10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________ 

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the fiscal year ended December 31, 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

Securities registered under Section 12(b) of the Act:

Title of each class	Name of each exchange on which registered
Common Stock, $.01 par value per share	NASDAQ Global Market

Securities registered under Section 12(g) of the Act:

None

(Title of class)

_______________________________________ 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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 and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

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	¨

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

The aggregate market value of the issuer’s common equity held by non-affiliates, as of June 29, 2018, was $71,753,062 based on the closing price of the registrant’s common stock on the NASDAQ Global Market.

As of March 14, 2019, there were 34,423,250 shares of the registrant’s common stock outstanding.

_______________________________________ 

DOCUMENTS INCORPORATED BY REFERENCE

None.

INDEX

PART I		1
ITEM 1.	BUSINESS	1
ITEM 1A.	RISK FACTORS	13
ITEM 1B.	UNRESOLVED STAFF COMMENTS	27
ITEM 2.	PROPERTIES	27
ITEM 3.	LEGAL PROCEEDINGS	29
ITEM 4.	MINE SAFETY DISCLOSURES	29
PART II		30
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	30
ITEM 6.	SELECTED FINANCIAL DATA	32
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	48
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	49
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	95
ITEM 9A.	CONTROLS AND PROCEDURES	96
ITEM 9B.	OTHER INFORMATION	98
PART III		99
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	99
ITEM 11.	EXECUTIVE COMPENSATION	99
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	99
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	99
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	99
PART IV		99
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	99
SIGNATURES		107

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PART I

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements about management’s current expectations. Examples of such forward-looking statements include discussions of the expected results of various strategies. Although we believe that our expectations are based upon reasonable assumptions, there can be no assurance that our financial goals will be realized. Our forward-looking statements concern matters that involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from the future results, performance or achievements described or implied by such forward-looking statements. Numerous factors may affect our actual results and may cause results to differ materially from those expressed in the forward-looking statements made by us or on our behalf. Any statements that are not statements of historical fact may be forward-looking statements. Among others, we have used the words, “believes,” “anticipates,” “plans,” “estimates,” and “expects” to identify forward-looking statements. Such statements may be considered forward looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Section 27A of the Securities Act of 1933, as amended (the “Securities Act”). Factors that could cause actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the risk factors set forth in Item 1A of this Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this filing. We assume no obligation to update the forward-looking statements to reflect actual results or changes in the factors affecting such forward-looking statements.

Item 1. 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 is located at the approximately1,700-acre site of a four-season destination resort ("Destination Resort") in Sullivan County, New York, approximately 90 miles from New York City. The Destination Resort in which Resorts World Catskills is located also includes a 101-room lifestyle hotel ("The Alder") adjacent to the Casino. The Alder is owned and operated by Empire Resorts Real Estate II, LLC ("ERREII"), a wholly-owned subsidiary of Montreign Operating. Empire Resorts I, LLC ("ERREI"), which is a wholly-owned subsidiary of Montreign Operating, is developing a golf course (the "Golf Course Project" and, together with the Casino and The Alder, the "Development Projects") at the Destination Resort.

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. The Company recently announced that VGM operations and food and beverage service at Monticello Casino and Raceway will cease on or about April 23, 2019. 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.

Gaming and Resort Operations

Resorts World Catskills

Resorts World Catskills is located in the Town of Thompson, New York which is located in the Catskill region of New York State. The Catskill region has historically been a resort area. The Casino includes an 18-story hotel, casino and entertainment complex featuring more than 2,150 slot machines and 150 live table games, a poker room and private gaming salons. The Casino also offers varied bar and restaurant experiences, which includes an Italian steakhouse created by celebrity chef Scott Conant, and year-round live entertainment at the 2,500-seat RW Epicenter, casino bars and lounges. The 332-room all-suite hotel includes 27 premium accommodations consisting of garden suites, penthouse suites and two-story villas, as well as the Crystal Life Spa, two indoor pools, and two fitness centers. The Destination Resort has a dedicated interchange off New York State Route 17 at Exit 106 that delivers guests directly into the Destination Resort. Our casino operations are overseen by the New York State Gaming Commission ("NYSGC"). Gaming at the Casino is permitted 24 hours a day and is limited to persons over the age of 21. Smoking is not permitted in the Casino.

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The Alder

The Alder is a 101-room modern lifestyle hotel adjacent to Resorts Word Catskills. The Alder features an upscale cantina- style eatery, a Topgolf Swing Suite and a gift shop.

Amenities

Portions of the Casino opened to the public on February 8, 2018, and the Casino and its full complement of amenities were open to the public on January 1, 2019. The Alder opened to the public on January 1, 2019. Amenities at the Casino and The Alder include:

	Number of Guest Rooms and Suites	Approximate Square Footage	Slots	Gaming Tables
Casino	332 (1)	100,000 (2)	2,156	163 (4)
The Alder	101	69,500 (3)	—	—

(1) The Casino has 332 guest rooms and suites, which includes eight 1,000-1,200-square foot garden suites, seven 2,400-square foot two-story townhouse villas, and 12 penthouse-level suites.

(2) The Casino features a 100,000-square foot gaming floor, which includes a poker room, a VIP/high limit area located on the main gaming floor and a separate 4,000-square foot private gaming area containing private VIP gaming salons.

(3) The Alder is a 69,500-square foot building, which features an upscale cantina-style eatery, a Topgolf Swing Suite and a gift shop, as well as 101 guest rooms.

(4) Includes 144 house-banked games and 19 player-banked games.

Monticello Casino and Raceway

Monticello Casino and Raceway is a VGM and year-round harness horseracing facility. Monticello Casino and Raceway is approximately three miles away from the Destination Resort, is directly adjacent to New York State Route 17 and has highly visible signage and convenient access from Exit 104 of New York State Route 17.

VGM Operations

Monticello Casino and Raceway operates VGMs, which includes video lottery terminals (“VLTs”) and electronic table game positions (“ETGs”). VGMs are similar to slot machines, but they are connected to a central system and report financial information to the central system. ETGs include the games of roulette, blackjack and 3-card poker. Monticello Casino and Raceway currently features 1,070 VLTs and 20 ETGs (collectively, 1,090 VGMs) on a 45,000-square foot gaming floor with a separate high stakes VGM area. Monticello Casino and Raceway also has three dining options which include a food court, restaurant and sports bar.

The VGMs at Monticello Casino and Raceway are owned by New York State and are overseen by the NYSGC. Revenues derived from our VGM operations consist of VGM revenues and food and beverage revenues. Gross VGM revenues consist of the total amount wagered at our VGMs, less prizes awarded. Video lottery gaming is permitted for no more than 20 consecutive hours per day and on no day can such operation be conducted past 6:00 a.m.

The Company recently announced that VGM operations and food and beverage service at Monticello Casino and Raceway will cease on or about April 23, 2019.

Raceway Operations, Simulcasting and Pari-mutuel Wagering Activities

Raceway operations, which include live harness horseracing, simulcasting and pari-mutuel wagering activities in New York State, are overseen by the NYSGC. In a letter dated February 22, 2019, the NYSGC approved MRMI’s race dates for March and April, 2019. Generally, the annual license renewal process requires the NYSGC to review the financial responsibility, experience, character and general fitness of MRMI and its management.

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We derive our racing, simulcasting and pari-mutuel wagering revenue principally from the following:

• wagering at Monticello Casino and Raceway on live races run at Monticello Casino and Raceway and races broadcast from out-of-state racetracks using import simulcasting;

• fees from wagering at out-of-state locations and internationally on races run at Monticello Casino and Raceway

using export simulcasting; and

• revenue allocations, as prescribed by law, from betting activity at off-track betting facilities in New York State.

Simulcasting is the process by which a live horse race held at one facility (the “host track”) is transmitted to another location that allows patrons of such other location to wager on that race. Amounts wagered at each off-track betting location are combined into the appropriate pools at the host track’s tote facility where the final odds and payouts are determined. With the exception of a few holidays, we offer year-round simulcast wagering from racetracks across the country. In addition, races of national interest such as the Kentucky Derby, Preakness Stakes and Breeders’ Cup supplement our regular simulcast programming. We also export live broadcasts of our own races to race tracks, casinos and off-track betting facilities in the United States and internationally.

