Kien Huat Subordinate Loan Agreement. The Company repaid $7.0 million of equipment loans and an additional $5.8 million of Term A and Term B Loans during the nine-month period ended September 30, 2018. At September 30, 2018, the Company had $24.1 million of equipment loans outstanding for the purchase of slot machines, equipment and software for the Casino. During the nine-month period ended September 30, 2018, restricted stock grants of certain executives vested, resulting in $1.0 million of income tax withholding taxes paid by the Company in exchange for the surrender of a portion of the vested shares. Approximately $441.9 million of net proceeds were borrowed pursuant to the Term Loan Facility and an additional $32.0 million was borrowed pursuant to the then-outstanding Kien Huat Montreign Loan during the nine-month period ended September 30, 2017.

Development Projects Expenditures

The Company expects that upon completion, the Development Projects will have cost approximately $925 million, which includes $762 million of anticipated costs for construction of the Development Projects and contingency, $68 million for interest reserves, $51 million for the Gaming Facility License fee and $44 million of original issue discount and financing and legal fees. The Company began construction of the Entertainment Project in March 2018, after signing a guaranteed maximum price agreement of $32.7 million with its construction manager. The Company recently signed a contractor agreement for the Golf Course for a total cost of approximately $21.2 million.

As of September 30, 2018, the Company had incurred an aggregate total of $854.1 million related to the Development Projects. This included $691.5 million of capitalized Development Projects costs, of which $630.1 million was reclassified to property and equipment upon the opening of the Casino, $67.6 million of interest expense related to bank debt for the Development Projects, $51.0 million for the Gaming Facility License and $44.0 million of debt issuance costs related to the Development Projects. The Company expects the $64.2 million of net proceeds from the Term Loan Facility held in the lender-controlled accounts at September 30, 2018 will be sufficient to meet the expected cost of completing the Development Projects.

The costs associated with the Development Projects may increase due to risks inherent in the design and development of such projects and their construction. The Development Projects could experience changes to plans and specifications, even after the opening of such facilities, delays and significant cost increases, labor disputes or work stoppages, poor performance or nonperformance by any third party on which we rely, or other unanticipated circumstances or cost increases. The occurrence of any of these development and construction risks could increase the total costs of the Development Projects or delay or prevent the construction or opening or otherwise affect the design and features of the Development Projects. All of these circumstances could materially adversely affect our financial condition and cause us to require additional funding, generated from our operations or external sources, to complete the construction of the Development Projects.

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Principal Debt Arrangements

Term Loan Facility

At September 30, 2018, the Term Loan Facility consisted of $66.5 million borrowings outstanding under the Term A Loan and $441.6 million outstanding (net of original issue discount) under the Term B Loan. At September 30, 2018, the interest rate on the Term A Loan was 7.35% and the interest rate on the Term B Loan was 10.59%. The proceeds of the Term Loan Facility are held in a lender-controlled account and may be used solely to pay the expenses of the Development Projects. The Company is currently repaying 1% of the original principal balance of the Term B Loan each year in quarterly payments of approximately $1.1 million, which began in June 2018. The Company will repay 2.5% of the original principal amount of all Term A Loan Commitments on January 24, 2017, in quarterly payments of approximately $1.8 million through March 31, 2019 and quarterly payments of approximately $2.6 million thereafter. The Company repaid $3.5 million and $2.3 million on the Term A Loan and Term B Loan, respectively, in the nine-month period ended September 30, 2018.

The Term Loan Facility contains representations and warranties, customary events of default, and affirmative, negative and financial covenants. For example, the Project Parties are restricted from entering into advisory, management or consulting agreements with an affiliate of any Project Parties, including Empire, except for payments pursuant to tax sharing agreements, distributions in an amount not exceeding 1% of the net revenues of the Project Parties in any fiscal year, repurchase of capital stock of the Company in an amount not exceeding $1 million and required by the NYSGC, and certain available amounts of cash based on the application of financial covenants.

The Term Loan Agreement further requires the Project Parties to satisfy certain financial covenants, including a maximum first lien leverage ratio, a minimum interest coverage ratio and mandatory prepayments from excess cash flow. The Project Parties are also prohibited from incurring, subject to certain adjustments, in excess of $10.5 million in capital expenditures (on a consolidated basis) in any fiscal year, which limit is not applicable to expenses related to the Casino and Entertainment Project and up to $25 million related to the Golf Course Project. The financial covenants relating to the maximum first lien leverage ratio and the minimum interest coverage ratio will be measured beginning in the first full fiscal quarter following the "Full Opening Date" of the Casino, which is the date on which at least 95% of all rooms in the Casino hotel are open to the public. The financial covenant relating to mandatory prepayments will be measured beginning in the first fiscal year in which the Full Opening Date occurs. The Company currently expects that at least 95% of all hotel rooms at the Casino will be open to the public during the fourth quarter of 2018. At September 30, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

Our affiliates may, from time to time, seek to purchase our outstanding Term B Loan through cash purchases in open market purchases, privately negotiated transactions or otherwise. We will evaluate any such transactions in light of then-existing market conditions, taking into account our current liquidity, prospects for future access to capital and contractual restrictions. The amounts involved may be material.

Revolving Credit Facility

    At September 30, 2018, the Revolving Credit Facility consisted of $15 million of outstanding borrowings. At September 30, 2018, the interest rate on borrowings under the Revolving Credit Facility was 7.33%. The proceeds of the Revolving Credit Facility may be used for working capital needs, capital expenditures and other general corporate purposes.

The Revolving Credit Facility contains representations and warranties, customary events of default, and affirmative, negative and financial covenants substantially similar to the terms of the Term Loan Facility. At September 30, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

Bangkok Bank Loan

At September 30, 2018, the Bangkok Bank Loan consisted of $18 million of outstanding borrowings and an additional $2 million was available for borrowing. On November 7, 2018, the Company borrowed the remaining $2 million under the Bangkok Bank Loan Agreement. At September 30, 2018, the interest rate on the Bangkok Bank Loan was 8.49%. The Company also pays a commitment fee to Bangkok Bank equal to the undrawn amount of the Bangkok Bank Loan multiplied by a rate equal to 1.50% per annum. Such commitment fee was payable on the last business day of each quarter beginning on March 31, 2018. The Bangkok Bank Loan Agreement contains customary representations and warranties and affirmative covenants, negative covenants and financial covenants that, among other things, restrict the ability of Empire and MRMI to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in certain transactions

28

with affiliates, or make dividends or other distributions. In addition, the Bangkok Bank Loan Agreement contains a financial covenant that restricts the maximum total leverage ratio to four times the adjusted EBITDA of MRMI, which financial covenant is applicable beginning with the fiscal quarter ending December 31, 2018.The Bangkok Bank Loan Amendment excludes the Kien Huat Subordinate Loan from calculations of the Company's maximum total leverage so long as the Kien Huat Subordinate Loan remains subordinate to the Bangkok Bank Loan. At September 30, 2018, the Company was in compliance with the covenant requirements of the Bangkok Bank Loan.

Equipment Loan Agreements

The Company has entered into several long-term financing agreements related to the purchase of its slot machines, equipment and software for the Casino' s hotel, information technology and other operations. The original amount financed was approximately $31.1 million and the terms of these agreements run between six and 36 months. The balances outstanding at September 30, 2018 totaled approximately $24.1 million. The stated interest rates for these loans are between zero and eight percent per annum. The Company has imputed interest on several equipment loans with stated interest rates of 0%, using the Company's cost of funds rate of approximately 10%. The weighted average of the monthly repayments is approximately $1.0 million.

Kien Huat Subordinate Loan Agreement

On June 25, 2018, Kien Huat and the Company entered into the Kien Huat Subordinate Loan Agreement, providing for loans of up to $30 million. At September 30, 2018, $20 million was outstanding under the agreement. The Company borrowed an additional $10 million on October 16, 2018. The Kien Huat Subordinate Loan is subordinate to the Bangkok Bank Loan. The proceeds of the Kien Huat Subordinate Loan may be used exclusively to make capital contributions to Montreign Operating. Montreign may use such funds for marketing and general corporate purposes (including the payment of debt service).

The Kien Huat Subordinate Loan bears interest at a rate of 12% per annum, compounded monthly, and will be payable at maturity. Prior to the maturity of the Kien Huat Subordinate Loan, interest will not be required to be paid in cash and will be added to the outstanding principal of the Kien Huat Subordinate Loan and will thereafter be deemed to be part of the principal indebtedness due thereunder upon maturity. The Kien Huat Subordinate Loan may be repaid in full or in part at any time without premium or penalty.

The Kien Huat Subordinate Loan Agreement contains customary representations and warranties and affirmative covenants, including a restriction on the use of the proceeds of the Kien Huat Subordinate Loan as described above. Obligations under the Kien Huat Subordinate Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as applicable), including among others: nonpayment of principal, interest or fees; breach of the affirmative covenants; and a default in payment of or acceleration of the Bangkok Bank Loan. Additionally, any future amendments to the Bangkok Bank Loan Agreement relating to default provisions thereunder, prepayment provisions or an increase of the maximum principal amount thereunder will be subject to Kien Huat’s prior written consent.

Other Factors Affecting Liquidity

The Company may raise additional equity or debt capital or enter into arrangements to secure necessary financing to fund the completion of the Development Projects, to meet obligations under the Term Loan Facility or for the general corporate purposes of the Company. Such arrangements may take the form of loans, strategic agreements, joint ventures or other agreements. The sale of additional equity could result in additional dilution to the Company’s existing stockholders, and financing arrangements may not be available to us, or may not be available in sufficient amounts or on acceptable terms.

On October 14, 2016, we filed a universal shelf registration statement on Form S-3 (the "Shelf Registration Statement") covering the offer and sale of $250 million of our securities. The Shelf Registration Statement, which also carried over $83.8 million of our securities registered on an expiring shelf registration statement that remained unsold, was declared effective on November 17, 2016. As of November 7, 2018, we had up to approximately $333 million available for future issuances under the Shelf Registration Statement. Unless otherwise indicated in a prospectus supplement, the Company expects the net proceeds from the sale of securities will be used to support the Development Projects, capital expenditures, working capital and for other general corporate purposes, including servicing debt obligations. The Company may also use a portion of the net proceeds to acquire or invest in businesses, products and technologies that are complementary to our business.

From time to time, we may pursue various strategic business opportunities. These opportunities may include proposed development and/or management of, investment in or ownership of additional gaming operations through direct investments, acquisitions, joint venture arrangements and other transactions. We are not currently exploring such opportunities. We can provide no assurance that we will successfully identify such opportunities or that, if we identify and pursue any of these opportunities, any of them will be consummated.

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Our common stock is transferable subject to the provisions of Section 303 of the Racing, Pari-Mutuel Wagering and Breeding Law, so long as we hold directly or indirectly, a racetrack license issued by the NYSGC, and may be subject to compliance with the requirements of other laws pertaining to licenses held directly or indirectly by us. The owners of common stock issued by us may be required by regulatory authorities to possess certain qualifications and may be required to dispose of their common stock if the owner does not possess such qualifications.

Contractual Obligations

The table below lists the payment commitments of the Company as of September 30, 2018.

	Payments due by period (in thousands)
	Total		Less than 1 year		1 – 3 years		3 – 5 years		Years 6 - 40
Casino Lease (a)	$	379,499	$	7,500	$	15,350	$	16,200	$	340,449
Golf Course Lease (b)	8,146		25		300		300		7,521
Entertainment Project Lease (c)	8,292		113		300		300		7,579
Term B Loan (d)	447,750		4,500		9,000		9,000		425,250
Term A Loan (e)	66,500		8,750		21,000		21,000		15,750
Equipment Loans (f)	24,945		15,193		9,752		—		—
Bangkok Bank Loan (g)	18,000		—		18,000		—		—
Operating leases (h)	3,599		1,972		1,627		—		—
Revolving Credit Facility (i)	15,000		—		—		15,000		—
Kien Huat Subordinate Loan (j)	20,000		—		20,000		—		—
Total	$	991,731	$	38,053	$	95,329	$	61,800	$	796,549

(a) Annual fixed rent payments under the Casino Lease are as follows: (i) beginning March 2017 through August 2018, payments of $1 million per month; (ii) beginning September 2018, payments of $625,000 per month escalating every five years by 8% through the end of the lease term.

(b) Annual fixed rent payments under the Golf Course Lease are as follows: (i) $0 prior to the date the golf course opens for business to the public (the “Golf Course Opening Date”), which is expected to be in Summer 2019; (ii) $150,000 for the first 10 years following the Golf Course Opening Date; and (iii) $250,000 thereafter for the remainder of the term of the Golf Course Lease.

(c) Annual fixed rent payments under the Entertainment Project Lease are as follows: (i) $0 prior to the date any portion of Entertainment Project first opens for business to the public (the “EP Opening Date”), which is expected to be in December 2018; (ii) $150,000 for the first 10 years following the EP Opening Date; and (iii) $250,000 thereafter for the remainder of the term of the Entertainment Project Lease.

(d) The Term B Loan is a variable rate instrument. Accordingly, the payments reflected above include only principal amounts.

(e) The Term A Loan is a variable rate instrument. Accordingly, the payments reflected above include only principal amounts.

(f) Equipment loan payments primarily for the purchase of slot machines, software and other equipment for the Casino. The repayment period terms are between 24 and 36 months. These amounts exclude interest payments.

(g) The Bangkok Bank Loan is a variable rate instrument. Accordingly, the payments reflected above include only principal amounts.

(h) Operating lease payments for the short-term lease of slot machines, copiers and other Casino equipment. The lease periods extend from six months to 36 months.

(i) The Revolving Credit Facility is a variable rate instrument. Accordingly, the payments reflected above include only principal amounts.

(j) The Kien Huat Subordinate Loan includes accrued cumulative compounded interest and matures on December 20, 2020.

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Off-balance Sheet Arrangements

None.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The interest rate on the Term B Loan entered into on January 24, 2017 contains a variable component based on one-month LIBOR. However, the Interest Rate Cap entered into in February 2017 provided a limit on our exposure to increases in one-month LIBOR on $415 million from May 1, 2017 through February 28, 2018 and, for a portion of our Term B Loan balance, provides a limit on our exposure through July 31, 2019. The Company had approximately $66.5 million of Term A Loans outstanding at September 30, 2018. The interest rate on the Term A Loan contains a variable component based on one-month LIBOR. The Company had $15.0 million outstanding under the Revolving Credit Facility at September 30, 2018. The interest rate on the Revolving Credit Facility Loans contains a variable component based on one-month LIBOR. In addition, the Company had $18.0 million of delayed draw term loans outstanding at September 30, 2018 under the Bangkok Bank Loan. The Bangkok Bank Loan matures on December 28, 2019. The interest rate on the Bangkok Bank Loan entered into on December 28, 2017 contains a variable component based on one-month LIBOR. Accordingly, based on outstanding borrowings at September 30, 2018, a one-point increase in LIBOR would increase interest expense (prior to interest capitalization) by approximately $4.0 million for the next 12-month period. 

Item 4. Controls and Procedures.

Evaluation of Controls and Procedures

     We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management has determined, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

We carried out an evaluation as of September 30, 2018 under the supervision and with the participation of management, including our President and Chief Executive Officer and our Chief Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as required by Rule 13a-15 of the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our President and Chief Executive Officer and our Chief Accounting Officer concluded that our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting

There were no changes in our internal controls over financial reporting during the fiscal quarter covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

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PART II- Other Information

Item 1. Legal Proceedings.

We are a party from time to time to various legal actions that arise in the normal course of business. In the opinion of management, the resolution of these other matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows.

Item 1A. Risk Factors.

There have been no material changes in our risk factors from those set forth in our Form 10-K for the year ended December 31, 2017, which should be read in conjunction with this report.

These risks are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

On November 5, 2018, the Company filed a certificate of designations (the "Series F Certificate of Designations") for the Series F Preferred Stock with the Secretary of State of the State of Delaware. A copy of the Series F Certificate of Designations is attached as Exhibit 3.1 hereto and incorporated by referenced herein.