In pari-mutuel wagering, patrons bet against each other rather than against the operator of the facility or with pre-set odds. The amounts wagered form a pool of funds from which winnings are paid based on odds determined by the wagering activity. The racetrack acts as a stakeholder for the wagering patrons and deducts from the amounts wagered a “take-out” or gross commission from which the racetrack pays state and county taxes and racing purses. Our pari-mutuel commission rates are fixed as a percentage of the total handle or amounts wagered.

bet365 Collaboration Agreement

On November 14, 2018 (the “Effective Date”), the Company entered into a sportsbook and digital gaming collaboration agreement (the “Collaboration Agreement”) with Hillside (New York) LLC, an affiliate of bet365 Group Limited (“bet365”). Directly and through its affiliates, bet365 operates, owns, controls and manages online gaming and sports betting services throughout the world. The Collaboration Agreement provides the terms and conditions on which bet365 will participate with the Company in the offering of retail sports betting, an online sportsbook, online casino/table games and online poker in New York State, if and when permitted by applicable law (the “bet365 Collaboration”). The initial term of the Collaboration Agreement commenced on the Effective Date and, unless terminated earlier as described below, will continue in force until the earlier of the (i) 20th anniversary of the date on which the bet365 Gaming Services (as such term is defined below) are first offered to players pursuant to the Collaboration Agreement (the “Go-Live Date”) and (ii) termination of the Company’s Gaming Facility License. The initial term will be extended automatically for successive five-year periods unless a party provides at least 12 months’ written notice of its election not to renew.

Retail Sportsbook Lounge

The Casino is constructing a sportsbook lounge in anticipation of the adoption of regulations promulgated by the NYSGC regarding retail sports betting. Once bet365 receives the required approvals from the NYSGC with respect to the bet365 Collaboration and provides the Company notice, which notice will be provided within 12 months of the Go-Live Date, the operation and management of the sportsbook lounge will transition to bet365, at which point the lounge, originally branded with the Company’s brands, will be rebranded with a bet365 brand. Following the transition, bet365 will design and manage the betting platform, provide trading, odds and price setting and otherwise manage risk and provide marketing and marketing advisory services (the “bet365 Sportsbook Services”). The Company will continue to be responsible for the maintenance and day-to-day operational management of the sportsbook lounge following the transition. The Company will be reimbursed by bet365 for a portion of the build-out costs of the sportsbook lounge and 100% of the costs to operate the lounge prior to the transition, less the gaming revenue derived from the lounge after the payment of applicable gaming taxes prior to the transition (the “Pre-Transition Revenue”). If the Pre-Transition Revenue exceeds the build-out costs, such Pre-Transition Revenue will be shared in accordance with the Revenue Share Waterfall (which term is defined and discussed below). If the Collaboration Revenue (as such term is defined and discussed below) is insufficient to pay the build-out costs, bet365 will reimburse the Company and recover the shortfall payment through the Revenue Share Waterfall.

Online Sportsbook

If New York State enacts laws during the term of the Collaboration Agreement allowing the offering of an online sportsbook, bet365 will manage, control and administer an online sportsbook utilizing the Company’s Gaming Facility License (the “bet365 Online Sportsbook Services”). The online sportsbook will be offered under the bet365 brand. To the extent required by law, the online sportsbook will become branded with a bet365 brand and a Company brand, or branded solely with a Company brand. To the extent New York State allows more than one brand to operate an online gaming platform utilizing the Company’s Gaming

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Facility License (each such brand, a “Skin”) and the Company desires to offer additional Skins on the Gaming Facility License, the Company will consult with bet365 in good faith prior to offering additional Skins. The decision to offer additional Skins ultimately will be made by the Company; provided, however, (i) if such additional Skin is added to the Gaming Facility License prior to a specified anniversary of the enactment of New York State gaming laws permitting an online sportsbook (the “Online Enactment Date”), the majority of the Company’s independent directors must approve such decision and (ii) if such additional Skin is added to the Gaming Facility License after a specified anniversary of the Online Enactment Date, such decision must be approved by the Collaboration Committee (which term is defined and discussed below). Depending on whether the additional Skins are Company-branded Skins, offered in connection with a strategic capital investment in the Company or exchanged in return for access to jurisdictions outside New York State, the revenue generated from, and the costs associated with, the additional Skins will be shared by the Company and bet365 in accordance with the terms of the Collaboration Agreement.

Online Casino/Table Games and Online Poker

If New York State enacts laws during the term of the Collaboration Agreement allowing the offering of online casino/table games and/or online poker (the “Online Gaming Services” and, together with the bet365 Online Sportsbook Services, the “bet365 Gaming Services”), the parties will work in good faith and provide each other with reasonable assistance for bet365 to manage, control and administer such Online Gaming Services utilizing the Gaming Facility License. Following the date on which holders of a Gaming Facility License are permitted to provide the online casino/table games and/or online poker in New York State, bet365 will use commercially reasonable efforts to (i) cause the Go-Live Date to occur as soon as possible and (ii) for the Online Gaming Services offered by bet365 to be competitive in New York State. If bet365 uses good faith efforts to launch the Online Gaming Services but is unable to do so, such failure will not be a breach of the Collaboration Agreement and the Company may freely contract with a third party for such Online Gaming Services and the proceeds of such venture will be deemed Collaboration Revenue. The Online Gaming Services will be offered under the bet365 brand. To the extent required by law, the Online Gaming Services will become branded with a bet365 brand and a Company brand, or branded solely with a Company brand. If a Company-branded online sportsbook is offered in New York State, the Company may request that the Company-branded online sportsbook be configured to include the Online Gaming Services, as applicable. To the extent bet365 is successful at offering Online Gaming Services in New York State, the Company will not enter into any arrangement with a third party to offer online casino/table games and/or online poker using the Company brands.

Management of the Collaboration

The parties will form a committee of representatives from each party to approve certain actions relating to the Collaboration Agreement (the “Collaboration Committee”). In addition, the Collaboration Committee will adopt an annual plan covering intended product developments relating to the bet365 Sportsbook Services and bet365 Gaming Services, if any. At all times, the parties have the right to appoint an equal number of members to the Collaboration Committee and each of the Company and bet365 will initially appoint two members each. Unless a member is deemed an unsuitable person for purposes of the gaming laws of New York State, in which case such member will be removed immediately, only a party that appointed a member to the Collaboration Committee may remove such member and appoint a replacement. Each member of the Collaboration Committee is entitled to one vote and any decision to be made by the Collaboration Committee must be approved by the affirmative vote of at least one bet365 member and one Company member then in office. In the event the Collaboration Committee deadlocks on a decision, each party may request a meeting with the senior executives of both parties with the power and authority to resolve such deadlock.

Equity Investment into the Company

In connection with entering into the Collaboration Agreement, Hillside (New Media Holdings) Limited, an affiliate of bet365 ("bet365 Investor"), and the Company entered into a common stock purchase agreement (the “bet365 Common Stock Purchase Agreement”) pursuant to which bet365 Investor agreed to purchase up to 2.5 million shares of common stock of the Company at a purchase price of $20.00 per share, for an aggregate investment of $50 million. The terms and conditions of the bet365 Common Stock Purchase Agreement are discussed below.

After all gaming taxes have been paid and the parties have recouped their costs and expenses from the Collaboration Revenue, bet365 may receive a distribution (the “Preferred Distribution”) equal to 50% of the positive difference, if any (the “delta”), between $20 and the value of the Company’s common stock measured on a given date (such date, the “Trigger Date”), multiplied by the number of shares of common stock then held by bet365 Investor. The Trigger Date is 30 days after the Company’s first filing of an annual or quarterly report with the Securities and Exchange Commission after bet365 recoups its costs incurred pursuant to the Collaboration Agreement. The delta will be the positive difference between $20 and the 30-day volume-weighted average price of the Company’s common stock on the Trigger Date. If the Company is no longer a reporting company, or if the Company’s common stock is not listed on a national securities exchange, the delta will be the positive difference between $20 and the fair market value of the Company’s common stock as determined by an investment bank retained by the parties. If a change

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of control (as such term is defined in the Collaboration Agreement) of the Company occurs before the Trigger Date, the delta will be the positive difference between $20 and the per share value paid by a third party in a change of control transaction. The Preferred Distribution, if any, will be payable on a monthly basis over a period of three years (each such payment, a “Monthly Preferred Distribution”). If bet365 Investor sells any shares of common stock prior to the Trigger Date, the Preferred Distribution will be deemed to be $0.