On November 6, 2018, the Company entered into the KH 2018 Preferred Stock Commitment Letter pursuant to which Kien Huat committed to provide equity financing in support of the general corporate and working capital requirements of the Company and its subsidiaries. Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million of Series F Preferred Stock on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and the Certificate of Designations of the Series F Preferred Stock. Kien Huat committed to purchase the Commitment Amount of the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018, (ii) up to $20 million no earlier than February 15, 2019, (iii) up to $20 million no earlier than May 15, 2019, (iv) up to $15 million no earlier than August 15, 2019, (v) up to $37 million no earlier than November 15, 2019 and (vi) up to $22 million no earlier than March 15, 2020. The Company agreed to use its reasonable efforts to secure third-party financing in an amount equal to the Commitment Amount and the Commitment Amount will be reduced by the amount of any third-party financing raised by the Company. However, any equity financing raised by the Company from any person entering into a commercial agreement relating to online gaming and sports betting at the Casino in an amount up to $29 million will not reduce the Commitment Amount. Kien Huat will be entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat. Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

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As previously reported in a Current Report on Form 8-K,dated January 3, 2018, on December 28, 2017, the Company entered into the Bangkok Bank Loan Agreement, as amended on June 25, 2018, with Bangkok Bank, as lender, and Monticello Raceway Management, Inc., the Company’s wholly-owned subsidiary, as guarantor. The Bangkok Bank Loan Agreement provides for loans to be made to the Company in an aggregate principal amount of up to $20 million. The Company previously drew down $16 million and $2 million on the Bangkok Bank Loan on December 28, 2017 and on August 30, 2018, respectively. On November 7, 2018, the Company drew down $2 million under the Bangkok Bank Loan at LIBOR plus 6.25%, for a total of $20 million drawn down under the Bangkok Bank Loan. The proceeds of the Bangkok Bank Loan are being used for general corporate purposes.

Item 6. Exhibits.

3.1	Certificate of the Designations, Powers, Preferences and Rights of the Series F Convertible Preferred Stock, filed with the Secretary of State of the State of Delaware on November 5, 2018.
31.1	Section 302 Certification of Principal Executive Officer.
31.2	Section 302 Certification of Principal Financial Officer.
32.1	Section 906 Certification of Principal Executive Officer
32.2	Section 906 Certification of Principal Financial Officer.
101	Interactive Data File (XBRL).

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SIGNATURES

In accordance with the requirements of Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EMPIRE RESORTS, INC.
By:	/s/ Ryan Eller
	Name:	Ryan Eller
	Title:	President and Chief Executive Officer (Principal Executive Officer)
	Date:	November 7, 2018

In accordance with the requirements of the Securities Exchange Act of 1934, the registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EMPIRE RESORTS, INC.
By:	/s/ Jamie M. Sanko
	Name:	Jamie M. Sanko
	Title:	Chief Accounting Officer (Principal Financial and Accounting Officer)
	Date:	November 7, 2018

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EX-3.1

EXECUTION VERSION

CERTIFICATE OF THE DESIGNATIONS, POWERS,

PREFERENCES AND RIGHTS

OF THE

SERIES F CONVERTIBLE PREFERRED STOCK

($0.01 PAR VALUE PER SHARE)

OF

EMPIRE RESORTS, INC.

A DELAWARE CORPORATION

----------

PURSUANT TO SECTION 151 OF THE

GENERAL CORPORATION LAW OF THE STATE OF DELAWARE

----------

The undersigned officers of Empire Resorts, Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “Corporation”), do hereby certify:

That pursuant to the authority conferred upon the Corporation’s Board of Directors by the Certificate of Incorporation of the Corporation, as amended (the “Certificate of Incorporation”), the Board of Directors authorized the series of preferred stock hereinafter provided for and established the voting powers thereof and has adopted the following resolution creating a series of 1,500 shares of preferred stock designated as “Series F Convertible Preferred Stock”:

RESOLVED, that pursuant to the authority vested in the Board of Directors of this Corporation in accordance with the provisions of its Certificate of Incorporation, a new series of preferred stock of the Corporation is hereby created and designated as Series F Convertible Preferred Stock, $0.01 par value per share (the “Series F Preferred Stock”).

The designation and amount and the voting powers, preferences and relative, participating, optional and other special rights of the shares of Series F Preferred Stock, and the qualifications, limitations or restrictions thereof are as set forth below in this Certificate of Designations, Preferences and Rights of Series F Convertible Preferred Stock (the “Certificate”):

1. DESIGNATIONS AND AMOUNT. One Thousand Five Hundred (1,500) shares of the Preferred Stock of the Corporation, $0.01 par value per share, shall constitute a class of Preferred Stock designated as "Series F Preferred Stock" (the "Series F Preferred Stock"). The Series F Preferred Stock shall be offered for sale at a purchase price of $100,000 per share and shall have a stated value of $100,000 per share (the “Stated Value”).

2. DIVIDENDS. Except for stock dividends or distributions for which adjustments are to be made pursuant to Section 5 herein, the holders of shares of Series F Preferred Stock shall be entitled to receive, and the Corporation shall pay, dividends on shares of Series F Preferred Stock equal (on an as-if-converted-to-Common-Stock basis) to and in the same form as dividends actually paid on shares of the common stock, par value $0.01 per share, of the Corporation (the “Common Stock”), when, as and if such dividends are

paid on shares of the Common Stock. No other dividends shall be paid on shares of Series F Preferred Stock, subject to and in accordance with Section 5 herein.

3. RIGHTS ON LIQUIDATION, DISSOLUTION OR WINDING UP, ETC. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation (each, a “Liquidation”), no distribution shall be made to the holders of Junior Securities (as defined in Section 6) unless, prior thereto, the holders of such shares of Series F Preferred Stock shall have received the Stated Value per share (the “Liquidation Value”), plus an amount equal to all declared, and accrued but unpaid dividends and distributions thereon to the date of such payment. For the avoidance of any doubt, a Change of Control Transaction (as defined in Section 4(b)(iii) herein) shall not be deemed a Liquidation.

4. RIGHT TO CONVERT.

(a)     Conversion at Option of Holder. At any time and from time to time prior to December 31, 2038 (the “Maturity Date”), the Series F Preferred Stock is convertible in whole or in part, at the option of the holder of the Series F Preferred Stock, into shares (the “Conversion Shares”) of Common Stock upon surrender of the Series F Preferred Stock, at the office of the Corporation, accompanied by a written notice of conversion in a form reasonably satisfactory to the Corporation, duly executed by the registered holder or its duly authorized attorney. The Series F Preferred Stock shall be convertible at any time into shares of Common Stock in such amount equal to (a) the Stated Value divided by $20.00 (the “Base Conversion Price”) (subject to the adjustments as provided for in Section 5 herein), multiplied by (b) the number of shares of Series F Preferred Stock being converted. In the event the Series F Preferred Stock is converted in part, the Corporation shall deliver a new certificate of like tenor in the amount equal to the remaining balance of the Series F Preferred Stock after giving effect to such partial conversion. Following any conversion of the Series F Preferred Stock, the holder of the Conversion Shares received in connection with such conversion shall be entitled to receive any dividends that were declared but unpaid at the time of such conversion if and to the extent that such holder would have been entitled to receive such dividend under Section 2 had the conversion not occurred.

(b)    Mandatory Conversion.

(i)Unless the holder has given notice of conversion pursuant to Section 4(a) prior to the Maturity Date, each Series F Preferred Stock that is outstanding on the Maturity Date shall automatically be converted into that number of shares of Common Stock determined by dividing the Stated Value of such share of Series F Preferred Stock by the volume-weighted average price for a share of Common Stock as displayed under the heading “Bloomberg VWAP” on Bloomberg page “NYNY <equity> AQR” for the ninety (90) consecutive Trading Days ending on the Trading Day immediately prior to the Maturity Date. As used herein, “Trading Day” means a day on which national stock exchanges are open for trading.

(ii)In the event of a Change of Control Transaction, each share of Series F Preferred Stock shall automatically be converted into that number of shares of Common Stock determined by dividing the Stated Value of such share of Series F Preferred Stock by the per share consideration being offered to any holder of Common Stock in connection with any such Change of Control Transaction. Following any such conversion, the holder of the Conversion Shares received in connection with such conversion shall be entitled to participate in such Change of Control Transaction and to receive the same per share consideration, in both amount and form, that any other holder of Common Stock is entitled to receive as a result of such Change of Control Transaction. The Corporation shall provide the holder of the Series F Preferred Stock with notice of any such proposed Change of Control Transaction prior to the record date (or effective date, as the case may be) for such transaction and such holder shall have the right to provide a written notice of conversion

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pursuant to Section 4(a) at any time prior to the record date (or effective date, as the case may be) relating to such Change of Control Transaction.

(iii)As used herein, “Change of Control Transaction” means the occurrence after the date hereof of:

(I)         A tender offer (or series of related offers) shall be made and consummated for the ownership of 50% or more of the outstanding voting securities of the Corporation, unless as a result of such tender offer more than 50% of the outstanding voting securities of the surviving or resulting corporation or entity shall be owned in the aggregate by (A) the stockholders of the Corporation (as of the time immediately prior to the commencement of such offer), or (B) any employee benefit plan of the Corporation or its subsidiaries, and their affiliates;

(II)        The Corporation shall be merged or consolidated with another corporation, unless as a result of such merger or consolidation more than 50% of the outstanding voting securities of the surviving or resulting corporation or entity shall be owned in the aggregate by (A) the stockholders of the Corporation (as of the time immediately prior to such transaction); provided, that a merger or consolidation of the Corporation with another company which is controlled by persons owning more than 50% of the outstanding voting securities of the Corporation shall constitute a Change of Control Transaction unless the Board of Directors, in its discretion, determines otherwise, or (B) any employee benefit plan of the Corporation or its subsidiaries, and their affiliates; or

(IV)       A Person (as defined below) shall acquire 50% or more of the outstanding voting securities of the Corporation (whether directly, indirectly, beneficially or of record), unless as a result of such acquisition more than 50% of the outstanding voting securities of the surviving or resulting corporation or entity shall be owned in the aggregate by (A) the stockholders of the Corporation (as of the time immediately prior to the first acquisition of such securities by such Person), or (B) any employee benefit plan of the Corporation or its subsidiaries, and their affiliates. As used herein, “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; however, a Person shall not include (A) the Corporation or any of its subsidiaries; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Corporation or any of its subsidiaries; (C) an underwriter temporarily holding securities pursuant to an offering of such securities; or (D) a corporation owned, directly or indirectly, by the stockholders of the Corporation in substantially the same proportion as their ownership of stock of the Corporation.

(c)    Share Reserve. So long as any shares of Series F Preferred Stock are outstanding, the Corporation shall reserve and keep available out of its duly authorized but unissued shares of Common Stock such number of Common Stock and other securities as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series F Preferred Stock.

5.    CERTAIN ADJUSTMENTS; ADDITIONAL RIGHTS.

(a)    Stock Dividends and Stock Splits. If the Corporation, at any time while this Series F Preferred Stock is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions that is payable in shares of Common Stock on shares of Common Stock or any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Corporation upon conversion of, or payment of a dividend on, this Series F Preferred Stock), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of the Corporation, then the

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applicable conversion price shall be (a) multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding any treasury shares of the Corporation) outstanding immediately before such event, and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event or (b) as otherwise customarily calculated in accordance with any similar calculations previously agreed to by the parties consistent with their past practice. Any adjustment made pursuant to this Section 5(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re classification.

(b) Subsequent Rights Offerings. If at any time the Corporation grants, issues or sells any Common Stock or rights to purchase stock, warrants, securities or other property pro rata to all (or substantially all) of the record holders of any class of shares of Common Stock (the “Purchase Rights”), then each holder of Series F Preferred Stock will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which such holder could have acquired if such holder had held the number of shares of Common Stock acquirable upon complete conversion of such holder’s Series F Preferred Stock immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

6. RANK. The Series F Preferred Stock shall rank, with respect to the rights, preferences and privileges, including but not limited to the distribution of assets, senior to all classes or series of equity securities of the Corporation (the “Junior Securities”) except the Series B Preferred Stock, par value $.01 per share, of the Corporation, which is and shall remain senior in all respects to the Series F Preferred Stock.

7. VOTING RIGHTS. The holders of Series F Preferred Stock shall be entitled to notice of all stockholders’ meetings in accordance with the By-laws of the Corporation and to vote on all matters submitted to the vote of the holders of Common Stock on an as-converted basis and not as a separate class, except as required by law. Each share of Series F Preferred Stock shall represent such number of votes as shall equal the number of shares of Common Stock into which such share is convertible at such time in accordance with the provisions of Section 4 hereof; provided, that the Corporation shall not, without the affirmative vote of the holders of a majority of the then-outstanding shares of the Series F Preferred Stock, voting together as a single class and without a separate vote of the holders of Common Stock, amend its Certificate of Incorporation, this Certificate or the by-laws of the Corporation in any manner to increase or decrease the number of authorized shares of Common Stock or in any manner that would otherwise adversely affect the rights, preferences or privileges of the holders of the Series F Preferred Stock; and provided, further, that any such increase or decrease to the number of authorized shares of Common Stock referenced in the foregoing proviso shall be subject to the Corporation’s obligation to maintain sufficient authorized shares of Common Stock to meet any reasonably foreseeable event pursuant to which the then-outstanding shares of Series F Preferred Stock would be convertible pursuant to Section 4.

8. MISCELLANEOUS.

(a)Amendments in Writing. Except as otherwise provided herein, the provisions of the Series F Preferred Stock may be amended and the Corporation may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Corporation has obtained the written consent of the holders representing at least a majority of the outstanding Series F Preferred Stock.

(b)Stamp or Transfer Tax. The Corporation will pay any documentary stamp or transfer taxes attributable to the initial issuance of the Common Stock issuable upon the conversion of the Series F Preferred

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Stock; provided, however, that the Corporation shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates for the Common Stock in a name other than that of the holder of Series F Preferred Stock in respect of which such Common Stock is issued, and in such case the Corporation shall not be required to issue or deliver any certificate for the Common Stock until the person requesting the same has paid to the Corporation the amount of such tax or has established to the Corporation's satisfaction that such tax has been paid.

(c)Mutilated, Lost, Stolen or Destroyed Certificate. In case the Series F Preferred Stock certificate shall be mutilated, lost, stolen or destroyed, the Corporation shall issue and deliver in exchange and substitution for and upon cancellation of the mutilated certificate, or in lieu of and substitution for the certificate, mutilated, lost, stolen or destroyed, a new certificate of like tenor and representing an equivalent right or interest, but only upon receipt of evidence reasonably satisfactory to the Corporation of such loss, theft or destruction and an indemnity or bond, if requested, also reasonably satisfactory to it.

*********************

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IN WITNESS WHEREOF, the Corporation has caused this Certificate of Designations, Preferences and Rights to be signed in its name and on its behalf on this 5th day of November, 2018 by a duly authorized officer of the Corporation.

EMPIRE RESORTS, INC.