Funding of Collaboration Costs and Distribution of Collaboration Revenue

Following the transition and the Go-Live Date, all costs associated with the bet365 Sportsbook Services and the bet365 Gaming Services, as applicable, will be funded out of the revenue generated pursuant to the Collaboration Agreement (the “Collaboration Revenue”). If the Collaboration Revenue is insufficient to cover the costs incurred under the Collaboration Agreement, bet365 will reimburse such costs and the shortfall will recouped by bet365 from future Collaboration Revenue.

The Collaboration Revenue will be distributed 50% to the Company and 50% to bet365 on a monthly basis according to a distribution waterfall (the “Revenue Share Waterfall”) set forth in the Collaboration Agreement, which sequentially will be distributed as follows: (i) all gaming taxes relating to the services provided pursuant to the Collaboration Agreement; (ii) costs incurred by the Company and then bet365 pursuant to the Collaboration Agreement; (iii) to bet365 until bet365 has recovered all investment costs incurred prior to the lounge or the Go-Live Date; (iv) Monthly Preferred Distribution to bet365, if any; (v) to bet365 to recoup agreed-upon gaming revenue shortfalls and capital investment catch-ups in the event there are additional Skins; and (vi) finally, 50% of the remaining Collaboration Revenue to each of the Company and bet365.

Gaming Approvals; Special Termination Right of bet365

Following the Effective Date, the Company and bet365 will engage in advocacy efforts in the New York State to permit the transactions contemplated by the Collaboration Agreement. In addition, following the Effective Date, bet365 will use commercially reasonable efforts to obtain the NYSGC approval required to own the equity of the Company. The Company will use commercially reasonable efforts to assist bet365 in obtaining such approval. In addition, if the New York State enacts regulations and/or laws during the term allowing the various transactions contemplated by the Collaboration Agreement, the parties agree to use their commercially reasonable efforts to obtain the necessary approvals to enable the parties to consummate the transactions contemplated by the Collaboration Agreement. To the extent required by the applicable gaming laws, the Company will be responsible for the regulatory oversight related to the arrangement with bet365.

Following the enactment of the regulations and/or laws necessary to enable the offering of the bet365 Sportsbook Services and/or the bet365 Gaming Services, the parties will monitor and assess such applicable gaming laws that affect the transactions contemplated by the Collaboration Agreement. To the extent that bet365 has a good faith concern that, as a result of provisions of the applicable gaming regulations and/or laws, the obligations of bet365 under the Collaboration Agreement will not be commercially viable, then the parties will discuss in good faith and engage in advocacy efforts to modify the applicable gaming laws. To the extent following such discussions or advocacy efforts, if in bet365’s good faith opinion it will not be commercially viable to operate the bet365 Gaming Services, bet365 can terminate the Collaboration Agreement. However, following such a termination, neither bet365 nor any affiliate may offer online gaming services in New York State for a period of 18 months.

Termination

The term of the Collaboration Agreement may be terminated by the mutual agreement of the parties. In addition, either party may terminate the Collaboration Agreement upon written notice (i) if New York State fails to enact laws authorizing an online sportsbook by certain agreed-upon dates, (ii) subject to notice and cure requirements, upon a material breach of the Collaboration Agreement, (iii) if the other party is deemed an unsuitable person under the applicable gaming laws and the issues cannot be remedied after commercially reasonable efforts, (iv) in the event the other party is bankrupt, (v) the NYSGC disapproves of the Collaboration Agreement and the parties are unable to amend the Collaboration Agreement without materially detrimentally frustrating the commercial intent of the parties, (vi) if a law is passed by New York State prohibiting an online sportsbook, (vii) if a federal law preempts the gaming laws of New York State such that the operation of an online sportsbook does not require a state license, or (viii) upon a change in control of the other party to a third party that is deemed to be a Highly Competitive Business (as such term is defined in the Collaboration Agreement) to such terminating party.

Guaranty and Offset

In connection with the Collaboration Agreement, bet365 Group Limited delivered to the Company a letter (the “Guaranty”) guarantying the payment obligations and indemnification obligations of bet365 under the Collaboration Agreement. The Guaranty

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will terminate upon the fifth anniversary of the date on which the parties begin receiving a share of the profits of the arrangement pursuant to the Collaboration Agreement.

If a notice of material breach of the Collaboration Agreement is delivered from one party to the other after the Guaranty terminates, a portion of the profit share received by the breaching party from the Collaboration Revenue will be held and not used or otherwise distributed to such party’s equity holders until the breach is cured. In addition, the non-breaching party can withhold any profit share it owes to the breaching party until the earlier of (i) the agreed-upon hold-back value is attained or (ii) the breaching party cures the breach.

General

Each party granted to the other (in the case of the Company to bet365, subject to the terms of applicable license agreement of the Company and its subsidiaries) a worldwide, revocable, royalty-free, non-sublicensable, non-exclusive and non-transferable license to use the intellectual property brands owned or licensed by the granting party in connection with the retail and online sportsbook, online casino/table games and online poker. The customer data obtained through the operation of the retail and online betting and gaming services and the Company's customer loyalty program will be jointly owned by bet365 and the Company.

The Company agreed to indemnify bet365 and its affiliates against liabilities arising out of third party claims relating to the operation of the Casino, a breach of the representations, warranties and covenants of the Company under the Collaboration Agreement, the intellectual property of the Company, any violation of law or failure to pay applicable gaming taxes by the Company, the cancellation or suspension of the NYSGC approvals obtained by bet365 due to the act or omission of the Company and any claims relating to a data breach in which data in the possession of the Company is accessed in an unauthorized manner. bet365 agreed to indemnify the Company and its affiliates against liabilities arising out of third-party claims relating to a breach of the representations, warranties and covenants of the Company under the Collaboration Agreement, the intellectual property of bet365, any violation of law or failure to pay applicable gaming taxes by bet365, the cancellation or suspension of the NYSGC approvals obtained by the Company due to the act or omission of bet365 and any claims relating to a data breach in which data in the possession of bet365 is accessed in an unauthorized manner.

The Collaboration Agreement contains further agreements of the parties concerning, among other things, confidentiality, non-solicitation of employees, and cross-promotion of the sportsbook lounge and the bet365 Gaming Services. In addition, the Company will use commercially reasonable efforts to cause Resorts World Casino New York City to provide marketing support for the bet365 Gaming Services and to provide registration or management facilities or wager terminals at Resorts World Casino New York City if permissible under applicable gaming laws and requested by bet365. The transaction contemplated by the Collaboration Agreement, as well as the suitability of bet365 and bet365 Investor, are subject to the approval of the NYSGC.

bet365 Common Stock Purchase Agreement

In connection with entering into the Collaboration Agreement, bet365 Investor and the Company entered into the bet365 Common Stock Purchase Agreement pursuant to which bet365 Investor agreed to purchase up to 2.5 million shares of common stock of the Company at $20 per share. In accordance with the bet365 Common Stock Purchase Agreement, the bet365 Investor purchased 1,685,759 shares of common stock upon execution of the bet365 Common Stock Purchase Agreement. The purchase of these shares was subject to, among other things, evidence of a commitment by Kien Huat Realty III Limited to invest up to $126 million of equity financing into the Company and further evidence that $12 million of such commitment was funded. Following the closing, bet365 Investor and the Company agreed to use reasonable best efforts to obtain all necessary consents from the NYSGC for bet365 Investor’s ownership of the equity interests of the Company. The offer and sale of these shares was made pursuant to a shelf registration statement on Form S-3 (File No. 333-214119), which became effective on November 17, 2016, pursuant to a base prospectus dated as of November 17, 2016 contained in such registration statement and a prospectus supplement filed with the Securities and Exchange Commission on November 14, 2018. The Company received net proceeds of $33.7 million from the offering.