By:  _/s/ Ryan Eller_________________Name: Ryan Eller

Title: President and Chief Executive Officer

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Ryan Eller, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Empire Resorts, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2018	/s/ Ryan Eller
	Ryan Eller
	Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Jamie M. Sanko, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Empire Resorts, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 7, 2018	/s/ Jamie M. Sanko
	Jamie M. Sanko
	Chief Accounting Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Empire Resorts, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), I, Ryan Eller, Chief Executive Officer, do hereby certify, to my knowledge:

(1) The Quarterly Report fully complies with the requirements of Section 13(a), or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: November 7, 2018
By:	/s/ Ryan Eller
	Ryan Eller
	President, Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to Empire Resorts, Inc. and will be retained by Empire Resorts, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Empire Resorts, Inc. (the “Company”) on Form 10-Q for the quarterly period ended September 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), I, Jamie M. Sanko, Chief Accounting Officer and Principal Financial Officer, do hereby certify, to my knowledge:

(1) The Quarterly Report fully complies with the requirements of Section 13(a), or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: November 7, 2018
By:	/s/ Jamie M. Sanko
	Jamie M. Sanko
	Chief Accounting Officer (Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Empire Resorts, Inc. and will be retained by Empire Resorts, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 07, 2018
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Entity Registrant Name	EMPIRE RESORTS INC
Entity Central Index Key	0000906780
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		32,717,491
Entity Small Business	false
Entity Emerging Growth Company	false

XML

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 18,390	$ 10,380
Restricted cash	502	693
Accounts receivable, net	10,843	1,273
Inventory	2,418	174
Prepaid expenses and other current assets	5,619	3,376
Total current assets	37,772	15,896
Property and equipment, net	659,737	26,863
Capitalized Development Projects costs	19,544	566,797
Restricted cash and investments for Development Projects	64,178	136,431
Intangible asset, net	46,794	51,000
Cash collateral for deposit bond	0	35,000
Other assets	3,307	251
Total assets	831,332	832,238
Current liabilities:
Accounts payable	10,195	2,686
Current portion of long-term debt	28,118	14,588
Accrued Development Projects costs	27,945	71,712
Accrued expenses and other current liabilities	33,941	7,320
Total current liabilities	100,199	96,306
Long-term loan, related party, net of debt issuance costs	20,064	0
Long-term debt, net of current portion	518,645	455,148
Other long-term liabilities	7,555	9,463
Total liabilities	646,463	560,917
Commitments and Contingencies
Stockholders’ equity:
Common stock	327	326
Additional paid-in capital	577,736	572,342
Accumulated other comprehensive loss	(89)	(315)
Accumulated deficit	(393,105)	(301,032)
Total stockholders’ equity	184,869	271,321
Total liabilities and stockholders’ equity	831,332	832,238
Series B
Stockholders’ equity:
Preferred stock	$ 0	$ 0

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (shares)	32,717,000	32,560,000
Common stock, shares outstanding (shares)	32,717,000	32,560,000
Series B
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, per share liquidation value (usd per share)	$ 29	$ 29
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (shares)	44,000	44,000
Preferred stock, shares outstanding (in shares)	44,000	44,000

XML

Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Gross revenues	$ 59,948	$ 20,332	$ 142,606	$ 53,740
Less: Promotional allowances	0	(1,619)	0	(3,072)
Net revenues	59,948	18,713	142,606	50,668
Operating costs and expenses:
Selling, general and administrative	19,754	4,730	44,787	14,158
Development Projects	452	5,196	12,084	13,881
Amortization of gaming license	1,577	0	4,206	0
Depreciation	7,864	390	20,325	1,115
Total operating costs and expenses	77,838	25,557	201,781	70,698
Loss from operations	(17,890)	(6,844)	(59,175)	(20,030)
Interest expense	(15,932)	(4,833)	(33,385)	(16,546)
Interest income	106	805	635	2,337
Loss before income taxes	(33,716)	(10,872)	(91,925)	(34,239)
Income tax provision	0	0	0	0
Net loss	(33,716)	(10,872)	(91,925)	(34,239)
Unrealized income (loss) on Interest Rate Cap	39	(99)	226	(489)
Dividends on Preferred Stock	(32)	(32)	(96)	(96)
Net loss applicable to common stockholders	$ (33,748)	$ (10,904)	$ (92,021)	$ (34,335)
Weighted average common shares outstanding, basic (shares)	32,689	30,973	32,653	30,975
Weighted average common shares outstanding, diluted (shares)	32,689	30,973	32,653	30,975
Loss per common share, basic (usd per share)	$ (1.03)	$ (0.35)	$ (2.82)	$ (1.11)
Loss per common share, diluted (usd per share)	$ (1.03)	$ (0.35)	$ (2.82)	$ (1.11)
Comprehensive loss	$ (33,677)	$ (10,971)	$ (91,699)	$ (34,728)
Gaming
Revenues:
Gross revenues	47,381	17,833	115,706	46,956
Operating costs and expenses:
Cost of goods and services sold	35,737	12,739	91,547	34,384
Racing
Revenues:
Gross revenues	1,368	1,438	3,926	4,161
Operating costs and expenses:
Cost of goods and services sold	2,223	1,312	5,948	3,771
Food and beverage
Revenues:
Gross revenues	6,452	794	13,593	1,892
Operating costs and expenses:
Cost of goods and services sold	7,526	1,136	17,108	3,174
Room
Revenues:
Gross revenues	2,826	0	5,285	0
Operating costs and expenses:
Cost of goods and services sold	2,662	0	5,622	0
Other
Revenues:
Gross revenues	1,921	267	4,096	731
Operating costs and expenses:
Other	$ 43	$ 54	$ 154	$ 215

XML

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows provided by (used in) operating activities:
Net loss	$ (91,925)	$ (34,239)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	20,325	1,115
Amortization of gaming license	4,206	0
Amortization of debt issuance costs	3,143	3,955
Net recovery of doubtful accounts	(17)	0
Non-cash interest expense	334	2,794
Loss on disposal of property and equipment	0	42
Stock-based compensation	2,042	2,213
Warrants issued in legal settlement
Accounts receivable	(9,553)	(138)
Inventories	(2,244)	(4)
Prepaid expenses and other current assets	(2,242)	601
Accounts payable	7,509	(195)
Accrued expenses and other current liabilities	26,087	170
Net cash used in operating activities	(42,335)	(23,686)
Cash flows provided by (used in) investing activities:
Purchase of property and equipment	(932)	(1,823)
Capitalized Development Projects costs	(148,783)	(201,405)
Repayment of equipment loans	35,000	(20,000)
Net change in investments for Development Projects	94,450	(189,845)
Other	13	8
Net cash used in investing activities	(20,252)	(413,065)
Cash flows provided by (used in) financing activities:
Proceeds from related party equity contribution	0	32,000
Proceeds from Bangkok Bank Loan	2,000	0
Series B Preferred Stock dividend payment	(96)	(96)
Proceeds from exercise of stock options and option matching rights	50	0
Payment of debt issuance costs and Interest Rate Cap fees	(598)	(22,878)
Other payments	(966)	(275)
Net cash provided by financing activities	92,602	450,622
Net increase in cash, cash equivalents and restricted cash	30,015	13,871
Cash, cash equivalents and restricted cash, beginning of period	53,055	38,474
Cash, cash equivalents and restricted cash, end of period	83,070	52,345
Supplemental disclosures of cash flow information:
Cash paid for interest	31,934	27,710
Non-cash investing and financing activities:
Accrued Development Projects costs	27,945	75,291
Term Loan Facility, Term B Loan [Member]
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt	0	441,871
Term Loan Facility, Term A Loan [Member]
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt	70,000	0
Fifth Third Revolver [Member]
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt	15,000	0
Proceeds from related party long-term loan	20,000	0
Term Loan Facility, Term Loans [Member]
Cash flows provided by (used in) financing activities:
Repayment of loans	(5,750)	0
Equipment Loans [Member]
Cash flows provided by (used in) financing activities:
Repayment of loans	$ (7,038)	$ 0

XML

Organization and Nature of Business

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Business

Organization and Nature of Business

Overview

Empire Resorts, Inc. (“Empire,” and, together with its subsidiaries, the “Company,” “us,” “our” or “we”) was organized as a Delaware corporation on March 19, 1993, and since that time has served as a holding company for various subsidiaries engaged in the hospitality and gaming industries.

Our indirect, wholly-owned subsidiary, Montreign Operating Company, LLC, doing business as Resorts World Catskills ("Montreign Operating"), owns and operates Resorts World Catskills, a casino resort (the "Casino"), which opened to the public on February 8, 2018. The Casino is located in Sullivan County, New York, approximately 90 miles from New York City. Montreign Operating is the sole holder of a gaming license (a "Gaming Facility License") issued by the New York State Gaming Commission ("NYSGC") in the Hudson Valley-Catskill region, which consists of Columbia, Delaware, Dutchess, Greene, Orange, Sullivan and Ulster counties in New York State.

In addition to the Casino, Empire Resorts Real Estate I, LLC ("ERREI") and Empire Resorts Real Estate II, LLC ("ERREII" and, together with Montreign Operating and ERREI, the "Project Parties"), each of which is a wholly-owned subsidiary of Montreign Operating, are developing an entertainment village (the "Entertainment Project") and a golf course (the "Golf Course Project" and, together with the Casino and the Entertainment Project, the "Development Projects"), respectively, at the site of a four-season destination resort in Sullivan County, New York.

Through our wholly-owned subsidiary, Monticello Raceway Management, Inc. ("MRMI"), we own and operate Monticello Casino and Raceway, which began racing operations in 1958 in Monticello, New York, which is proximate to the Casino. Monticello Casino and Raceway currently features a video gaming machine ("VGM") and harness horseracing facility. We also generate racing revenues through pari-mutuel wagering on the running of live harness horse races, the import simulcasting of harness and thoroughbred horse races from racetracks across the country and internationally, and the export simulcasting of our races to offsite pari-mutuel wagering facilities.

Recent Events

Kien Huat 2018 Preferred Stock Commitment Letter

On November 6, 2018, the Company entered into a letter agreement (the “KH 2018 Preferred Stock Commitment Letter”) with Kien Huat Realty III Limited ("Kien Huat") pursuant to which Kien Huat committed to provide equity financing in support of the general corporate and working capital requirements of the Company and its subsidiaries. Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million (the "Commitment Amount") of Series F Preferred Stock, $0.01par value per share (the "Series F Preferred Stock") of the Company on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and in accordance with the terms of the Certificate of Designations of the Series F Preferred Stock, which the Company filed with the Secretary of State of the State of Delaware on November 5, 2018. Kien Huat committed to purchase the Commitment Amount of the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018, (ii) up to $20 million no earlier than February 15, 2019, (iii) up to $20 million no earlier than May 15, 2019, (iv) up to $15 million no earlier than August 15, 2019, (v) up to $37 million no earlier than November 15, 2019 and (vi) up to $22 million no earlier than March 15, 2020. The Company agreed to use its reasonable efforts to secure third-party financing in an amount equal to the Commitment Amount and the Commitment Amount will be reduced by the amount of any third-party financing raised by the Company. However, any equity financing raised by the Company from any person entering into a commercial agreement relating to online gaming and sports betting at the Casino in an amount up to $29 million will not reduce the Commitment Amount. Kien Huat will be entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat. Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

Basis for Presentation

The condensed consolidated financial statements and notes as of September 30, 2018 and December 31, 2017 and for the three- and nine-month periods ended September 30, 2018 and September 30, 2017 include the accounts of Empire and its subsidiaries. All intercompany balances and transactions are eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared under the rules and regulations of the Securities and Exchange Commission ("SEC") applicable for interim periods, and therefore do not include all information necessary for complete financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Our financial statements require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent liabilities. Actual amounts could differ from those estimates. These condensed consolidated financial statements reflect all adjustments (consisting primarily of normal recurring accruals) which are, in the Company’s opinion, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2017. The results of operations for our interim periods may not be necessarily indicative of the results of operations that may be achieved for the entire year.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared on a basis that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. Historically and prospectively, our primary sources of liquidity and capital resources have been, and will continue to be, cash generated from operations, borrowings from banks and proceeds from the issuance of debt and equity securities. Based on our current level of operations and our expected results of operations of the Casino and the remaining Development Projects as they are completed,we believe that cash generated from operations and cash on hand, together with amounts available under our principal debt arrangements and the KH 2018 Preferred Stock Commitment Letter will be sufficient to meet the working capital requirements and the expected remaining costs of the Development Projects over the next 12 months. We cannot be certain that our business will generate sufficient cash flow from operations, that our anticipated earnings from the Development Projects will be realized, or that future borrowings will be available under our existing debt arrangements or otherwise to enable us to service our indebtedness, make anticipated capital expenditures and satisfy working capital needs. As a result, we may need to raise additional capital or incur additional indebtedness, including by issuing securities from our Shelf Registration Statement (as defined below), which has a current availability of approximately $333 million, to finance our plans for growth and general corporate purposes. Our future operating performance and our ability to service our debt will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control. See “Risk Factors” in our Annual Report on Form 10‑K for the fiscal year ended December 31, 2017 for a discussion of the risks related to our liquidity and capital structure.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Reclassifications

Certain amounts in the accompanying consolidated financial statements for the 2017 period have been reclassified to conform to presentation in the 2018 period, most notably, amortization of debt issuance costs has been included within interest expense on the Condensed Consolidated Statement of Operations.

Revenue recognition

As described below, the Company adopted the provisions of new accounting standards and updates as codified in the Accounting Standards Codification (ASC) Topic 606 regarding revenue recognition. The Company adopted this guidance as of January 1, 2018 using the modified retrospective approach. Under the modified retrospective approach, amounts presented as of December 31, 2017 and for the three-month and nine-month periods ended September 30, 2017 have not been adjusted to reflect the impact of the ASC Topic 606. This approach does not significantly impact the comparability of the 2018 and 2017 amounts. The promotional allowances recorded in 2017 are no longer presented in 2018 under ASC Topic 606. The adoption of the provisions of ASC 606 resulted in an increase of $54,000 to both “Other accrued liabilities” and “Accumulated deficit” at January 1, 2018. These increases were exclusively the result of remeasuring the loyalty program liability from a deferred cost model to a deferred revenue model. This change only impacts MRMI, since the Casino did not commence operations until February 8, 2018.

The Company’s patron transactions primarily consist of gaming wagers, hotel room and food and beverage purchases. The transaction price for gaming wagers is the difference between gaming wins and losses, not the total amount wagered. The transaction price for hotel room and food and beverage purchases is the net amount collected from the patron for such goods and services. Hotel room and food and beverage goods and services have been determined to be separate, stand-alone transactions and the transaction price for such goods or services is recorded as revenue as they are transferred to the patron over the duration of the patron’s stay at the hotel or when the Company provides the food and beverage services. In the case of a hotel stay involving multiple days, the total transaction price of the stay is recognized on a straight-line basis. The Company collects advanced deposits from hotel patrons for future reservations representing obligations of the Company until the room stay is provided to the patron.

Gaming wagers by patrons who are members of our loyalty programs represent two performance obligations of the Company. Patrons who are members of our loyalty programs earn loyalty points for gaming wagers. Points awarded under our loyalty programs are given to members based on their gaming play and the promise to provide points to members is required to be accounted for as a separate performance obligation. The Company applies a practical expedient by accounting for gaming wagers on a portfolio basis, as such wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to each individual patron. For purposes of allocating the transaction price when loyalty points are earned, the Company allocates an amount to the loyalty point liability based on the stand-alone selling price ("SSP") of the points earned, which is determined by the value of a point that can be redeemed for a hotel room or food and beverage services. An amount is allocated to the gaming wager performance obligation using the residual approach as the stand-alone price for wagers is highly variable and no set established price exists for such wagers. The allocated revenue for gaming wagers is recognized when the wagers occur because all such wagers settle immediately. The loyalty point liability amount is deferred and recognized as revenue when the patron redeems the points for a hotel room stay or for food and beverage services and such goods or services are provided to the patron. Prior to the adoption of ASC 606, we determined our liability for unredeemed points based on the estimated costs of services or merchandise to be provided and estimated redemption rates.

Additionally, outside of our loyalty programs and at our discretion, we offer our patrons complimentary goods and services, primarily food and beverage and hotel room stays. Such complimentaries are provided in conjunction with revenue-generating gaming activity and are largely provided to entice contemporaneous and future revenue-generating gaming activities. We allocate a portion of the transaction price for gaming wagers we receive from such patrons to the complimentary goods and services provided to such patrons using the residual approach. This allocation is based on the estimated SSP of the underlying goods and services provided, which are determined based on observed SSP we receive for selling such goods and services.

Hospitality Revenues: Food and beverage revenues, and room revenues include (i) revenues generated from transactions with patrons for such goods and/or services, (ii) revenues recognized through the redemption of points from our loyalty programs for such goods and/or services, and (iii) revenues generated as a result of providing such goods and/or services on a complimentary basis in conjunction with gaming activities. Food and beverage revenues and room revenues are recognized when goods are delivered and services are performed. In general, performance obligations associated with these transactions are satisfied at a point-in-time, but may also be satisfied over a period of time, which is typically over the course of a patron’s stay. Advance deposits on rooms are reflected as a performance obligation liability until the goods and/or services are provided to the patron. The Company's performance obligation liabilities are included in “Accrued expenses and other accrued liabilities” in our unaudited condensed consolidated balance sheets.