Pursuant to the bet 365 Common Stock Purchase Agreement, the bet365 Investor will be obligated to purchase the remaining 814,241 shares of common stock at $20.00 per share so long as the following closing conditions are met: (i) 30 days have passed following the receipt of approval from the NYSGC of bet365 Investor’s ownership of the Shares and the enactment of laws by New York State allowing the offering of the bet365 Online Sportsbook Services; (ii) the representations and warranties of the Company are true and correct in all material respects and the Company has complied with its obligations under the bet365 Common Stock Purchase Agreement; (iii) the Collaboration Agreement is in full force and effect and there is no material breach of the Collaboration Agreement by the Company outstanding; (iv) the common stock of the Company continues to be listed on The

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Nasdaq Stock Market; (v) the Company continues to own 100% of the equity interests in the Casino; and (vi) the Gaming Facility License is still valid.

If the remaining shares are issued pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, or if the bet365 Investor is deemed an affiliate of the Company following the issuance of such shares, the bet365 Investor will have certain demand resale registration rights with respect to such shares.

The bet365 Common Stock Purchase Agreement may be terminated at any time prior to the closing on the remaining shares upon mutual consent of the Company and the bet365 Investor. Additionally, either the Company or the bet365 Investor may terminate the bet365 Common Stock Purchase Agreement if the NYSGC issues an order prohibiting such closing if such order did not result from the terminating party’s breach of the bet365 Common Stock Purchase Agreement. Additionally, either the Company or the bet365 Investor may unilaterally terminate the bet365 Common Stock Purchase Agreement if the bet365 Investor or the Company, as applicable, is in material breach of the bet365 Common Stock Purchase Agreement that is not cured and the non-breaching party is then in compliance. The bet365 Common Stock Purchase Agreement will terminate automatically if the Collaboration Agreement is terminated prior to the closing on the remaining shares or if the NYSGC denies the Company’s request to approve the bet365 Investor’s ownership of such shares.

Marketing

    Our marketing efforts are conducted through various channels. These channels include radio, television, print, outdoor and digital throughout the Hudson-Valley Catskill region and the larger New York City metropolitan area. Our more targeted marketing efforts are conducted through direct mail and email. We maintain websites to inform individuals and potential customers about Resorts World Catskills and Monticello Casino and Raceway and utilize several social media sites to promote our brands, unique events and special deals. Further, our direct marketing efforts utilize advanced analytic techniques that identify patron preferences to allow us to make more relevant offers to patrons, influence incremental visits, and help build lasting patron relationships.

Resorts World Catskills

The Casino receives patronage from adults residing within the metropolitan New York City area, including New York City, northern and northwestern suburbs of New York City, northern New Jersey and northeastern Pennsylvania. The Casino has an overall drive-time advantage relative to other full-scale gaming facilities from the northern and northwestern suburbs of New York City and the Company is focused on servicing what we believe is an unmet demand in the New York metropolitan market.

The Casino has a range of high-end offerings, including 600 square-foot hotel suites, private gaming salons, poolside townhouse villas and garden suites and a VIP reception area and players’ lounge with private elevator, which are designed to appeal to higher-end gaming patrons in the market. The Casino and The Alder are integrated into the master-planned Destination Resort, which will feature a range of year-round amenities, including an indoor waterpark (the "Indoor Waterpark") for which subsidiaries of EPR Properties, a party unrelated to the Company, are responsible for developing, and the Golf Course Project. The Casino is also convenient to recreational offerings in the Catskill Mountains. The Indoor Waterpark together with the Development Project, are referred to herein as "Initial Projects".

We leverage the Resorts World brand, which is a well-known hospitality brand in the Asian markets, to target the large regional Asian gaming market and high-end Asian players. The Casino offers various Asian-themed amenities, including table games and slot machines, an Asian gaming pit, high-end gaming and private gaming salons, and various authentic Asian food options.

We have a patron loyalty program to encourage patron relationships with Resorts World Catskills and increase loyalty to the Resorts World brand through unique benefits and rewards, while promoting our brand. When expanded, the patron loyalty program will include a rewards program that will allow patrons to qualify for benefits at participating Resorts World-branded resorts and in both gaming and non-gaming areas. Members may earn points for their gaming play which can be redeemed at participating properties. Information from the loyalty and rewards programs is used to analyze patron usage and preferences by segment and individual player profile.

Monticello Casino and Raceway

Monticello Casino and Raceway receives patronage from adults residing within the surrounding counties of New York, New Jersey and Pennsylvania. The average drive-time of our current patrons is up to 60 minutes and therefore we focus on a convenience gaming market.

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Monticello Casino and Raceway's mid-range offerings include gaming and dining options designed to appeal to locals and patrons interested in a more intimate and comfortable setting. Our Players' Club enables patrons to earn points that can be used for free slot play, complimentary food, merchandise, special offers, promotions, VIP invitations, discounts and coupons. The Players' Club also enables patrons to earn points when wagering on racing at Monticello Casino and Raceway.

Seasonality

The gaming market in the northeastern United States is seasonal in nature. Peak gaming activities occur during the months of May through September. Although winter weather may affect our patrons' ability to reach our facilities, we expect that the availability of the overnight accommodations at the Casino and The Alder will mitigate the adverse affects of winter weather on our gaming operations.

Competition

The casino entertainment industry is highly competitive. The industry is comprised of a diverse group of competitors that vary considerably in size and geographic diversity, quality of facilities and amenities available, marketing and growth strategies, and financial condition. Generally, we compete directly with casino and VGM facilities operating in the immediate and surrounding areas. Due to the geographic proximity, the Casino and Monticello Casino and Raceway may compete, in part, with each other for gaming patrons. The Casino competes with other gaming and non-gaming resorts and vacation areas, various other entertainment businesses, and also competes with other retail facilities, amusement attractions, food and beverage offerings, and entertainment venues.

In addition to competition from traditional gaming facilities, which is discussed in more detail below, the Casino and Monticello Casino and Raceway face competition from existing and prospective Internet gaming operations and sports wagering. New Jersey law permits Atlantic City casinos to conduct Internet gaming by accepting wagers from individuals who are physically present in New Jersey. Several New Jersey casinos and racetracks have sports wagering lounges and offer online sports pools. Additionally, mobile gaming is permitted in any area located within the property boundaries of a casino hotel facility, including any recreation or swimming pool and excluding parking garages and parking areas. Further, New Jersey law permits racetrack patrons to place bets on live or simulcast racing while they are on racetrack property, including the restaurants and outdoor areas, such as the paddock. New Jersey gaming regulations also authorized skill-based gaming options that appeal to a new generation of players. In October 2017, Pennsylvania signed into law new legislation also authorizes interactive gaming in the form of Internet gaming and up to five video gaming terminals at qualified truck stops. Further, several Pennsylvania casinos have begun to offer sports wagering.

A number of other states have adopted or are considering adopting legislation to specifically authorize Internet poker and Internet gambling. New Jersey, Nevada and Delaware entered into an agreement which allows Internet poker operators to pool players with partner sites in those states. New York legislators have introduced bills related to Internet gaming and Internet poker. Additionally, two state lotteries offer (and other state lotteries are considering offering) Internet instant game sales to in-state lottery customers and a number of other states, including New York, allow subscription sales of lottery draw games over the Internet. We are unable to determine whether and which, if any, additional legislation will be enacted and what effect it would have on our current operations.

In May 2018, the U.S. Supreme Court overturned the Professional and Amateur Sports Protection Act of 1992, which had prohibited states from authorizing sports wagering. As a result, certain states, including New York, have adopted or are considering adopting legislation to legalize sports betting. The NYSGC recently authorized the proposal of rules and regulations that would enable sports wagering to be offered at four commercial casinos in New York State, including the Casino. The proposed rules and regulations will enter a 60-day public comment period following the publication in the New York State Register before they become effective and the NYSGC can give final approval. The Casino is preparing to be able to offer sports wagering if and when it is permitted under the regulations.