Racing Revenues: Racing revenues include revenue earned from pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks. Some elements of racing revenue from Off-Track Betting Corporations (“OTBs”) are recognized as collected, due to uncertainty of receipt and timing of payments.

Other Revenues: Other revenues primarily include commissions received on ATM transactions and cash advances, as well as lottery tickets, which are recorded on a net basis as the Company represents the agent in its relationship with the third-party service providers. Other revenues also include the sale of retail goods, which are recognized at the time the goods are delivered to the customer.

Subsequent to the adoption of ASC 606, complimentary food and beverage revenues and room revenues are included in food and beverage revenues, room revenues, and other revenues, with a corresponding decrease to gaming revenues, in the unaudited condensed consolidated statements of operations. See “Recent Accounting Pronouncements” for further information regarding the adoption of ASC 606.

Complimentary food and beverage revenues, and complimentary room revenues for the three-month and nine-month periods ended September 30, 2018 and 2017, respectively, were as follows:

	Three Months Ended				Nine Months Ended
	09/30/2018		09/30/2017		09/30/2018		09/30/2017
	(in thousands)				(in thousands)
Complimentary food and beverage revenues	$	3,178	$	212	$	6,350	$	487
Complimentary room revenues	1,378		—		2,328		—

The Company’s performance obligation related to its loyalty point obligation is generally completed within one year, as a patron’s loyalty point balance is forfeited after six months of inactivity, as defined in the loyalty programs. The Company’s liability for its loyalty point performance obligations was $2.1 million and $0.3 million at September 30, 2018 and December 31, 2017, respectively. Loyalty points are generally earned and redeemed continuously over time.

Cash, cash equivalents and restricted cash

Cash and cash equivalents include cash on hand, demand deposits and certificates of deposit with original maturities of three months or less at acquisition. The Company maintains significant cash balances with financial institutions, which are not covered by the Federal Deposit Insurance Corporation. The Company has not incurred any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

The Company has several types of restricted cash accounts. These restrictions are in accordance with the NYSGC regulations. In addition, at September 30, 2018, the Company had restricted cash of $64.2 million from the proceeds of the Term Loan Facility (as defined below) held in the lender-controlled accounts pursuant to the Term Loan Facility.

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows:

	September 30, 2018		December 31, 2017		September 30, 2017		December 31, 2016
	(in thousands)
Cash and cash equivalents	$	18,390	$	10,380	$	6,213	$	11,012
Restricted cash	502		693		920		1,078
Restricted cash for Development Projects	64,178		41,982		45,212		26,384
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	83,070	$	53,055	$	52,345	$	38,474

Restricted cash and investments for Development Projects

Restricted cash and investments for Development Projects represent the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At September 30, 2018, restricted cash and investments for Development Projects of $64.2 million was comprised entirely of cash and cash equivalent balances. At December 31, 2017, restricted cash and investments for Development Projects of $136.4 millionwas comprised of cash and cash equivalent balances of approximately $42.0 million and short-term investments maturing within one year of approximately $94.5 million. At December 31, 2017, short-term investments were comprised of commercial paper of approximately $59.4 million and U. S. Treasury notes of approximately $35.1 million, all with maturities of less than one year. The short-term investments are recorded at amortized cost, which approximates fair value due to their short-term nature.

Accounts receivable

Accounts receivable, net of allowances, are stated at the amount the Company expects to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectibility of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and the Company’s judgment of collectibility. The Company extends credit to certain gaming patrons upon completion of a credit application process. Gaming patrons are expected to repay gaming markers within a predetermined period of time, the Company also settles wagers for other racetracks and is exposed to credit risk. These amounts are included in accounts receivable. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recorded an allowance for doubtful accounts of approximately $154,000 and $171,000 at September 30, 2018 and December 31, 2017, respectively.

Capitalized Interest

Interest costs incurred in connection with the construction of the Casino and the Development Projects have been capitalized in the cost of the projects. Capitalization will cease when the Casino or the other Development projects are substantially complete or if development activity is suspended for an extended period of time.

The Company capitalized $0.3 million and $8.2 million of interest charges during the three-month periods ending September 30, 2018 and September 30, 2017, respectively, and $11.7 million and $17.6 million for the nine-month periods ended September 30, 2018 and September 30, 2017, respectively.

Other long-term liabilities

The difference between our cash payments and straight-line rent on our land leases of $7.5 million and $8.3 million at September 30, 2018 and December 31, 2017, respectively, is included in other long-term liabilities.

Common stock - loss per share

The Company computes basic loss per share by dividing net loss applicable to common shares by the weighted-average common shares outstanding for the period. Diluted loss per share reflects the potential dilution of earnings that could occur if securities or contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three-month and nine-month periods ended September 30, 2018 and and 2017 were the same.

The following table shows the approximate number of common stock equivalents outstanding at September 30, 2018 and 2017 that could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share for the three-month and nine-month periods ended September 30, 2018 and 2017, because their inclusion would have been anti-dilutive to the loss per common share:

	Outstanding at
	September 30, 2018	September 30, 2017
Unvested Restricted stock	37,000	149,000
Warrants	193,000	133,000
Restricted stock units ("RSUs")	154,000	55,000
Option Matching Rights	—	3,000
Options	11,000	15,000
Total	395,000	355,000

On August 19, 2009, the Company entered into an investment agreement (the "Investment Agreement") with Kien Huat, pursuant to which Kien Huat purchased shares of common stock of the Company during the year ended December 31, 2009. Under the Investment Agreement, if any options or warrants outstanding at the time of the final closing under the Investment Agreement, or the first 200,000 options or warrants granted to directors or officers as of the final closing date under the Investment Agreement, are exercised, Kien Huat has the right to purchase an equal number of additional shares of common stock as are issued upon such exercise at the exercise price for the applicable option or warrant. The Company refers to these rights as the “Option Matching Rights.” The last remaining Option Matching Rights expired in July 2018.

Interest Rate Cap Agreement

In February 2017, the Company entered into an interest rate cap agreement with Credit Suisse AG, International to limit its exposure to increases in interest rates on its Term B Loan (as defined below) from May 1, 2017 through February 28, 2018 and then for a portion of the balance of its Term B Loan through July 31, 2019 (the "Interest Rate Cap"). The Company paid $675,000 for the Interest Rate Cap. The cost of the Interest Rate Cap is amortized over its term as interest expense. The fair value of the Interest Rate Cap was $287,000 at September 30, 2018 and $251,000 at December 31, 2017, and is presented at fair value as "Other Assets" on the Condensed Consolidated Balance Sheet. The difference between the fair value and amortized cost is recorded as an adjustment to accumulated other comprehensive loss.

Accumulated Other Comprehensive Loss

As of September 30, 2018 and December 31, 2017, accumulated other comprehensive loss was $89,000 and $315,000, respectively, and consisted solely of the fair value adjustment relating to the Interest Rate Cap.

Fair value

The Company follows the provisions of ASC 820, “Fair Value Measurement,” issued by the FASB for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The Company chose not to elect the fair value option as prescribed by the FASB for its financial assets and liabilities that had not been previously carried at fair value. The Company’s financial instruments are primarily comprised of current assets, restricted cash and investments, Interest Rate Cap, current liabilities and long-term debt. Current assets, investments and current liabilities approximate fair value due to their short-term nature.

In determining fair value, the Company uses quoted prices and observable inputs.  Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

The fair value hierarchy of observable inputs used by the Company is broken down into three levels based on the source of inputs as follows:

- Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

- Level 2 - Valuations based on inputs that are observable inputs and quoted prices in active markets for similar assets and liabilities.

- Level 3 - Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. 

The following table presents the carrying amount, fair values and classification level within the fair value hierarchy of financial instruments measured or disclosed at fair value on a recurring basis:

	September 30, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Level of Fair Value Hierarchy
Assets:	(in thousands)
Cash and cash equivalents	$	18,390	$	18,390	$	10,380	$	10,380	Level 1
Restricted cash	502		502		693		693		Level 1
Interest Rate Cap	287		287		251		251		Level 2
Restricted cash and investments for Development Projects:
Cash and cash equivalents	64,178		64,178		41,982		41,982		Level 1
Short-term investments	—		—		94,449		94,209		Level 2
Liabilities:
Term B Loan, net of discount	441,635		447,463		443,161		449,749		Level 2
Term A Loan	66,500		66,500		—		—		Level 2
Bangkok Bank Loan	18,000		18,000		16,000		16,000		Level 3
Revolving Credit Facility	15,000		15,000		—		—		Level 2
Related party loan, net of unamortized issuance costs	20,064		20,064		—		—		Level 3
Equipment loans	24,057		24,057		31,095		31,095		Level 3

Stock-based compensation

The cost of all share-based awards to employees, including grants of employee stock options and restricted stock, is recognized in the financial statements based on the fair value of the awards at grant date. The fair value of stock option awards is determined using the Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the market price of Empire’s common stock on the date of grant. The fair value of share-based awards is recognized as stock-based compensation expense on a straight-line basis over the requisite service period from the date of grant. As of September 30, 2018, there was approximately $2.3 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the Company’s equity compensation plan. That cost is expected to be recognized over a period of three years. This expected cost does not include the impact of any future stock-based compensation awards.

Income taxes

The Company applies the asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates for the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Intangible Assets

In accordance with ASC 350, Intangibles - Goodwill and Other, the Company amortizes intangible assets over their estimated useful lives unless the Company determines their lives to be indefinite.

As a condition of the Gaming Facility License, the Company paid a license fee of $51 million on February 25, 2016. The term of the Gaming Facility License is 10 years from the date of grant; however, amortization did not commence until the Casino opened to the public in February 2018. Amortization has been recognized on a straight-line basis beginning in February 2018 and will continue until the license is up for renewal in 2026. The Company will assess the intangible asset for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which provides guidance for accounting for leases. Under ASU 2016-02, the Company will be required to recognize the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard must be adopted using a modified retrospective approach and provides for certain practical expedients. Early adoption is permitted. The Company intends to adopt the standard on January 1, 2019 and apply the package of practical expedients available to it upon adoption. The Company continues to evaluate the effect that ASU 2016-02 will have on consolidated financial statements, but we expect that ASU 2016-02 will have a material effect on the condensed consolidated balance sheets as a result of the recognition of certain leases as right-of-use assets and lease liabilities.

In November 2016, FASB issued ASU 2016-18, "Restricted Cash" Topic 230, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The Company adopted this standard on January 1, 2018 using the retrospective transition method. The impact of the new standard is that the Company's condensed consolidated statements of cash flows now present the change in a combined amount for both restricted and unrestricted cash and cash equivalents for all periods presented.

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Prepaid Expenses and Other Assets

9 Months Ended

Sep. 30, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Prepaid Expenses and Other Assets

Prepaid Expenses and Other Assets

The Company participated in the New York State Empire Zones real estate tax credit program for over 10 years. Under this program, the Company receives a refund for real estate taxes paid during the year, after the end of New York State's fiscal year. Beginning in 2014, the amount of the tax credit received was reduced by 20% each year until the tax credit ended for the Company on December 31, 2017. For the year ended December 31, 2017, the Company will receive a 20% refund for real estate taxes paid, equal to $269,000 in Spring 2019.

The increases in prepaid real estate taxes, advertising, gaming expenses and security deposits are directly related to the opening of the Casino during the current nine-month period. Included in prepaid gaming expenses are $863,000 of annual slot machine and table gaming license fees at the Casino, which are amortized to expense on a straight-line basis.

Prepaid expenses and other current assets, as presented on the balance sheet, are comprised of the following at September 30, 2018 and December 31, 2017:

	9/30/2018		12/31/2017
	(in thousands)
Empire Zones real estate tax credit	$	269	$	814
Prepaid real estate taxes	1,082		443
Prepaid insurance	312		327
Prepaid advertising	160		—
Prepaid gaming expenses	1,039		74
Prepaid maintenance contracts	931		476
Development escrow and refundable security deposit	987		780
Prepaid other	839		462
Total prepaid expenses and other current assets	$	5,619	$	3,376

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Property and Equipment

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment at September 30, 2018 and December 31, 2017 consists of the following:

	9/30/2018			12/31/2017
	(in thousands)
Land	$	770		$	770
Land improvements	2,110			1,759
Buildings	579,203			4,727
Building improvements	76,740			29,874
Furniture, fixtures and equipment	35,483			5,551
Construction in Progress	1,651			77
	695,957			42,758
Less: Accumulated depreciation	(36,220		)	(15,895		)
	$	659,737		$	26,863

The $653.2 million increase in property and equipment was primarily due to the reclassification of capitalized Project Development costs to buildings, building improvements and furniture, fixtures and equipment during the nine-month period ended September 30, 2018. At September 30, 2018, $19.5 million remains classified as capitalized Project Development costs reflecting the ongoing construction of the Development Projects.

Depreciation expense was approximately $7.9 million and $0.4 million for the three-month periods ended September 30, 2018 and 2017, respectively, and approximately $20.3 million and $1.1 million for the nine-month periods ended September 30, 2018 and 2017, respectively.

The VGMs at Monticello Casino and Raceway are owned by the NYSGC and, accordingly, the Company's consolidated financial statements include neither the cost nor the depreciation of those devices.

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Development Projects Costs

9 Months Ended

Sep. 30, 2018

Project Development Costs [Abstract]

Development Projects Costs

Development Projects Costs

Capitalized Project Development Costs

At September 30, 2018 and December 31, 2017, total Capitalized Project Development costs incurred were approximately $19.5 million and $566.8 million, respectively. Total Capitalized Development Project costs at September 30, 2018 consisted of $17.4 million of construction costs, site development, contractor insurance, general conditions, architectural fees and construction manager fees, and approximately $2.1 million of professional service fees including legal and accounting fees. Total Capitalized Project Development costs at December 31, 2017 consisted of $560.2 million of construction costs, site development, contractor insurance, general conditions, architectural fees and construction manager fees, and approximately $6.6 million of professional service fees, including legal and accounting fees, and is reflected on the balance sheet as Capitalized Development Project costs. The Casino opened for business on February 8, 2018, after receiving an operating certificate from the NYSGC.

ERREI entered into a standard contractor agreement with normal and customary terms with Petillo, Inc., related to the construction of the Golf Course Project, at a cost of approximately $21.2 million. The Company began construction in September 2018 and anticipates the Golf Course will be open for play during Summer 2019.

Cash Collateral for Deposit Bond

In February 2016 and June 2017, the Company deposited $15 million and $20 million, respectively, in performance bonds to guarantee the completion of the Development Projects. On December 28, 2017, the Company notified the NYSGC that it had expended 85% of the Company's required minimum capital investment in the Development Projects. On January 4, 2018, the NYSGC notified the Company that it had confirmed that such minimum capital investment criteria as required by the Gaming Act had been met and the funds returned to the Company were deposited into a lender-controlled account for use towards Development Projects expenses.

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Accrued Expenses and Other Current Liabilities

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Accrued Development Projects costs at September 30, 2018 and December 31, 2017 were $27.9 million and $71.7 million, respectively, and were primarily comprised of amounts due to the construction managers for costs incurred for the Development Projects, as well as amounts due to the architect and other vendors. The proceeds from the Term Loan Facility will be used to pay the accrued Development Project costs.

Accrued expenses and other current liabilities, as presented on the condensed consolidated balance sheet, are comprised of the following at September 30, 2018 and December 31, 2017:

	9/30/2018		12/31/2017
	(in thousands)
Liability for horseracing purses	$	1,164	$	886
Accrued payroll	5,494		1,715
Deferred revenue - loyalty points	2,065		271
Liability to the NYSGC	2,836		1,507
Liability for local progressive jackpot	2,452		1,110
Accrued premium game leases	880		—
Accrued professional fees	2,136		744
Accrued interest expense	9,279		14
Accrued utilities	792		81
Accrued other	6,843		992
Total accrued expenses and other current liabilities	$	33,941	$	7,320

The increase in deferred revenue - loyalty points at September 30, 2018 of $1.8 million primarily reflects the increase in deferred revenues due to the increase in loyalty points earned by new customers as a result of the Casino opening. The liability to the NYSGC represents the amounts payable for taxes assessed by the NYSGC from gaming operations at the Company's facilities. The liability for local progressive jackpot represents the liability the Casino and the Monticello Casino and Raceway has incurred for all progressive jackpot games at each period ending date. Accrued premium game leases represent accruals for short-term slot machine leases for certain popular games.