We expect Internet gaming and sports wagering to continue to be the topic of additional legislation, including the expansion of legalization efforts within New York State to venues other than holders of Gaming Facility Licenses. We are unable to determine whether and which, if any, legislation will be enacted and what effect it will have on our operations and our prospects.

Resorts World Catskills

We face competition in and from the northeastern Pennsylvania, New Jersey and Connecticut gaming markets in marketing to and attracting patrons from the New York City metropolitan area. Pennsylvania casinos are the competitors located closest to

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our Casino. Pennsylvania casinos operate table games and slot machines, grant casino credit and have access to unlimited non-taxable free play. The competing Pennsylvania facilities include the following: Mohegan Sun at Pocono Downs, in Wilkes-Barre, Pennsylvania, located approximately 95 miles southwest of Monticello; Mount Airy Casino Resort in Mount Pocono, Pennsylvania, approximately 70 miles southwest of Monticello; and Sands Casino Resort in Bethlehem, Pennsylvania, located approximately 95 miles southwest of Monticello. In addition, in October 2017, Pennsylvania signed into law new legislation that authorized a number of gaming expansion opportunities. The legislation authorized up to 10 new casino satellite facilities, which would operate between 300 to 750 slot machines and up to 50 table games each. Licenses for these new facilities are awarded through an auction process that began in January 2018. This legislation also authorizes interactive gaming in the form of Internet gaming and up to five video gaming terminals at qualified truck stops. The legislation additionally authorizes fantasy sports wagering and sports wagering. New York State has regulatory limitations on the amount of taxable free play that may be offered to patrons. This could impact our competitiveness as compared to casinos in neighboring jurisdictions.

In addition to facing potential competition from the casinos in Atlantic City, legislators in New Jersey have reviewed options to expand gaming to various locations in northern New Jersey which could increase competition. Although New Jersey voters previously defeated a referendum in November 2016 to amend the New Jersey State Constitution to permit two casinos in northern New Jersey, another referendum could be introduced in the future. Currently, two of the northern New Jersey racetracks offer online sports wagering. We are unable to predict the impact additional gaming opportunities in northern New Jersey will have on our operations. 

We face competition from Mohegan Sun and Foxwoods Resort Casino, both of which are located on tribal reservations in Connecticut, and from certain VGM facilities in New York State, including VGM facilities located at Yonkers Raceway and Aqueduct Racetrack, both of which are within the New York City metropolitan area.

Further, we also face potential competition from the current or future expansion of state-licensed and tribal gaming in the northeastern United States. Commercial casino gaming has expanded in the northeastern United States and is poised to expand further. These expansions, many of which are convenience gaming facilities as opposed to destination gaming facilities, may affect our revenues.

Monticello Casino and Raceway

In New York State, we face competition for our VGM guests from Orange, Dutchess and Ulster counties in New York and from a VGM facility at Yonkers Raceway. To a lesser extent, Monticello Casino and Raceway faces competition from the Pennsylvania casinos, Mohegan Sun at Pocono Downs and Mount Airy Casino Resort, which are discussed above.

Generally, Monticello Casino and Raceway does not compete directly with other harness racing tracks in New York State for live racing patrons. However, Monticello Casino and Raceway does face intense competition for off-track and other legalized wagering at numerous gaming sites within New York State and the surrounding region. The inability to compete with larger purses for the races at Monticello Casino and Raceway and the limitation on other forms of legalized wagering that Monticello Casino and Raceway may offer has been a significant limitation on our ability to compete for off-track and other legalized wagering revenues.

Development

Development Project Expenditures

The Company currently expects the Development Projects, when completed, will cost an aggregate of approximately $928 million, which includes $765 million of anticipated costs for construction of the Development Projects, $68 million for interest expenses, $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 Alder in March 2018 after signing a guaranteed maximum price agreement with its construction manager, which was amended to $35.2 million in December 2018. During the fall of 2018, the Company signed a contractor agreement for the Golf Course Project for a total cost of approximately $21.2 million.

As of December 31, 2018, the Company has incurred an aggregate total of $867.3 million related to the Development Projects, including $704.7 million of capitalized Development Projects costs, of which approximately $699.0 million was reclassified to property and equipment upon the opening of the Casino and The Alder, $67.6 million of interest expense related to bank debt for the Development Projects, $51.0 million for the Gaming Facility License and incurred $44.0 million of debt issuance costs related to the Development Projects.

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The Golf Course Project

In addition to the Casino and The Alder, the Company is constructing the Golf Course Project at the site of the Destination Resort and anticipates that the Golf Course Project will open for play in Summer 2019. ERREI entered into a standard contractor agreement for 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.

Master Development Agreement and Completion Guaranties

On December 28, 2015, Montreign Operating, ERREI and ERREII (together, the "Project Parties"), on the one hand, and EPT Concord II, LLC ("EPT"), EPR Concord II, L.P. ("EPR LP") and Adelaar Developer, LLC, wholly-owned subsidiaries of EPR Properties (the “Destination Resort Developer,” together with EPT and EPR LP collectively, “EPR”), on the other hand, entered into an Amended and Restated Master Development Agreement (as amended, the “MDA”), which amends and restates that certain master development agreement by and between EPT and MRMI originally executed on December 14, 2012. The MDA defines and governs the overall relationship between EPR and the Project Parties with respect to the development, construction, operation, management and disposition of the Initial Projects.

In accordance with the terms of the MDA, EPR is responsible for the development and construction of the Indoor Waterpark and the common infrastructure-related improvements (such as streets, sidewalks, sanitary and storm sewer lines, water, gas, electric, telephone and other utility lines, systems, conduits and other similar facilities) for the Destination Resort. EPR has agreed to make a minimum capital investment of $120 million with respect to the Indoor Waterpark and the infrastructure for the Destination Resort. On December 28, 2015, EPR Properties, a real estate investment trust and the parent company of EPR, entered into a completion guaranty, guaranteeing completion of the development and construction obligations of EPR described in this paragraph.

Neither party has the right to terminate the MDA unless Montreign Operating fails to exercise the Purchase Option (as defined below) prior to its expiration in accordance with the terms and conditions of the Purchase Option Agreement (as defined below).

On January 24, 2017, the MDA was amended to (a) reflect that EPR has secured bond financing in connection with its infrastructure development obligations and (b) account for increases in the common infrastructure budget (and corresponding increases in Empire’s common infrastructure cap amount) in connection with the development of additional roads and increase in the budgeted amounts for New York State electric and gas costs. EPR financed the costs of the infrastructure by the issuance of tax-exempt bonds by a local development corporation. The debt service for these infrastructure bonds will be funded through special district tax assessments, a portion of which will be allocated to each of the parcels on which the Initial Projects are being built. EPR and the Project Parties have agreed to a capped dollar amount on the special district tax assessment for each of the parcels on which the Development Projects are being built, above which the Project Parties will not be responsible. The changes to Empire’s common infrastructure cap amount were also reflected in each of the amendments to the casino lease (the "Casino Lease"), the golf course lease (the "Golf Course Lease") and the lease for The Alder (the "Alder Lease").

Intellectual Property

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 Realty III Limited ("Kien Huat"), Empire's largest stockholder. 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 right to use the RWS Licensed Marks may be assigned or sublicensed only in certain limited circumstances. Because any use of the RWS Licensed Marks for a purpose other than the Permitted Uses will require the prior written consent of RWS, the Company will seek approval to use the RWS Licensed Marks in conjunction with the bet365 Collaboration. 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. Montreign Operating’s rights and obligations under the RWS License Agreement are subject to and governed by the rules and regulations applicable to Montreign Operating’s

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gaming operations at the Casino, and the fiduciary obligations of the boards of directors of Montreign Operating and Empire, as well as the fiduciary obligations of Kien Huat. 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 Alder or Golf Course and (iii) each specific use of the name Resorts World Catskills in connection with on-line 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 incurred an expense of approximately $1.5 million for the year ended December 31, 2018, reflecting the fee payable pursuant to the RWS License Agreement.

During the term of the RWS License Agreement, Montreign Operating may participate in the Genting Rewards Alliance loyalty program (the “Alliance”), which would provide central marketing and cross-promotion opportunities for the Development Projects with other members of the Alliance. Montreign Operating’s participation in the Alliance is subject to the provisions of a separate agreement, which is currently being negotiated by the parties.