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Long-Term Debt

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-term Debt

Long-term debt, other than Related Party debt, consisted of the following at September 30, 2018 and December 31, 2017:

	9/30/2018			12/31/2017
	(in thousands)
Term B Loan (stated amount less unamortized discount)	$	441,635		$	443,161
Term A Loan	66,500			—
Bangkok Bank Loan	18,000			16,000
Revolving Credit Facility	15,000			—
Equipment Loans	24,057			31,095
Total long-term debt	565,192			490,256
Debt issuance costs	(18,429		)	(20,520		)
Total long-term debt, net	546,763			469,736
Less: Current portion of long-term debt	(28,118		)	(14,588		)
Long term-debt, net of current portion	$	518,645		$	455,148

Term Loan Facility

At September 30, 2018, Montreign Operating's senior secured term loan facility (the "Term Loan Facility") consisted of $66.5 million outstanding under the Term A loan (the "Term A Loan") and $441.6 million outstanding (net of original issue discount) under the Term B loan (the "Term B Loan"). Pursuant to the Building Term Loan Agreement (as amended, the "Term Loan Agreement"), among Montreign Operating, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as administrative agent, the Term A Loan is fully drawn in accordance with the Term Loan Agreement, which required the Company to complete the draw down of the Term A Loan by July 24, 2018. The Term A Loan will mature on January 24, 2022 and the Term B Loan will mature on January 24, 2023. Interest accrues on outstanding borrowings under the Term A Loan at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. At September 30, 2018, the interest rate on the Term A Loan was 7.35%. Interest accrues on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a floor of 1%) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. At September 30, 2018, the interest rate on the Term B Loan was 10.59%. In addition, Montreign Operating paid a commitment fee to each Term A Loan lender equal to the undrawn amount of such lender’s commitment multiplied by a rate equal to 5.0% per annum through July 24, 2018.

The Company is currently required to make principal payments under the Term B Loan and the Term A Loan at the end of each calendar quarter, which began with the period ended June 30, 2018. The Company repays 1% of the original principal balance of the Term B Loan each year, in quarterly payments of approximately $1.1 million. The Company currently repays 2.5% of the original principal amount of the Term A Loan, in quarterly payments of approximately $1.8 million for the period ending March 31, 2019, and quarterly installments of approximately $2.6 million thereafter. The Company repaid approximately $3.5 million and $2.3 million on the Term A Loan and Term B Loan, respectively, in the nine-month period ended September 30, 2018.

The net proceeds from the Term A Loan and the Term B Loan, which are discussed below, were deposited into a lender controlled account.

The Term Loan Facility is guaranteed by the Project Parties and is secured by security interests in substantially all the real and personal property of the Project Parties and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding Company, LLC ("Montreign Holding"), a wholly-owned subsidiary of Empire.

The Term Loan Facility contains representations and warranties, customary events of default, and affirmative, negative and financial covenants. For example, the Project Parties are restricted from entering into advisory, management or consulting agreements with an affiliate of any of the Project Parties, including Empire, except for payments pursuant to tax sharing agreements, distributions in an amount not exceeding 1% of the net revenues of the Project Parties in any fiscal year, repurchase of capital stock of the Company in an amount not exceeding $1 million and required by the NYSGC, and certain available amounts of cash based on the application of financial covenants. The Term Loan Facility also includes target dates by which the Casino is required to be opened to the public and by which its development must be fully complete (as such concepts are defined in the Term Loan Agreement).

In addition, the Term Loan Agreement requires us to satisfy certain financial covenants, including a maximum first lien leverage ratio, a minimum interest coverage ratio and a limitation on the maximum permissible capital expenditures by the Project Parties. The financial covenants relating to the maximum first lien leverage ratio and the minimum interest coverage ratio will be measured beginning in the first full fiscal quarter following the "Full Opening Date" of the Casino, which is the date on which at least 95% of all rooms in the hotel are open to the public. The Company anticipates that at least 95% of the hotel rooms will be ready to be occupied during the late forth quarter of 2018. As of September 30, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

Mandatory prepayments of the Term Loan Facility will be required upon the occurrence of certain events, including sales of certain assets, casualty events and the incurrence of certain additional indebtedness, subject to certain exceptions and reinvestment rights.

Revolving Credit Facility

At September 30, 2018, Montreign Operating's revolving credit facility (the "Revolving Credit Facility") consisted of $15 million of outstanding borrowings. The Revolving Credit Facility provides for loans or other extensions of credit to be made to Montreign Operating in an aggregate principal amount of up to $15 million (including a letter of credit sub-facility of $10 million) pursuant to the terms of the Revolving Credit Agreement, among Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent (as amended, the "Revolving Credit Agreement"). The proceeds of the Revolving Credit Facility may be used for working capital needs, capital expenditures and other general corporate purposes. The Revolving Credit Facility will mature on January 24, 2022. Interest accrues on outstanding borrowings at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. At September 30, 2018, the interest rate on borrowings under the Revolving Credit Facility was 7.34%.

The Revolving Credit Facility is guaranteed by the Project Parties and is secured by security interests in substantially all the real and personal property of the Project Parties and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding.

The Revolving Credit Facility contains representations and warranties, customary events of default, and affirmative, negative and financial covenants substantially similar to the terms of the Term Loan Agreement. Mandatory prepayments of the Revolving Credit Facility will be required upon the occurrence of certain events, including sales of certain assets, casualty events and the incurrence of certain additional indebtedness, subject to certain exceptions and reinvestment rights. As of September 30, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

Bangkok Bank Loan

At September 30, 2018, the Delayed Draw Term Loan, as amended (the "Bangkok Bank Loan") consisted of $18 million of outstanding borrowings and availability of $2 million pursuant to the Delayed Draw Term Loan Credit Agreement (the “Bangkok Bank Loan Agreement”), among Empire, Bangkok Bank PCL, New York Branch (“Bangkok Bank”), as lender, and MRMI, as guarantor. On November 7, 2018, the Company borrowed the remaining $2 million under the Bank of Bangkok Loan Agreement.

The Bangkok Bank Loan will mature on December 28, 2019. Interest accrues on outstanding borrowings under the Bangkok Bank Loan at a rate equal to LIBOR plus 6.25%, or an alternate base rate plus 5.25% per annum. At September 30, 2018, the interest rate on the Bangkok Bank Loan was 8.49%. In addition, the Company pays a commitment fee to Bangkok Bank equal to the undrawn amount of the Bangkok Bank Loan commitment multiplied by a rate equal to 1.50% per annum. Such commitment fee is paid on the last business day of each quarter and commenced on March 31, 2018.

The Bangkok Bank Loan was amended (the "Bangkok Bank Loan Amendment") on June 25, 2018 concurrently with the execution of the Kien Huat Subordinate Loan Agreement (which is defined and discussed in Note H below). The Bangkok Bank Loan Amendment permitted the Company to incur the Kien Huat Subordinate Loan.

The Bangkok Bank Loan is guaranteed by MRMI and is secured by a security interest in Monticello Casino and Raceway. The Bangkok Bank Loan Agreement contains customary representations and warranties and affirmative, negative and financial covenants, including representations, warranties and covenants that, among other things, restrict the ability of the Company and MRMI to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, engage in certain transactions with affiliates, or make dividends or other distributions. Obligations under the Bangkok Bank Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as applicable), including among others, nonpayment of principal, interest or fees, breach of the affirmative or negative covenants, revocation of a gaming license after the expiration of certain cure periods, and a change of control of the Company.

In addition, the Bangkok Bank Loan Agreement contains a financial covenant that restricts the maximum total leverage ratio to four times the adjusted EBITDA of MRMI, which financial covenant is applicable beginning with the fiscal quarter ending December 31, 2018. The Bangkok Bank Loan Amendment excludes the Kien Huat Subordinate Loan from calculations of the Company's maximum total leverage so long as the Kien Huat Subordinate Loan remains subordinate to the Bangkok Bank Loan. The Company is in compliance with the covenant requirements as of September 30, 2018.

Equipment Loans

The Company has entered into several financing agreements related to the purchase of its slot machines, equipment and software for its telephone, hotel and Casino operations. The original amount financed was $31.1 million and the terms of these agreements run between six and 36 months. The balances outstanding at September 30, 2018 totaled approximately $24.1 million. The stated interest rates for these loans are between zero and eight percent per annum. The Company has imputed interest on several equipment loans with stated interest rates of 0%, using the Company's cost of funds rate of approximately 10%. The weighted average of the monthly principal repayments is approximately $1.0 million.

The following table lists the annual principal repayments due for the Company's long term debt as of September 30, 2018:

Year ending December 31,	Totals
	(in thousands)
2018	$7,711
2019	44,841
2020	20,690
2021	15,815
2022	30,000
2023	452,250
Totals	$571,307

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Long-Term Loans, Related Party

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Long-Term Loans, Related Party

Long-Term Loans, Related Party

Kien Huat Subordinate Loan Agreement

On June 25, 2018, Kien Huat and the Company entered into a loan agreement (the “Kien Huat Subordinate Loan Agreement”), providing for loans of up to $30 million (the “Kien Huat Subordinate Loan”). The Kien Huat Subordinate Loan is subordinate to the Bangkok Bank Loan. The proceeds of the Kien Huat Subordinate Loan may be used exclusively to make capital contributions to Montreign Operating. Montreign may use such funds for marketing and general corporate purposes (including the payment of debt service). All amounts due under the Kien Huat Subordinate Loan will mature on December 28, 2020, which date may be extended for additional one-year periods if the Bangkok Bank Loan is similarly extended or accelerated in the event the Bangkok Bank Loan is accelerated. The maturity of the Kien Huat Subordinate Loan may also be extended for up to one year at the sole discretion of Kien Huat. At September 30, 2018, $20 million was outstanding under the Kien Huat Subordinate Loan and an additional $10 million was advanced on October 16, 2018. The Company paid Kien Huat a commitment fee of $300,000 (or 1% of the principal amount) out of the proceeds of the first advance.

The Kien Huat Subordinate Loan bears interest at a rate of 12% per annum, compounded monthly, and will be payable at maturity. Prior to the maturity of the Kien Huat Subordinate Loan, interest will not be required to be paid in cash and will be added to the outstanding principal of the Kien Huat Subordinate Loan and will thereafter be deemed to be part of the principal indebtedness due thereunder upon maturity. The Kien Huat Subordinate Loan may be repaid in full or in part at any time without premium or penalty.

The Kien Huat Subordinate Loan Agreement contains customary representations and warranties and affirmative covenants, including a restriction on the use of the proceeds of the Kien Huat Subordinate Loan as described above. Obligations under the Kien Huat Subordinate Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as applicable), including among others: nonpayment of principal, interest or fees; breach of the affirmative covenants; and a default in payment of or acceleration of the Bangkok Bank Loan. Additionally, any future amendments to the Bangkok Bank Loan Agreement relating to default provisions thereunder, prepayment provisions or an increase of the maximum principal amount thereunder will be subject to Kien Huat’s prior written consent.

The Company agreed to indemnify and defend Kien Huat and its affiliates from negligent acts or omissions of the Company and its affiliates, any failure of the Company to comply with the terms of the Kien Huat Subordinate Loan Agreement and any failure of the Company to comply with any laws, except to the extent resulting from the gross negligence or willful misconduct of Kien Huat or its affiliates.

Kien Huat Backstop Loan Agreement

On December 28, 2017, Empire and Kien Huat entered into a loan agreement (the "Kien Huat Backstop Loan Agreement"), providing for loans to Empire in an aggregate principal amount of up to $20 million. Any amounts borrowed pursuant to the Kien Huat Backstop Loan Agreement will be used exclusively to make payments required under the Bangkok Bank Loan Agreement and will mature on the one-year anniversary of the maturity date of the Bangkok Bank Loan, or such earlier date that the Bangkok Bank Loan is terminated. At September 30, 2018, there were no outstanding borrowings pursuant to the Kien Huat Backstop Loan Agreement.

The Kien Huat Backstop Loan Agreement contains representations and warranties and affirmative covenants that are usual and customary, including representations, warranties and covenants that restrict the Company’s use of the proceeds of any loans made pursuant to the Kien Huat Backstop Loan Agreement to pay amounts due and payable under the Bangkok Bank Loan. Obligations under the Kien Huat Backstop Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including among others, nonpayment of principal, interest or fees, and breach of the affirmative covenants.

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Stockholders' Equity

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Stockholders' Equity

Stockholders’ Equity

Common Stock

Restriction on Ownership

Our common stock is transferable only subject to the provisions of Section 303 of the Racing, Pari-Mutuel Wagering and Breeding Law, so long as we hold, directly or indirectly, a license issued by the NYSGC, and may be subject to compliance with the requirements of other laws pertaining to licenses held directly or indirectly by us. The owners of common stock issued by us may be required by regulatory authorities to possess certain qualifications and may be required to dispose of their common stock if the owner does not possess such qualifications.

Restriction on Ability to Pay Dividends

Pursuant to the terms of the Bangkok Bank Loan Agreement, neither Empire nor any of its subsidiaries is permitted to declare or pay any dividends or make other payments to purchase, redeem, retire or otherwise acquire any capital stock of the Company. Such restriction will lapse upon the payment in full of any amounts outstanding under the Bangkok Bank Loan Agreement. Notwithstanding the foregoing, so long as no event of default has occurred, subsidiaries of Empire are permitted to pay dividends to Empire and Empire may pay dividends on the Series B Preferred Stock and for withholding taxes payable in connection with equity compensation programs.

Preferred Stock and Dividends

Series B Preferred Stock

The Company paid dividends, required by the terms of the Series B Preferred Stock, during 2017 and 2018 as follows: on April 2, 2018, July 2, 2018 and October 1, 2018, quarterly payments in the amount of $32,087 were made for the first three quarters of 2018. For the 2017 fiscal year, quarterly payments in the amount of $32,087 were made on April 3, 2017, July 3, 2017, October 2, 2017 and January 2, 2018.

Series F Preferred Stock

On November 5, 2018, the Company filed a certificate of designations for the Series F Preferred Stock with the Secretary of State of the State of Delaware. In addition, on November 6, 2018, the Company entered into the KH 2018 Preferred Stock Commitment Letter pursuant to which Kien Huat agreed to purchase up to $126 million of the Series F Preferred Stock on the terms set forth therein. See Note K for further information concerning the KH 2018 Preferred Stock Commitment Letter.

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Concentration

9 Months Ended

Sep. 30, 2018

Risks and Uncertainties [Abstract]

Concentration

Concentration

As of September 30, 2018, the Company had no receivable which represented more than 10.0% of the total net outstanding accounts receivable.

As of December 31, 2017, the Company had one debtor, Hawthorne OTB, which represented 13.0% of the total net outstanding accounts receivable.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

The Company is a party from time to time to various legal actions that arise in the normal course of business. In the opinion of management, the resolution of these other matters will not have a material and adverse effect on our consolidated financial position, results of operations or cash flows.

Operating Leases

The following table represents the minimum lease payments under the Company's operating leases at September 30, 2018:

Year ending December 31,	Total Payments
	(in thousands)
2018	$	2,559
2019	9,291
2020	8,948
2021	8,489
2022	8,400
2023 to 2056	361,849
Total	$	399,536

The details of operating lease commitments are described below.

Casino Lease

On December 28, 2015, Montreign Operating entered into a lease (the "Casino Lease") with EPT Concord II, LLC ("EPT") for the lease of the parcel on which the Casino was built (the "Casino Parcel"). The Casino Lease has a term that expires on the earlier of (i) March 31, 2086, and (ii) Montreign Operating giving EPT written notice of its election to terminate the Casino Lease (the “Termination Option”) at least 12 months prior to any one of five Option Dates (as defined below). The option dates (each an "Option Date") under the Casino Lease mean each of the 20th, 30th, 40th, 50th and 60th anniversaries of the commencement of the Casino Lease. Upon Montreign Operating's timely notice of exercise of its Termination Option, the Casino Lease will be automatically terminated effective as of the applicable Option Date.

The following table represents the fixed rent payments under the Casino Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1) (2)	$1,875
2019 (2)	7,500
2020 (2)	7,500
2021 (2)	8,000
2022 (2)	8,100
2023 to 2056 (2)	346,524

(1) From March 1, 2017 through August 31, 2018, fixed rent was $1 million per month.

(2) From September 1, 2018 through the remainder of the term of the Casino Lease, fixed rent is $7.5 million per year, subject to an eight percent escalation every five years ("Base Amount").

In addition to the annual fixed rent, beginning September 2018 and through the remainder of the term of the Casino Lease (the “Percentage Rent Period”), Montreign Operating is obligated to pay an annual percentage rent equal to five percent of the Eligible Gaming Revenue (as such term is defined in the Casino Lease) in excess of the Base Amount for the Percentage Rent Period. Additionally, the lease is a net lease, and Montreign Operating has an obligation to pay the rent payable under the Casino Lease and other costs related to Montreign Operating's use and operation of the Casino Parcel, including the special district tax assessments allocated to the Casino Parcel, not to exceed the capped dollar amount applicable to the Casino Parcel.

Golf Course Lease

On December 28, 2015, ERREI entered into a sublease (the “Golf Course Lease”) with Adelaar Developer, LLC (the "Destination Resort Developer") for the lease of the Golf Course Parcel. The terms of the Golf Course Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Golf Course Lease, there is no percentage rent due.

The following table represents the future fixed rent payments under the Golf Course Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1)	$0
2019 (1) (2)	63
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 to 2056 (2) (3)	7,633

(1) From the date the Golf Course Lease commenced (the “Golf Course Lease Commencement Date”) and until the date on which the Golf Course opens for business, which is expected to be in Summer 2019 (the “Golf Course Opening Date”), fixed rent payments will equal $0.

(2) From the Golf Course Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per

year.

(3) From August 2029 through the remainder of the term of the Golf Course Lease, fixed rent will equal $250,000 per year.

The Golf Course Lease is a net lease and ERREI is obligated to pay the rent payable under the Golf Course Lease and other costs related to ERREI's use and operation of the Golf Course Parcel, including the special district tax assessments allocated to the Golf Course Parcel, not to exceed the capped dollar amount applicable to the Golf Course Parcel. This obligation will not be assessed against ERREI prior to 60 months following the Golf Course Lease Commencement Date.

Entertainment Project Lease

On December 28, 2015, ERREII entered into a sublease (the “Entertainment Project Lease”) with the Destination Resort Developer, for the lease of the Entertainment Project Parcel. The terms of the Entertainment Project Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Entertainment Project Lease, there is no percentage rent due.

The following table represents the future fixed rent payments under the Entertainment Project Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1) (2)	$0
2019(2)	150
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 to 2056 (2) (3)	7,675

(1) From the date the Entertainment Project Lease commenced (the “Entertainment Project Lease Commencement Date”) and until the date on which the Entertainment Project opens for business, which is expected to be at the end of December 2018 (the “Entertainment Project Opening Date”), fixed rent payments will equal $0.

(2) From the Entertainment Project Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per year.

(3) From January 2029 through the remainder of the term of the Entertainment Project Lease, fixed rent will equal $250,000 per year.

The Entertainment Project Lease is a net lease and ERREII is obligated to pay the rent payable under the Entertainment Project Lease and other costs related to ERREII's use and operation of the Entertainment Project Parcel, including the special district tax assessments allocated to the Entertainment Project Parcel, not to exceed the capped dollar amount applicable to the Entertainment Project Parcel. This obligation will not be assessed against ERREII prior to 60 months following the Entertainment Project Lease Commencement Date.

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Related Party Transactions

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Kien Huat 2018 Preferred Stock Commitment Letter

On November 6, 2018, the Company entered into the KH 2018 Preferred Stock Commitment Letter, pursuant to which Kien Huat committed to provide equity financing in support of the general corporate and working capital requirements of the Company and its subsidiaries. Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million of Series F Preferred Stock on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and the Certificate of Designations of the Series F Preferred Stock, which the Company filed with the Secretary of State of the State of Delaware on November 5, 2018. Kien Huat committed to purchase the Commitment Amount of the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018, (ii) up to $20 million no earlier than February 15, 2019, (iii) up to $20 million no earlier than May 15, 2019, (iv) up to $15 million no earlier than August 15, 2019, (v) up to $37 million no earlier than November 15, 2019 and (vi) up to $22 million no earlier than March 15, 2020. The Company agreed to use its reasonable efforts to secure third-party financing in an amount equal to the Commitment Amount and the Commitment Amount will be reduced by the amount of any third-party financing raised by the Company. However, any equity financing raised by the Company from any person entering into a commercial agreement relating to online gaming and sports betting at the Casino in an amount up to $29 million will not reduce the Commitment Amount. Kien Huat will be entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat. Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

RWS License Agreement

On March 31, 2017, Montreign Operating entered into a license agreement (the “RWS License Agreement”) with RW Services Pte Ltd (“RWS”). RWS is an affiliate of Tan Sri Lim Kok Thay, who is a beneficiary of, and controls, Kien Huat. Pursuant to the RWS License Agreement, RWS granted Montreign Operating the non-exclusive, non-transferable, revocable and limited right to use certain “Genting” and “Resorts World” trademarks (the “RWS Licensed Marks”) in connection with the development, marketing, sales, management and operation (the “Permitted Uses”) of the Development Projects. The name of the Casino is “Resorts World Catskills,” and, notwithstanding the foregoing, the use of such name is exclusive to Montreign Operating and may be used in connection with online gaming in addition to the Permitted Uses The initial term of the RWS License Agreement will expire on December 31, 2027 and will be extended automatically for additional terms of 12 months each, up to a maximum of 39 additional terms, unless either of the parties provides notice to terminate the RWS License Agreement or upon the mutual written consent of both parties.

Beginning on the date on which the Casino opened to the public, Montreign Operating pays to RWS a fee equivalent to a percentage of Net Revenue (as such term is defined in the RWS License Agreement) generated in each calendar year from (i) all activity at the Casino, (ii) each specific use of the RWS Licensed Marks in the Entertainment Project or Golf Course and (iii) each specific use of the name Resorts World Catskills in connection with online gaming. The percentage of Net Revenue payable as the fee is a low single digit percentage that will increase incrementally between the third year and sixth year of the term of the RWS License Agreement and will remain a low single digit percentage during the entire term of the RWS License Agreement. The Company recorded an expense of approximately $494,000 and $1.1 million for the three-month and nine-month periods ended September 30, 2018, respectively, reflecting the fee payable pursuant to the RWS License Agreement.

Moelis Agreement

On August 7, 2018, the Company entered into an engagement agreement (the "Moelis Engagement Agreement") pursuant to which it engaged Moelis & Company LLC ("Moelis") to act as the Company’s exclusive financial advisor in its review of opportunities in online gaming, sports betting and interactive gaming. Pursuant to the Moelis Engagement Agreement, Moelis has also been engaged as exclusive financial advisor with respect to a strategic financing transaction for the Company, if any. Pursuant to the Moelis Engagement Agreement, we will pay Moelis a retainer fee of $100,000 upon execution. In the event a transaction is consummated, the Moelis Engagement Agreement contemplates additional transaction-based fees would be earned by Moelis.

Gregg Polle, one of the directors of the Company, is a Managing Director of Moelis. Mr. Polle refrained from participating in the discussion of the Moelis Engagement Agreement and abstained from voting on whether to enter into such agreement.

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Subsequent Events

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On October 16, 2018, the Company borrowed $10 million under the Kien Huat Subordinate Loan Agreement. See Note H for a discussion of the terms of the Kien Huat Subordinate Loan Agreement.

On November 5, 2018, the Company filed a certificate of designations for the Series F Preferred Stock with the Secretary of State of the State of Delaware.

On November 6, 2018, the Company entered into the KH 2018 Preferred Stock Commitment Letter pursuant to which Kien Huat committed to provide equity financing in support of the general corporate and working capital requirements of the Company and its subsidiaries. Pursuant to the KH 2018 Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million of Series F Preferred Stock on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and the Certificate of Designations of the Series F Preferred Stock. Kien Huat committed to purchase the Commitment Amount of the Series F Preferred Stock pursuant to the following schedule: (i) up to $12 million no earlier than November 9, 2018, (ii) up to $20 million no earlier than February 15, 2019, (iii) up to $20 million no earlier than May 15, 2019, (iv) up to $15 million no earlier than August 15, 2019, (v) up to $37 million no earlier than November 15, 2019 and (vi) up to $22 million no earlier than March 15, 2020. The Company agreed to use its reasonable efforts to secure third-party financing in an amount equal to the Commitment Amount and the Commitment Amount will be reduced by the amount of any third-party financing raised by the Company. However, any equity financing raised by the Company from any person entering into a commercial agreement relating to online gaming and sports betting at the Casino in an amount up to $29 million will not be used to reduce the Commitment Amount. Kien Huat will be entitled to a funding fee in the amount of 1% of the portion of the Commitment Amount funded by Kien Huat. Unless earlier terminated by mutual agreement, the KH 2018 Preferred Stock Commitment Letter will terminate upon the earlier of (a) the Company's receipt of third-party financing in the Commitment Amount or (b) April 15, 2020.

    On November 7, 2018, the Company borrowed the remaining $2 million under the Bangkok Bank Loan Agreement. See Note G for a discussion of the terms of the Bangkok Bank Loan Agreement.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Reclassifications

Reclassifications

Certain amounts in the accompanying consolidated financial statements for the 2017 period have been reclassified to conform to presentation in the 2018 period, most notably, amortization of debt issuance costs has been included within interest expense on the Condensed Consolidated Statement of Operations.

Cash and cash equivalents

Cash, cash equivalents and restricted cash

Cash and cash equivalents include cash on hand, demand deposits and certificates of deposit with original maturities of three months or less at acquisition. The Company maintains significant cash balances with financial institutions, which are not covered by the Federal Deposit Insurance Corporation. The Company has not incurred any losses in such accounts and believes it is not exposed to any significant credit risk on cash.

Capitalized Interest

Capitalized Interest

Interest costs incurred in connection with the construction of the Casino and the Development Projects have been capitalized in the cost of the projects. Capitalization will cease when the Casino or the other Development projects are substantially complete or if development activity is suspended for an extended period of time.

Revenue recognition and Promotional allowances

Revenue recognition

As described below, the Company adopted the provisions of new accounting standards and updates as codified in the Accounting Standards Codification (ASC) Topic 606 regarding revenue recognition. The Company adopted this guidance as of January 1, 2018 using the modified retrospective approach. Under the modified retrospective approach, amounts presented as of December 31, 2017 and for the three-month and nine-month periods ended September 30, 2017 have not been adjusted to reflect the impact of the ASC Topic 606. This approach does not significantly impact the comparability of the 2018 and 2017 amounts. The promotional allowances recorded in 2017 are no longer presented in 2018 under ASC Topic 606. The adoption of the provisions of ASC 606 resulted in an increase of $54,000 to both “Other accrued liabilities” and “Accumulated deficit” at January 1, 2018. These increases were exclusively the result of remeasuring the loyalty program liability from a deferred cost model to a deferred revenue model. This change only impacts MRMI, since the Casino did not commence operations until February 8, 2018.

The Company’s patron transactions primarily consist of gaming wagers, hotel room and food and beverage purchases. The transaction price for gaming wagers is the difference between gaming wins and losses, not the total amount wagered. The transaction price for hotel room and food and beverage purchases is the net amount collected from the patron for such goods and services. Hotel room and food and beverage goods and services have been determined to be separate, stand-alone transactions and the transaction price for such goods or services is recorded as revenue as they are transferred to the patron over the duration of the patron’s stay at the hotel or when the Company provides the food and beverage services. In the case of a hotel stay involving multiple days, the total transaction price of the stay is recognized on a straight-line basis. The Company collects advanced deposits from hotel patrons for future reservations representing obligations of the Company until the room stay is provided to the patron.

Gaming wagers by patrons who are members of our loyalty programs represent two performance obligations of the Company. Patrons who are members of our loyalty programs earn loyalty points for gaming wagers. Points awarded under our loyalty programs are given to members based on their gaming play and the promise to provide points to members is required to be accounted for as a separate performance obligation. The Company applies a practical expedient by accounting for gaming wagers on a portfolio basis, as such wagers have similar characteristics and the Company reasonably expects the effects on the financial statements of applying the revenue recognition guidance to the portfolio to not differ materially from that which would result if applying the guidance to each individual patron. For purposes of allocating the transaction price when loyalty points are earned, the Company allocates an amount to the loyalty point liability based on the stand-alone selling price ("SSP") of the points earned, which is determined by the value of a point that can be redeemed for a hotel room or food and beverage services. An amount is allocated to the gaming wager performance obligation using the residual approach as the stand-alone price for wagers is highly variable and no set established price exists for such wagers. The allocated revenue for gaming wagers is recognized when the wagers occur because all such wagers settle immediately. The loyalty point liability amount is deferred and recognized as revenue when the patron redeems the points for a hotel room stay or for food and beverage services and such goods or services are provided to the patron. Prior to the adoption of ASC 606, we determined our liability for unredeemed points based on the estimated costs of services or merchandise to be provided and estimated redemption rates.

Additionally, outside of our loyalty programs and at our discretion, we offer our patrons complimentary goods and services, primarily food and beverage and hotel room stays. Such complimentaries are provided in conjunction with revenue-generating gaming activity and are largely provided to entice contemporaneous and future revenue-generating gaming activities. We allocate a portion of the transaction price for gaming wagers we receive from such patrons to the complimentary goods and services provided to such patrons using the residual approach. This allocation is based on the estimated SSP of the underlying goods and services provided, which are determined based on observed SSP we receive for selling such goods and services.

Hospitality Revenues: Food and beverage revenues, and room revenues include (i) revenues generated from transactions with patrons for such goods and/or services, (ii) revenues recognized through the redemption of points from our loyalty programs for such goods and/or services, and (iii) revenues generated as a result of providing such goods and/or services on a complimentary basis in conjunction with gaming activities. Food and beverage revenues and room revenues are recognized when goods are delivered and services are performed. In general, performance obligations associated with these transactions are satisfied at a point-in-time, but may also be satisfied over a period of time, which is typically over the course of a patron’s stay. Advance deposits on rooms are reflected as a performance obligation liability until the goods and/or services are provided to the patron. The Company's performance obligation liabilities are included in “Accrued expenses and other accrued liabilities” in our unaudited condensed consolidated balance sheets.

Racing Revenues: Racing revenues include revenue earned from pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks. Some elements of racing revenue from Off-Track Betting Corporations (“OTBs”) are recognized as collected, due to uncertainty of receipt and timing of payments.

Other Revenues: Other revenues primarily include commissions received on ATM transactions and cash advances, as well as lottery tickets, which are recorded on a net basis as the Company represents the agent in its relationship with the third-party service providers. Other revenues also include the sale of retail goods, which are recognized at the time the goods are delivered to the customer.

Subsequent to the adoption of ASC 606, complimentary food and beverage revenues and room revenues are included in food and beverage revenues, room revenues, and other revenues, with a corresponding decrease to gaming revenues, in the unaudited condensed consolidated statements of operations. See “Recent Accounting Pronouncements” for further information regarding the adoption of ASC 606.

Accounts receivable

Accounts receivable

Accounts receivable, net of allowances, are stated at the amount the Company expects to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectibility of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and the Company’s judgment of collectibility. The Company extends credit to certain gaming patrons upon completion of a credit application process. Gaming patrons are expected to repay gaming markers within a predetermined period of time, the Company also settles wagers for other racetracks and is exposed to credit risk. These amounts are included in accounts receivable. Account balances are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote.