Trademarks

Our principal intellectual property consists of trademarks for Montreign Operating and Monticello Casino and Raceway and includes the license agreement to use the RWS Licensed Marks. These trademarks are brand names under which we market our properties, venues and services. We consider these brand names to be important to our business since they have the effect of developing brand identification. We believe that the name recognition, reputation and image that we have developed will attract patrons to our facilities. It is our intent to pursue and maintain the trademark registrations consistent with our goals for brand development and identification, and enforcement of our rights.

Employees and Labor Relations

As of December 31, 2018, we had approximately 1,756 full-time and 100 part-time employees. We had collective bargaining agreements with unions covering approximately 1,400 of our employees as of December 31, 2018. We consider our employee relations to be good.

On January 23, 2019, the Company notified employees of MRMI concerning the Company’s plans to cease VGM operations and food and beverage service at Monticello Casino and Raceway. The Company anticipates these operations to cease on or about April 23, 2019. All affected employees of MRMI have been offered a severance package or a position with Montreign Operating.

Regulation and Licensing

The gaming industry is highly regulated and we must maintain our licenses and pay gaming taxes to continue our operations. The Casino and Monticello Casino and Raceway are subject to extensive regulation under the laws, rules and regulations of New York State. These laws, rules, and regulations generally concern the conduct of operations as well as the responsibility, financial stability, and character of the facilities, owners, managers, and persons with financial interests in the gaming operations. Individuals and entities, including investors and vendors conducting business with us, must file license/registration applications with the NYSGC, and in some instances must submit to background investigations by the New York State Police in order to prove suitability for licensure/registration. Application, fingerprinting and investigative fees must be paid by us or by the individual or entity seeking licensure or registration. Failure to obtain and maintain a license or registration, as applicable, could require us to sever our relationship with such individuals and/or entities, which could have a material adverse effect on our operations .

Our businesses are also subject to various federal, state and local laws and regulations in addition to gaming regulations. These laws and regulations include, but are not limited to, restrictions and conditions concerning alcoholic beverages, smoking, environmental matters, employees, currency transactions, taxation, zoning and building codes, construction, land use, and marketing and advertising. We also deal with significant amounts of cash in our operations and are subject to various reporting and federal anti-money laundering ("AML") laws, as further discussed below. Such laws and regulations could change or could be interpreted differently in the future, or new laws and regulations could be enacted. Material changes, new laws or regulations, or material differences in interpretations by courts or governmental authorities could adversely affect our operations . 

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Gaming Act and Gaming Facility License

The operations of the Casino are subject to regulation by the NYSGC, Division of Gaming. The Upstate New York Gaming and Economic Development Act ("Gaming Act") provides, among other things, the statutory framework for the regulation of full-scale casino gaming. The Gaming Act authorized the NYSGC to award up to four Gaming Facility Licenses. Effective March 1, 2016, the NYSGC awarded Montreign Operating the sole Gaming Facility License in the Hudson Valley-Catskills region, which consists of Columbia, Delaware, Dutchess, Greene, Orange, Sullivan and Ulster counties in New York State. The Gaming Facility License has an initial duration of 10 years from March 1, 2016 and will be renewable thereafter for a period of at least an additional 10 years, as determined by the NYSGC. The NYSGC also awarded one Gaming Facility License in the Albany region and two Gaming Facility Licenses in the eastern Southern Tier/Finger Lakes region. The Gaming Act provides that no casinos will be authorized in Bronx, Kings, New York, Queens or Richmond counties. New York State may, however, legislatively authorize additional Gaming Facility Licenses.

The Gaming Act provides for a seven-year exclusivity period for holders of Gaming Facility Licenses, commencing March 1, 2016, during which no further Gaming Facilities can be licensed by the NYSGC without legislative action. If the New York State legislature authorizes additional Gaming Facility Licenses within this exclusivity period, holders of the original four Gaming Facility Licenses will have the right to recover a pro rata portion of the license fee paid.

The Gaming Act imposes a $500 annual fee on each slot machine and table game. The tax rate on slot machines at the Casino is 39% and the tax rate on table games is 10%. Although free play allowances are not established by the Gaming Act, the NYSGC has promulgated a regulation that limits non-taxable free play, although the NYSGC may, at its discretion, authorize deviations from these limitations.

VGM and Racing Operations

Our VGM, harness horseracing and simulcast activities in New York State are overseen by the NYSGC, Division of Lottery and Division of Horse Racing and Pari-Mutuel Wagering, respectively. The NYSGC has the authority and responsibility to promulgate rules and regulations that affect the operations of our business. In a letter dated February 22, 2019, the NYSGC approved MRMI’s race dates for March and April, 2019. Generally, the annual license renewal process requires the NYSGC to review the financial responsibility, experience, character and general fitness of MRMI and its management.

We generate revenue from our VGM operations by receiving a commission on the gross revenue generated by the VGMs. The rate of this commission is set by statute. From April 1, 2008 until March 31, 2018, the statute provided that 41% of gross VGM revenue be distributed to us as a commission. Effective as of April 1, 2018, the statute reduced the commission rate to 39% of gross VGM revenue. However, with the arrival of casinos into the regions in which VGM facilities are currently operating in New York State, the Gaming Act provides that the commission payable to VGM facilities will be increased over the statutory amount and equalized to the blended tax rate payable by holders of Gaming Facilities Licenses with respect to gross gaming revenue generated on table games and slot machines. Accordingly, we expect the commission we receive on our VGM operations for the period following the opening of the Casino will equal the blended tax rate on the Casino's gross gaming revenue, which is calculated based on the Casino's gross gaming revenue divided by the actual taxes paid at the Casino. The actual blended tax rate is calculated for the period matching the fiscal year of New York State, which runs from April 1 of the current year to March 31 of the following calendar year. There is also a marketing allowance for racetracks operating video lottery programs of 10% on the first $100 million of net revenues generated and 8% thereafter. In addition, the statute provides for subsidized free play allowance of 15%.

The Gaming Act includes provisions intended to minimize the impact on horsemen of declining revenue at VGM facilities as a result of the introduction of casinos into the region. If VGM facilities are unable to maintain required purse support payments to horsemen at licensed racetracks in amounts equal to at least the 2013 payment amounts, as adjusted for the consumer price index, the holder of a Gaming Facility License in the region in which the licensed racetrack is located is required to make whole the deficit. Accordingly, if the purse support payments from Monticello Casino and Raceway to the horsemen are below the dollar levels realized in 2013, then the Casino must make whole the deficit.

Sports Wagering and Online Gaming

The Gaming Act provides, among other things, that sports betting at the gaming facilities such as the Casino is unlawful unless there has been a change in federal law authorizing such activity or upon ruling of a court of competent jurisdiction that such activity is lawful. In May 2018, the Supreme Court of the United States decided that the Professional and Amateur Sports Protection Act of 1992, which effectively outlawed sports betting nationwide, was unconstitutional. Therefore, upon the enactment of relevant regulations by the NYSGC, the Company may implement sports betting as part of the gaming experience at the Casino. In addition, if New York State enacts laws during the Term of the Collaboration Agreement allowing the offering of the bet365

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Online Gaming Services, the Company may participate with bet365 in offering online sports betting and online casino games. We can provide no assurance that the NYSGC will enact such regulations enabling the bet365 Sportsbook Services, New York State will legalize the bet365 Gaming Services or such regulations and legislation will be enacted during the Term of the Collaboration Agreement.

Anti-Money Laundering Laws

            The operations of the Casino and Monticello Casino and Raceway are subject to federal AML laws. The AML laws relate to the reporting of large cash transactions and suspicious activity and include screening transactions against lists maintained by the Office of Foreign Assets Control in order to prevent the processing of transactions to or from certain countries, individuals, nationals and entities. Our AML policy was developed by applying a risk-based approach and is tailored to our business activities and patron risk profiles. The risk assessment will be updated and revised to reflect changes in our business to ensure sufficiency and effectiveness of our AML policy. Failure to comply with the AML laws could subject us to significant fines and penalties.