Earnings (loss) per common share

Common stock - loss per share

The Company computes basic loss per share by dividing net loss applicable to common shares by the weighted-average common shares outstanding for the period. Diluted loss per share reflects the potential dilution of earnings that could occur if securities or contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three-month and nine-month periods ended September 30, 2018 and and 2017 were the same.

Fair value

Fair value

The Company follows the provisions of ASC 820, “Fair Value Measurement,” issued by the FASB for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The Company chose not to elect the fair value option as prescribed by the FASB for its financial assets and liabilities that had not been previously carried at fair value. The Company’s financial instruments are primarily comprised of current assets, restricted cash and investments, Interest Rate Cap, current liabilities and long-term debt. Current assets, investments and current liabilities approximate fair value due to their short-term nature.

In determining fair value, the Company uses quoted prices and observable inputs.  Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company.

The fair value hierarchy of observable inputs used by the Company is broken down into three levels based on the source of inputs as follows:

- Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities.

- Level 2 - Valuations based on inputs that are observable inputs and quoted prices in active markets for similar assets and liabilities.

- Level 3 - Valuations based on inputs that are unobservable and models that are significant to the overall fair value measurement. 

Stock-based compensation

Stock-based compensation

The cost of all share-based awards to employees, including grants of employee stock options and restricted stock, is recognized in the financial statements based on the fair value of the awards at grant date. The fair value of stock option awards is determined using the Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the market price of Empire’s common stock on the date of grant. The fair value of share-based awards is recognized as stock-based compensation expense on a straight-line basis over the requisite service period from the date of grant.

Income taxes

Income taxes

The Company applies the asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates for the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

Intangible Assets

Intangible Assets

In accordance with ASC 350, Intangibles - Goodwill and Other, the Company amortizes intangible assets over their estimated useful lives unless the Company determines their lives to be indefinite.

Recent accounting pronouncements

Recent accounting pronouncements

In February 2016, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2016-02, "Leases (Topic 842)" ("ASU 2016-02"), which provides guidance for accounting for leases. Under ASU 2016-02, the Company will be required to recognize the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard must be adopted using a modified retrospective approach and provides for certain practical expedients. Early adoption is permitted. The Company intends to adopt the standard on January 1, 2019 and apply the package of practical expedients available to it upon adoption. The Company continues to evaluate the effect that ASU 2016-02 will have on consolidated financial statements, but we expect that ASU 2016-02 will have a material effect on the condensed consolidated balance sheets as a result of the recognition of certain leases as right-of-use assets and lease liabilities.

In November 2016, FASB issued ASU 2016-18, "Restricted Cash" Topic 230, which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents and amounts generally described as restricted cash and restricted cash equivalents. The Company adopted this standard on January 1, 2018 using the retrospective transition method. The impact of the new standard is that the Company's condensed consolidated statements of cash flows now present the change in a combined amount for both restricted and unrestricted cash and cash equivalents for all periods presented.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Disaggregation of Revenue

Complimentary food and beverage revenues, and complimentary room revenues for the three-month and nine-month periods ended September 30, 2018 and 2017, respectively, were as follows:

	Three Months Ended				Nine Months Ended
	09/30/2018		09/30/2017		09/30/2018		09/30/2017
	(in thousands)				(in thousands)
Complimentary food and beverage revenues	$	3,178	$	212	$	6,350	$	487
Complimentary room revenues	1,378		—		2,328		—

Schedule of Cash and Cash Equivalents

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the statement of cash flows:

	September 30, 2018		December 31, 2017		September 30, 2017		December 31, 2016
	(in thousands)
Cash and cash equivalents	$	18,390	$	10,380	$	6,213	$	11,012
Restricted cash	502		693		920		1,078
Restricted cash for Development Projects	64,178		41,982		45,212		26,384
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	83,070	$	53,055	$	52,345	$	38,474

Summary of the approximate number of common stock equivalents outstanding

The following table shows the approximate number of common stock equivalents outstanding at September 30, 2018 and 2017 that could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share for the three-month and nine-month periods ended September 30, 2018 and 2017, because their inclusion would have been anti-dilutive to the loss per common share:

	Outstanding at
	September 30, 2018	September 30, 2017
Unvested Restricted stock	37,000	149,000
Warrants	193,000	133,000
Restricted stock units ("RSUs")	154,000	55,000
Option Matching Rights	—	3,000
Options	11,000	15,000
Total	395,000	355,000

Fair Value, Assets Measured on Recurring Basis

The following table presents the carrying amount, fair values and classification level within the fair value hierarchy of financial instruments measured or disclosed at fair value on a recurring basis:

	September 30, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Level of Fair Value Hierarchy
Assets:	(in thousands)
Cash and cash equivalents	$	18,390	$	18,390	$	10,380	$	10,380	Level 1
Restricted cash	502		502		693		693		Level 1
Interest Rate Cap	287		287		251		251		Level 2
Restricted cash and investments for Development Projects:
Cash and cash equivalents	64,178		64,178		41,982		41,982		Level 1
Short-term investments	—		—		94,449		94,209		Level 2
Liabilities:
Term B Loan, net of discount	441,635		447,463		443,161		449,749		Level 2
Term A Loan	66,500		66,500		—		—		Level 2
Bangkok Bank Loan	18,000		18,000		16,000		16,000		Level 3
Revolving Credit Facility	15,000		15,000		—		—		Level 2
Related party loan, net of unamortized issuance costs	20,064		20,064		—		—		Level 3
Equipment loans	24,057		24,057		31,095		31,095		Level 3

Fair Value, Liabilities Measured on Recurring Basis

he following table presents the carrying amount, fair values and classification level within the fair value hierarchy of financial instruments measured or disclosed at fair value on a recurring basis:

	September 30, 2018				December 31, 2017
	Carrying Amount		Fair Value		Carrying Amount		Fair Value		Level of Fair Value Hierarchy
Assets:	(in thousands)
Cash and cash equivalents	$	18,390	$	18,390	$	10,380	$	10,380	Level 1
Restricted cash	502		502		693		693		Level 1
Interest Rate Cap	287		287		251		251		Level 2
Restricted cash and investments for Development Projects:
Cash and cash equivalents	64,178		64,178		41,982		41,982		Level 1
Short-term investments	—		—		94,449		94,209		Level 2
Liabilities:
Term B Loan, net of discount	441,635		447,463		443,161		449,749		Level 2
Term A Loan	66,500		66,500		—		—		Level 2
Bangkok Bank Loan	18,000		18,000		16,000		16,000		Level 3
Revolving Credit Facility	15,000		15,000		—		—		Level 2
Related party loan, net of unamortized issuance costs	20,064		20,064		—		—		Level 3
Equipment loans	24,057		24,057		31,095		31,095		Level 3

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Prepaid Expenses and Other Assets (Tables)

9 Months Ended

Sep. 30, 2018

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Schedule of Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets, as presented on the balance sheet, are comprised of the following at September 30, 2018 and December 31, 2017:

	9/30/2018		12/31/2017
	(in thousands)
Empire Zones real estate tax credit	$	269	$	814
Prepaid real estate taxes	1,082		443
Prepaid insurance	312		327
Prepaid advertising	160		—
Prepaid gaming expenses	1,039		74
Prepaid maintenance contracts	931		476
Development escrow and refundable security deposit	987		780
Prepaid other	839		462
Total prepaid expenses and other current assets	$	5,619	$	3,376

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Property and Equipment (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment at September 30, 2018 and December 31, 2017 consists of the following:

	9/30/2018			12/31/2017
	(in thousands)
Land	$	770		$	770
Land improvements	2,110			1,759
Buildings	579,203			4,727
Building improvements	76,740			29,874
Furniture, fixtures and equipment	35,483			5,551
Construction in Progress	1,651			77
	695,957			42,758
Less: Accumulated depreciation	(36,220		)	(15,895		)
	$	659,737		$	26,863

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Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Sep. 30, 2018

Payables and Accruals [Abstract]

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities, as presented on the condensed consolidated balance sheet, are comprised of the following at September 30, 2018 and December 31, 2017:

	9/30/2018		12/31/2017
	(in thousands)
Liability for horseracing purses	$	1,164	$	886
Accrued payroll	5,494		1,715
Deferred revenue - loyalty points	2,065		271
Liability to the NYSGC	2,836		1,507
Liability for local progressive jackpot	2,452		1,110
Accrued premium game leases	880		—
Accrued professional fees	2,136		744
Accrued interest expense	9,279		14
Accrued utilities	792		81
Accrued other	6,843		992
Total accrued expenses and other current liabilities	$	33,941	$	7,320

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Schedule of Long-Term Debt Instruments

Long-term debt, other than Related Party debt, consisted of the following at September 30, 2018 and December 31, 2017:

	9/30/2018			12/31/2017
	(in thousands)
Term B Loan (stated amount less unamortized discount)	$	441,635		$	443,161
Term A Loan	66,500			—
Bangkok Bank Loan	18,000			16,000
Revolving Credit Facility	15,000			—
Equipment Loans	24,057			31,095
Total long-term debt	565,192			490,256
Debt issuance costs	(18,429		)	(20,520		)
Total long-term debt, net	546,763			469,736
Less: Current portion of long-term debt	(28,118		)	(14,588		)
Long term-debt, net of current portion	$	518,645		$	455,148

Contractual Obligation, Fiscal Year Maturity Schedule

The following table lists the annual principal repayments due for the Company's long term debt as of September 30, 2018:

Year ending December 31,	Totals
	(in thousands)
2018	$7,711
2019	44,841
2020	20,690
2021	15,815
2022	30,000
2023	452,250
Totals	$571,307

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

The following table represents the fixed rent payments under the Casino Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1) (2)	$1,875
2019 (2)	7,500
2020 (2)	7,500
2021 (2)	8,000
2022 (2)	8,100
2023 to 2056 (2)	346,524

(1) From March 1, 2017 through August 31, 2018, fixed rent was $1 million per month.

(2) From September 1, 2018 through the remainder of the term of the Casino Lease, fixed rent is $7.5 million per year, subject to an eight percent escalation every five years ("Base Amount").

Under the Golf Course Lease, there is no percentage rent due.

The following table represents the future fixed rent payments under the Golf Course Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1)	$0
2019 (1) (2)	63
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 to 2056 (2) (3)	7,633

(1) From the date the Golf Course Lease commenced (the “Golf Course Lease Commencement Date”) and until the date on which the Golf Course opens for business, which is expected to be in Summer 2019 (the “Golf Course Opening Date”), fixed rent payments will equal $0.

(2) From the Golf Course Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per

year.

(3) From August 2029 through the remainder of the term of the Golf Course Lease, fixed rent will equal $250,000 per year.

The following table represents the minimum lease payments under the Company's operating leases at September 30, 2018:

Year ending December 31,	Total Payments
	(in thousands)
2018	$	2,559
2019	9,291
2020	8,948
2021	8,489
2022	8,400
2023 to 2056	361,849
Total	$	399,536

The following table represents the future fixed rent payments under the Entertainment Project Lease at September 30, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2018 (1) (2)	$0
2019(2)	150
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 to 2056 (2) (3)	7,675

(1) From the date the Entertainment Project Lease commenced (the “Entertainment Project Lease Commencement Date”) and until the date on which the Entertainment Project opens for business, which is expected to be at the end of December 2018 (the “Entertainment Project Opening Date”), fixed rent payments will equal $0.

(2) From the Entertainment Project Opening Date and continuing for the 10 years thereafter, fixed rent will equal $150,000 per year.

(3) From January 2029 through the remainder of the term of the Entertainment Project Lease, fixed rent will equal $250,000 per year.

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Organization and Nature of Business (Details) - USD ($)		9 Months Ended
	Nov. 06, 2018	Sep. 30, 2018	Sep. 30, 2017
Debt Instrument [Line Items]
Proceeds from related party equity contribution		$ 0	$ 32,000,000
Largest stockholder
Debt Instrument [Line Items]
Current financing available		$ 333,000,000
Subsequent Event | KH 2018 Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member]
Debt Instrument [Line Items]
Share Purchase Agreement, Maximum Purchase Amount	$ 126,000,000
Preferred Stock, Par or Stated Value Per Share	$ 0.01
Proceeds from related party equity contribution	$ 29,000,000
Funding Fee, Percent	1.00%
Subsequent Event | Share Purchase Program Schedule, Period One [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member]
Debt Instrument [Line Items]
Share Purchase Agreement, Maximum Purchase Amount	$ 12,000,000
Subsequent Event | Share Purchase Program Schedule, Period Two [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member]
Debt Instrument [Line Items]
Share Purchase Agreement, Maximum Purchase Amount	20,000,000
Subsequent Event | Share Purchase Program Schedule, Period Three [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member]
Debt Instrument [Line Items]
Share Purchase Agreement, Maximum Purchase Amount	20,000,000
Subsequent Event | Share Purchase Program Schedule, Period Four [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member]
Debt Instrument [Line Items]
Share Purchase Agreement, Maximum Purchase Amount	15,000,000
Subsequent Event | Share Purchase Program Schedule, Period Five [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member]
Debt Instrument [Line Items]
Share Purchase Agreement, Maximum Purchase Amount	37,000,000
Subsequent Event | Share Purchase Program Schedule, Period Six [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member]
Debt Instrument [Line Items]
Share Purchase Agreement, Maximum Purchase Amount	$ 22,000,000

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended
	Feb. 25, 2016	Feb. 28, 2017	Sep. 30, 2018	Mar. 31, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017	Dec. 31, 2016
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash for Development Projects						$ 45,212	$ 41,982	$ 26,384
Restricted cash and investments for Development Projects			$ 64,178		$ 64,178		136,431
Restricted Cash and Investments							136,400
Customer Loyalty Program Liability, Current			2,100		2,100		300
Accrued rent			7,500		7,500		8,300
Gaming Facility License Term						10 years
Restricted cash and investments for Development Projects							42,000
Allowance for doubtful accounts			154		154		$ 171
Interest charges capitalized			$ 300	$ 8,200	$ 11,700	$ 17,600
Common stock, shares issued (shares)			32,717,000		32,717,000		32,560,000
Total unrecognized compensation			$ 2,300		$ 2,300
Vesting period for unrecognized compensation cost to be recognized (in years)					3 years
Accumulated other comprehensive loss			89		$ 89		$ 315
Short-term Investments							94,500
Retained Earnings (Accumulated Deficit)			393,105		393,105		301,032
Montreign [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Gaming Facility License Fee	$ 51,000
Term Loan Facility, Term B Loan [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash for Development Projects			64,200		64,200
Payments of Debt Restructuring Costs		$ 675
Other Assets, Fair Value Disclosure			287		287		251
Commercial Paper [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Short-term Investments							59,400
US Treasury Notes Securities [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Short-term Investments							$ 35,100
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Other Accrued Liabilities			54		54
Retained Earnings (Accumulated Deficit)			$ 54		$ 54
Kien Huat Realty III Limited Investment Agreement [Member] | Kien Huat Realty III Limited [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Common stock, shares issued (shares)			200,000		200,000

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Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Accounting Policies [Abstract]
Complimentary food and beverage revenues	$ 3,178	$ 212	$ 6,350	$ 487
Complimentary room revenues	$ 1,378	$ 0	$ 2,328	$ 0

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Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Cash and Cash Equivalents, at Carrying Value	$ 18,390	$ 10,380	$ 6,213	$ 11,012
Restricted cash	502	693	920	1,078
Restricted cash for Development Projects		41,982	45,212	26,384
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents	$ 83,070	$ 53,055	$ 52,345	$ 38,474

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Summary of Significant Accounting Policies - Stock option equivalents (Details) - shares shares in Thousands	Sep. 30, 2018	Sep. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	395	355
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	37	149
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	193	133
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	154	55
Option Matching Rights [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	0	3
Restricted stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	11	15