Website Access

Our website addresses are www.empireresorts.com, www.rwcatskills.com, and www.monticellocasinoandraceway.com. Our filings with the Securities and Exchange Commission are available at no cost on www.empireresorts.com as soon as practicable after the filing of such reports with the Securities and Exchange Commission.

Item 1A. Risk Factors.

In addition to the other information contained in this report on Form 10-K, the following Risk Factors should be considered carefully in evaluating our business. If any of the following risks actually occur, our business, financial condition and results of operations could be materially and adversely affected.

Risks Relating to our Business

Our substantial indebtedness, and the fact that a significant portion of our cash flows is used to make principal and interest payments, fixed and percentage rent payments under the Casino Lease and the Alder Lease and meet other financial obligations, could adversely affect our ability to fund our operations, limit our ability to react to changes in the economy or our industry or implement new business initiatives and prevent us from making debt service payments and rent payments.

The Company is highly leveraged and as of December 31, 2018, we had approximately $596.0 million of principal amount of indebtedness outstanding. This amount includes $446.6 million outstanding under the Term B Loan, $64.8 million outstanding under the Term A Loan, $20 million outstanding under the Bangkok Bank Loan, $15 million outstanding under the Revolving Credit Facility, $30 million outstanding under the Kien Huat Subordinate Loan and $19.6 million outstanding under equipment purchase loans. Pursuant to the Casino Lease for the parcel on which the Casino is located and the Alder Lease on which The Alder is located, we will make approximately $7.7 million of fixed rent payments in 2019. In addition, we are obligated to pay annual percentage rent equal to five percent of eligible gaming revenue (according to a formula defined in the Casino Lease) and we are obligated to pay an annual special district tax assessment of approximately $1.8 million in the aggregate under the Casino Lease and the Alder Lease in 2019. Furthermore, as of the date on which the Casino opened to the public, Montreign Operating is required to pay 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 for its use of the RWS Licensed Marks. The Company incurred an expense of approximately $1.5 million for the year ended December 31, 2018, reflecting the fee payable pursuant to the RWS License Agreement of which $0.9 million was payable at December 31, 2018. Our ability to satisfy our debt obligations and lease obligations and meet other financial obligations will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, many of which are beyond our control.

Our substantial indebtedness and other financial obligations, and the restrictive covenants under the agreements governing the principal indebtedness, could:

• require a substantial portion of our cash flow from operations be dedicated to the payment of interest and principal on our indebtedness and the payment of rent, thereby reducing our funds available to us for other purposes;

• limit our ability to borrow money for our working capital, capital expenditures, Golf Course Project, debt service requirements, rent payment requirements, strategic initiatives, including the Collaboration, and other purposes;

• increasing our exposure to general adverse economic and industry conditions;

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• limiting our flexibility to plan for, or react to, changes in our business and industry;

• making it more difficult for us to satisfy our obligations with respect to our indebtedness and the Casino Lease and the Alder Lease, and any failure to comply with any of our obligations under our debt agreements or the Casino Lease or the Alder Lease, including restrictive covenants and borrowing conditions, could result in an event of default under those agreements; or

• placing us at a competitive disadvantage compared to less-leveraged competitors.

Moreover, the Golf Course Project will continue to be capital intensive. To the extent that we cannot fund expenditures from the remaining proceeds of the Term Loan Facility and cash generated by our operations, funds must be borrowed or otherwise obtained. Any of the foregoing could have a material adverse effect on our business, financial conditions, results of operations, prospects and the ability to satisfy our outstanding debt obligations and lease obligations.

Current and future cash flow may be insufficient to service all our indebtedness, lease payment and other financial obligations. If sufficient cash flow is not generated from operations to service our debt, make rent payments and meet other financial obligations, our business, financial conditions, results of operations and prospects could be materially adversely affected.

Our ability to make payments on our indebtedness, lease arrangements and other financial obligations depends on our ability to generate cash flow and obtain financing pursuant to the 2018 Kien Huat Preferred Stock Commitment Letter. If regional and national economic conditions deteriorate or if competition further intensifies, we could experience decreased revenues from our operations and could fail to generate sufficient cash to fund our liquidity needs or fail to satisfy the financial and other restrictive covenants in the agreements governing our principal indebtedness. Our estimated debt service (including principal and interest) is $104.1 million for 2019 and $715.0 million thereafter to maturity for our currently outstanding indebtedness under our principal debt arrangements. Our estimated lease obligations are $10.4 million for 2019 and $387.8 million thereafter to maturity for our outstanding lease arrangements. We cannot provide assurance that our business will generate sufficient cash flow from operations to service or debt, make rent payments and meet other financial obligations. If sufficient cash flow is not generated from operations to meet these needs, and additional financing is not available pursuant to the 2018 Kien Huat Preferred Stock Commitment Letter or otherwise, we may be required, among other things, to:

• seek additional financing in the debt or equity markets;

• delay, curtail or abandon altogether our development plans, including the Collaboration;

• refinance or restructure all or a portion of our indebtedness; or

• sell selected assets.

Such measures might be insufficient to service the indebtedness, make lease payments or meet other financial obligations. In addition, any such financing, refinancing or sale of assets may not be available on commercially reasonable terms, or at all. If funds are not available when needed, or available on acceptable terms, we may be required to delay, scale back or eliminate some of our obligations with respect to the Golf Course Project or Collaboration. In addition, we may not be able to grow market share, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements, which could negatively impact our business, operating results and financial condition.

The agreements governing our Term Loan Facility and other principal indebtedness contain restrictions and limitations that could significantly affect our ability to operate our business, as well as significantly affect our liquidity, and therefore could adversely affect our results of operations.

Covenants in the agreements governing our principal indebtedness restrict, among other things, our ability to:

• pay dividends or distributions, including from subsidiaries to Empire, repurchase or issue equity, prepay certain debt or make certain investments;

• incur additional debt, including limiting our ability to borrow further capital needed to complete the Golf Course Project or implement the Collaboration, if needed;

• direct a significant portion of our available cash to the payment of principal and interest on our indebtedness, thereby reducing our use of available cash to fund our operations, capital expenditures and future business opportunities;

• incur liens on assets;

• make certain investments;

• consolidate, merge, sell or otherwise dispose of all or substantially all of our assets;

• enter into certain transactions with our affiliates; and

• sell assets or consolidate with another company or sell all or substantially all of our assets.

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As a result of these covenants, we are limited in the manner in which we conduct our business and we may be unable to engage in favorable business activities or finance future operations or capital needs. Moreover, our ability to comply with these provisions may be affected by events beyond our control. The breach of any such covenants or obligations not otherwise waived or cured could result in a default under the applicable debt obligations and could trigger acceleration of those obligations, which in turn could trigger cross-defaults under other agreements governing our long-term indebtedness. In addition, the Term Loan Agreement requires us to satisfy certain financial covenants, including a maximum first lien net leverage ratio, a minimum interest coverage ratio, a maximum of consolidated capital expenditures and certain mandatory prepayments. Any default under the Term Loan Facility, the Revolving Credit Facility, Bangkok Bank Loan or the other principal debt agreements could adversely affect our growth, our financial condition, our results of operations and our ability to make payments on our debt. The ability to make payments of principal and interest on indebtedness will depend on the future performance of the Casino and The Alder, which is subject to general economic conditions, industry cycles and financial, business and other factors affecting our operations, many of which are beyond our control.

Repayment of our and our subsidiaries’ debt is dependent on cash flow generated by our subsidiaries.

Our subsidiaries currently own a significant portion of our assets and conduct a significant portion of our operations. Accordingly, repayment of our and our subsidiaries’ indebtedness is dependent, to a significant extent, on the generation of cash flow by our subsidiaries and, in the case of Empire’s debt, their ability to make such cash available to us by dividend, if needed, or otherwise. Our subsidiaries may not be able to, or may not be permitted to, make distributions to enable us to make payments in respect of our or our other subsidiaries’ indebtedness. Each subsidiary is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from our subsidiaries.

Defaults under any of our principal debt arrangements could result in a substantial loss of our assets.