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Summary of Significant Accounting Policies - Fair Value of Financial Instruments Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, at Carrying Value	$ 18,390	$ 10,380	$ 6,213	$ 11,012
Restricted cash	502	693	920	1,078
Restricted cash for Development Projects		41,982	$ 45,212	$ 26,384
Restricted cash for Development Projects		42,000
Short-term Investments		94,500
Long-term Debt	546,763	469,736
Long-term loan, related party, net of debt issuance costs	20,064	0
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and Cash Equivalents, at Carrying Value		10,380
Cash and Cash Equivalents, Fair Value Disclosure	18,390	10,380
Restricted cash	502
Restricted cash		693
Restricted Cash, Current, Fair Value Disclosure	502	693
Restricted cash for Development Projects	64,178
Restricted cash for Development Projects		41,982
Restricted Cash, Noncurrent, Fair Value Disclosure	64,178	41,982
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term Investments	0	94,449
Short-term Investments, Fair Value Disclosure	0	94,209
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Notes Payable, Fair Value Disclosure	20,064	0
Long-term loan, related party, net of debt issuance costs	20,064
Notes Payable, Related Parties		0
Term Loan Facility, Term B Loan [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Restricted cash for Development Projects	64,200
Bangkok Bank Loan [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Lines of Credit, Fair Value Disclosure	18,000	16,000
Long-term Line of Credit	18,000	16,000
Fifth Third Revolver [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Lines of Credit, Fair Value Disclosure	15	0
Long-term Line of Credit	15,000	0
Equipment Loans [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Debt	24,100
Equipment Loans [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Debt	24,057	31,095
Lines of Credit, Fair Value Disclosure	24,057	31,095
Interest Rate Cap [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Asset	287	251
Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Debt	441,635	443,161
Notes Payable, Fair Value Disclosure	447,463	449,749
Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member] | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term Debt	66,500	0
Notes Payable, Fair Value Disclosure	$ 66,500	0
Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term Investments		59,400
US Treasury Notes Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term Investments		$ 35,100

XML

Prepaid Expenses and Other Assets - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Sep. 30, 2018
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Number of years of participation (in years)	10 years
Refund reduction percent	20.00%
Refund percent	20.00%
Proceeds from Income Tax Refunds	$ 269
Prepaid Gaming Expenses, Supplies		$ 863

XML

Prepaid Expenses and Other Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Empire Zones real estate tax credit	$ 269	$ 814
Prepaid real estate taxes	1,082	443
Prepaid insurance	312	327
Prepaid advertising	160	0
Prepaid gaming expenses	1,039	74
Prepaid maintenance contracts	931	476
Development escrow and refundable security deposit	987	780
Prepaid other	839	462
Total prepaid expenses and other current assets	$ 5,619	$ 3,376

XML

Property and Equipment (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 08, 2018	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Property, Plant and Equipment [Line Items]
Property and equipment, gross		$ 695,957		$ 695,957		$ 42,758
Less: Accumulated depreciation		(36,220)		(36,220)		(15,895)
Property and equipment, net		659,737		659,737		26,863
Project Development Costs Incurred Transferred to Property and Equipment	$ 653,200			630,100
Capitalized project development costs		19,500		19,500		566,800
Depreciation		7,864	$ 390	20,325	$ 1,115
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		770		770		770
Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		2,110		2,110		1,759
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		579,203		579,203		4,727
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		76,740		76,740		29,874
Furniture, fixtures and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		35,483		35,483		5,551
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		$ 1,651		$ 1,651		$ 77

XML

Development Projects Costs (Details) - USD ($) $ in Millions		9 Months Ended
	Feb. 08, 2018	Sep. 30, 2018	Dec. 31, 2017	Dec. 28, 2017	Sep. 30, 2017	Feb. 29, 2016
Development Costs [Line Items]
Capitalized project development costs		$ 19.5	$ 566.8
Project Development Costs Incurred Transferred to Property and Equipment	$ 653.2	630.1
Deposit assets					$ 20.0	$ 15.0
Deposit Asset, Percent of Minimum Capital Investment Expended for Deposit Return				85.00%
Construction Manager Costs [Member]
Development Costs [Line Items]
Capitalized project development costs		17.4	560.2
Architectural, Engineering, Construction Manager, and Subcontractor [Member]
Development Costs [Line Items]
Capitalized project development costs		$ 2.1	$ 6.6

XML

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Project Development Costs	$ 27,945	$ 71,712
Liability for horseracing purses	1,164	886
Accrued payroll	5,494	1,715
Deferred revenue - loyalty points	2,065	271
Liability to the NYSGC	2,836	1,507
Liability for local progressive jackpot	2,452	1,110
Accrued premium game leases	880	0
Accrued professional fees	2,136	744
Accrued interest expense	9,279	14
Accrued utilities	792	81
Accrued other	6,843	992
Total accrued expenses and other current liabilities	33,941	$ 7,320
Increase in deferred revenues	$ 1,800

XML

Long-Term Debt - Schedule of Long-Term Debt Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt, gross	$ 565,192	$ 490,256
Debt issuance costs	(18,429)	(20,520)
Total long-term debt, net	546,763	469,736
Less: Current portion of long-term debt	(28,118)	(14,588)
Long-term debt, net of current portion	518,645	455,148
Term Loan Facility, Term B Loan [Member]
Debt Instrument [Line Items]
Long-term debt, gross	441,635	443,161
Term Loan Facility, Term A Loan [Member]
Debt Instrument [Line Items]
Long-term debt, gross	66,500	0
Bangkok Bank Loan [Member]
Debt Instrument [Line Items]
Long-term debt, gross	18,000	16,000
Montreign Operating Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term debt, gross	15,000	0
FF&E Financing [Member]
Debt Instrument [Line Items]
Long-term debt, gross	$ 24,057	$ 31,095

XML

Long-Term Debt - Term Loan Facility (Details) - USD ($)		3 Months Ended		9 Months Ended	18 Months Ended
	Jan. 24, 2017	Dec. 31, 2018	Sep. 30, 2018	Sep. 30, 2018	Jul. 24, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term Debt			$ 546,763,000	$ 546,763,000		$ 469,736,000
Debt Instrument, Covenant, Tax Sharing Agreement, Distributions Percentage of Net Revenues, Maximum	1.00%
Debt Instrument, Covenant, Repurchase of Capital Stock, Maximum	$ 1,000,000
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member]
Debt Instrument [Line Items]
Long-term Debt			$ 66,500,000	$ 66,500,000
Stated percentage			7.35%	7.35%
Commitment fee percent, after closing date					5.00%
Debt Instrument, Repayment Percent of Principal			2.50%	2.50%
Debt Instrument, Periodic Payment, Principal, First Year				$ 1,800,000
Debt Instrument, Periodic Payment, Principal, Second Year and Thereafter				2,600,000
Repayments of Debt			$ 3,500,000
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	5.00%
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	4.00%
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member]
Debt Instrument [Line Items]
Long-term Debt			$ 441,600,000	$ 441,600,000
Stated percentage			10.59%	10.59%
Debt Instrument, Repayment Percent of Principal			1.00%	1.00%
Repayments of Debt			$ 2,300,000
Debt Instrument, Periodic Payment, Principal				$ 1,100,000
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	8.25%
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum
Debt Instrument [Line Items]
Stated percentage	1.00%
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	7.25%
Scenario, Forecast [Member]
Debt Instrument [Line Items]
Minimum Expected Occupancy Rate, Percentage		95.00%

XML

Long-Term Debt - Revolving Credit Facility (Details) - Montreign Operating [Member]	9 Months Ended
	Sep. 30, 2018 USD ($)
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Long-term Line of Credit	$ 15,000,000
Maximum borrowing capacity	$ 15,000,000
Stated percentage	7.34%
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	5.00%
Revolving Credit Facility [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate	4.00%
Letter of Credit [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity	$ 10,000,000

XML

Long-Term Debt - Bankok Bank Loan (Details) - Bangkok Bank Loan [Member] - USD ($) $ in Millions	Nov. 07, 2018	Dec. 28, 2017	Sep. 30, 2018
Debt Instrument [Line Items]
Stated percentage			8.492%
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage		1.50%
London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		6.25%
Base Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate		5.25%
Line of Credit [Member]
Debt Instrument [Line Items]
Long-term Line of Credit			$ 18
Availability of credit			$ 2
Subsequent Event | Line of Credit [Member]
Debt Instrument [Line Items]
Amount borrowed under line of credit	$ 2

XML

Long-Term Debt - Equipment Loans (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term Debt	$ 546,763	$ 469,736
Cost of funds rate	10.00%
Equipment Loans [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 31,100
Long-term Debt	$ 24,100
Stated percentage	0.00%
Long-term Debt, Maturities, Weighted Average of Monthly Repayments	$ 1,000
Equipment Loans [Member] | Minimum
Debt Instrument [Line Items]
Debt instrument, term (in months)	6 months
Stated percentage	0.00%
Equipment Loans [Member] | Maximum
Debt Instrument [Line Items]
Debt instrument, term (in months)	36 months
Stated percentage	800.00%

XML

Long-Term Debt - Schedule of Annual Principal Repayments (Details) $ in Thousands	Sep. 30, 2018 USD ($)
Debt Instrument [Line Items]
2018	$ 7,711
2019	44,841
2020	20,690
2021	15,815
2022	30,000
2023	452,250
Totals	$ 571,307

XML

Long-Term Loans, Related Party (Details) - USD ($)	3 Months Ended
	Sep. 30, 2018	Jun. 25, 2018
Kien Huat Backstop Loan [Member]
Debt Instrument [Line Items]
Principal amount of promissory note	$ 20,000,000
Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 30,000,000
Extension period (in years)	1 year
Long-term Line of Credit	$ 20,000,000
Commitment fee	$ 300,000
Commitment fee (as a percentage)	1.00%
Stated percentage	12.00%
Advanced no earlier than September 17, 2018 | Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity		$ 10,000,000

XML

Stockholders' Equity (Details) - USD ($)	Oct. 01, 2018	Jul. 02, 2018	Apr. 02, 2018	Jan. 02, 2018	Oct. 02, 2017	Jul. 03, 2017	Apr. 03, 2017	Nov. 06, 2018
Series B
Class of Stock [Line Items]
Preferred stock dividends		$ 32,087	$ 32,087	$ 32,087	$ 32,087	$ 32,087	$ 32,087
Series B | Subsequent Event
Class of Stock [Line Items]
Preferred stock dividends	$ 32,087
Kien Huat Realty III Limited [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Series F Preferred Stock [Member] | Subsequent Event
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount								$ 126,000,000

XML

Concentration (Details) - Accounts Receivable - Credit Concentration Risk - debtor	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Concentration Risk [Line Items]
Number of debtors		1
Hawthorne OTB
Concentration Risk [Line Items]
Concentration of risk	10.00%	13.00%

XML

Related Party Transactions (Details) - USD ($)			3 Months Ended	9 Months Ended
	Nov. 07, 2018	Nov. 06, 2018	Sep. 30, 2018	Sep. 30, 2018	Sep. 30, 2017
Related Party Transaction
Proceeds from related party equity contribution				$ 0	$ 32,000,000
RW Services Pte Ltd [Member] | RWS License Agreement [Member]
Related Party Transaction
Related Party Transaction, Expenses from Transactions with Related Party			$ 494,000	$ 1,100,000
Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount		$ 126,000,000
Proceeds from related party equity contribution		$ 29,000,000
Funding Fee, Percent		1.00%
Moelis & Company LLC [Member] | Moelis Engagement Agreement [Member] | Subsequent Event
Related Party Transaction
Retainer fee	$ 100,000
Share Purchase Program Schedule, Period One [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount		$ 12,000,000
Share Purchase Program Schedule, Period Two [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount		20,000,000
Share Purchase Program Schedule, Period Three [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount		20,000,000
Share Purchase Program Schedule, Period Four [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount		15,000,000
Share Purchase Program Schedule, Period Five [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount		37,000,000
Share Purchase Program Schedule, Period Six [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount		$ 22,000,000

XML

Commitments and Contingencies - Narrative (Details) - USD ($)		9 Months Ended
	Dec. 28, 2015	Sep. 30, 2017
Casino Lease [Member]
Loss Contingencies [Line Items]
Operating Leases, Annual Rent, Percent of Gaming Revenue in Excess of $150,000,000		5.00%
Golf Course Lease [Member]
Loss Contingencies [Line Items]
Operating Leases, Annual Fixed Rent, Before Opening		$ 0
Operating Leases, Annual Fixed Rent, First Ten Years		150,000
Operating Leases, Annual Fixed Rent, After Ten Years		$ 250,000
EPT Concord II, LLC [Member] | Casino Lease [Member]
Loss Contingencies [Line Items]
Lessee Leasing Arrangements, Operating Leases, Notice To Terminate Lease	12 months

XML

Commitments and Contingencies - Lease Payments (Details) - USD ($)	9 Months Ended	18 Months Ended	460 Months Ended
	Sep. 30, 2017	Aug. 31, 2018	Dec. 31, 2056	Sep. 30, 2018
Loss Contingencies [Line Items]
2018				$ 2,559,000
2019				9,291,000
2020				8,948,000
2021				8,489,000
2022				8,400,000
2023 to 2056				361,849,000
Total				399,536,000
Casino Lease [Member]
Loss Contingencies [Line Items]
2018				1,875,000
2019				7,500,000
2020				7,500,000
2021				8,000,000
2022				8,100,000
2023 to 2056				346,524,000
Operating Leases, Annual Fixed Rent		$ 1,000,000
Golf Course Lease [Member]
Loss Contingencies [Line Items]
2018				0
2019				63,000
2020				150,000
2021				150,000
2022				150,000
2023 to 2056				7,633,000
Operating Leases, Annual Fixed Rent, First Ten Years	$ 150,000
Operating Leases, Annual Fixed Rent, After Ten Years	250,000
Operating Leases, Annual Fixed Rent, Before Opening	0
Entertainment Village Lease [Member]
Loss Contingencies [Line Items]
2018				0
2019				150,000
2020				150,000
2021				150,000
2022				150,000
2023 to 2056				$ 7,675,000
Operating Leases, Annual Fixed Rent, First Ten Years	150,000
Operating Leases, Annual Fixed Rent, After Ten Years	250,000
Operating Leases, Annual Fixed Rent, Before Opening	$ 0
Scenario, Forecast [Member] | Casino Lease [Member]
Loss Contingencies [Line Items]
Operating Leases, Annual Fixed Rent			$ 7,500,000
Operating Leases, Annual Fixed Rent, Escalation Percent Increase Every Five Years			8.00%

XML

Subsequent Events (Details) - USD ($)				9 Months Ended
	Nov. 07, 2018	Nov. 06, 2018	Oct. 16, 2018	Sep. 30, 2018	Sep. 30, 2017
Subsequent Event [Line Items]
Proceeds from related party equity contribution				$ 0	$ 32,000,000
Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member] | Subsequent Event
Subsequent Event [Line Items]
Proceeds from related party long-term loan			$ 10,000,000
Bangkok Bank Loan [Member] | Line of Credit [Member] | Subsequent Event
Subsequent Event [Line Items]
Amount borrowed under line of credit	$ 2,000,000
Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Subsequent Event [Line Items]
Share Purchase Agreement, Maximum Purchase Amount		$ 126,000,000
Proceeds from related party equity contribution		$ 29,000,000
Funding Fee, Percent		1.00%
Share Purchase Program Schedule, Period One [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Subsequent Event [Line Items]
Share Purchase Agreement, Maximum Purchase Amount		$ 12,000,000
Share Purchase Program Schedule, Period Two [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Subsequent Event [Line Items]
Share Purchase Agreement, Maximum Purchase Amount		20,000,000
Share Purchase Program Schedule, Period Three [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Subsequent Event [Line Items]
Share Purchase Agreement, Maximum Purchase Amount		20,000,000
Share Purchase Program Schedule, Period Four [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Subsequent Event [Line Items]
Share Purchase Agreement, Maximum Purchase Amount		15,000,000
Share Purchase Program Schedule, Period Five [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Subsequent Event [Line Items]
Share Purchase Agreement, Maximum Purchase Amount		37,000,000
Share Purchase Program Schedule, Period Six [Member] | Kien Huat Realty III Limited [Member] | Series F Preferred Stock [Member] | KH 2018 Preferred Stock Commitment Letter [Member] | Subsequent Event
Subsequent Event [Line Items]
Share Purchase Agreement, Maximum Purchase Amount		$ 22,000,000