We have pledged a significant portion of our assets as collateral under the Term Loan Agreement, the Revolving Credit Agreement and the Bangkok Bank Loan Agreement. A failure to repay any of this indebtedness as it becomes due or to otherwise comply with the covenants contained in any of our principal debt agreements could result in an event of default thereunder. If not cured or waived, an event of default under any of our principal debt agreements could enable the lenders thereunder to declare all borrowings outstanding on such debt, together with accrued and unpaid interest and fees, to be due and payable and terminate all commitments to extend further credit. The lenders could also elect to foreclose on our assets securing such debt. Such actions by the lenders could cause cross defaults pursuant to the terms of our principal debt agreements. In such an event, the Company may not be able to refinance or repay all of its indebtedness, pay dividends or have sufficient liquidity to meet operating and capital expenditure requirements. Any such acceleration could cause us to lose a substantial portion of our assets and will substantially adversely affect our ability to continue our operations.

The gaming industry in the northeastern United States is highly competitive, with many of our competitors better known and better financed than us.

We primarily compete directly with other hotel, resort and casino and VGM facilities operating in the immediate and surrounding market areas. The gaming industry in the northeastern United States is highly competitive and increasingly dominated by multinational corporations or Native American tribes that enjoy widespread name recognition, established brand loyalty, decades of casino operation experience, an array of amenities, high-quality management talent and a diverse portfolio of gaming assets and with substantially greater financial resources. To the extent that new casinos enter our market or hotel room capacity is expanded by others, competition will increase. Major competitors, including potential new entrants, may also expand their hotel room capacity, expand their range of amenities, improve their level of service, or construct new resorts in our regional markets in which we operate, all of which could attract our customers. Additionally, in May 2018, the United States Supreme Court overturned a federal ban on sports betting that had prohibited single-game gambling in most states, raising the potential for increased competition in sports betting should additional states pass legislation to legalize it.  The expansion of online gaming, sports betting, and other types of gaming in these and other jurisdictions may further compete with our operations by reducing customer visitation and spend in our casino resorts.

In a broader sense, our gaming operations face competition from all manner of leisure and entertainment activities, including shopping, athletic events, television and movies, concerts and travel. If our competitors operate more successfully than we do, if they attract patrons away from us as a result of aggressive pricing and promotion, if they are more successful than us in attracting and retaining employees, if their properties are enhanced or expanded, if they operate in jurisdictions that give them operating advantages due to differences or changes in gaming regulations or taxes, or if additional hotels and casinos are established in and around the locations in which we conduct business, we may lose market share or the ability to attract or retain employees. In particular, the expansion of casino gaming in or near any geographic area from which we attract or expect to attract a significant number of our patrons could have a significant adverse effect on our business, financial condition and results of operations.

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Our business is subject to extensive regulation and the cost of compliance or failure to comply with such regulations may adversely affect our business and results of operations. Moreover, our inability or the inability of our subsidiaries, key personnel, significant stockholders, vendors financial sources or joint venture partners to obtain or maintain required gaming regulatory licenses, permits or approvals could prevent us from operating our facilities or otherwise adversely impact our results of operation.

Gaming is a highly regulated industry that is subject to extensive federal, state, provincial, and/or local laws, regulations and ordinances that are administered by the relevant regulatory agency or agencies in each jurisdiction. These laws, regulations and ordinances vary from jurisdiction to jurisdiction, but generally concern the responsibilities, financial stability and character of the owners and managers of gaming operations as well as persons financially interested or involved in gaming operations, and often require such parties to obtain certain licenses, permits and approvals. In addition, some of the licenses that we and our subsidiaries, officers, directors, principal stockholders, financial sources and vendors hold expire after a relatively short period of time and thus require frequent renewals and reevaluations. Obtaining these licenses in the first place and the renewal process involves a subjective determination by the regulatory agencies. We can provide no assurance that we will be able to continually renew all registrations, permits, approvals or licenses necessary to conduct our operations as intended. The regulatory environment may change in the future and any such change could have a material adverse effect on our results of operations. For example, recently the U.S. Department of Justice reversed a 2011 opinion that had concluded that the Wire Act of 1961 was limited to gaming relating to sports; the Department of Justice concluded instead that certain of the Wire Act’s provisions apply also to other forms of wagering activity. This interpretation may adversely affect our business operations and our ability to engage in the Collaboration.  If we or our subsidiaries, financial sources or vendors do not obtain and maintain the required licenses, permits and approvals, we or such individuals or entities, may be required to divest any interest in our current or future gaming facilities or our current gaming facilities risk losing their licenses. These laws, regulations and ordinances may also affect the operations of our gaming facilities or our plans in pursuing future projects. Any adverse developments in the regulation of the gaming industry in New York State could be difficult to comply with and could significantly increase our costs, which could cause our operations to be unsuccessful.

Changes in the laws, regulations, and ordinances (including local laws) to which our gaming operations are subject, and changes in the application or interpretation of existing laws and regulations to our operations, may adversely affect our results of operation.

Casino gaming is still a relatively new industry in New York and many of the rules and regulations governing casino gaming are still evolving and subject to interpretation. Under the Gaming Act, the NYSGC has extensive authority to regulate gaming activities. The NYSGC also has the authority to interpret the Gaming Act, which has far-reaching effect on our business decisions. For example, the NYSGC decides whether a gaming option available at the Casino constitutes a slot machine or table game and that decision impacts the choices we make on laying out the gaming floor. Certain provisions of the gaming regulations that have significant impact on our operations, such as the allowance for free play, are promulgated by the NYSGC and not established by the Gaming Act. The NYSGC has further discretion to deviate from the established free play allowance and to revoke such deviation at any time. Moreover, lack of visibility into the applicability of, and the expense related to complying with, specific licensing requirements and background investigations means we are unable to pass on these costs to vendors and employees and thereby reduce our costs of operation. The uncertainty surrounding the evolving interpretations of the Gaming Act and the regulations promulgated by the NYSGC may hinder our ability to negotiate agreements with third parties, such as a vendor or a junket enterprise, and establish policies relating to our workforce because we are unable to effectively judge the relative costs and benefits of these relationships. These new or changing regulations and interpretations of the Gaming Act, as well as the uncertainty of the NYSGC's further actions with respect to such regulations and interpretations could adversely affect our results of operations.

New York State could grant additional Gaming Facility Licenses in our area or in New York City or the surrounding counties earlier than the expected seven-year blackout period, which could significantly increase the already intense competition in the northeastern United States and cause us to lose or be unable to gain market share.

The Gaming Act provides for the award of up to four Gaming Facility Licenses in three regions of upstate New York, including our area, and prohibits the issuance of Gaming Facility Licenses in the “downstate” region, which includes New York City and its surrounding counties. The award of such a Gaming Facility License is intended to be exclusive for a period of seven years commencing on the date of our award of the Gaming Facility License, which occurred in December 2015. We can provide no assurance that the New York State government will not change this law and issue additional Gaming Facility Licenses before the expiration of this seven-year exclusivity period. We expect the pressure on the New York State government to issue additional licenses before the seven-year exclusivity period will intensify as larger, well-established competitors, like MGM Resorts International, enter the New York market. If the New York State government were to allow additional competitors to operate in our area or in other regions of New York through the grant of additional Gaming Facility Licenses, we would face additional

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competition, which could significantly increase the already intense competition in the northeastern United States and cause us to lose or be unable to gain market share.

We expect that competition from internet gaming will continue to grow and intensify.

We expect that we will face increased competition from internet gaming as the potential for legalized internet gaming continues to grow. Several states have authorized internet gaming and Nevada, Delaware and New Jersey have entered into an agreement which allows internet poker operators to pool players with partner sites in those states. New Jersey casinos also participate in intrastate internet gaming. Our ability to compete in a marketplace containing multiple virtual casino platforms and monetize the Collaboration will depend on our ability to effectively market our gaming products to our patrons in the face of stiff competition as well as the availability of internet gaming in New York State. Currently, online gaming is not permitted in New York State and it is unclear when online gaming will be permitted, if at all. Furthermore, competition from internet lotteries and other internet wagering gaming services, which allow their patrons to wager on a wide variety of sporting events and play Las Vegas-style casino games from home, could divert patrons from the Casino and thus adversely affect our business. Such internet wagering services are likely to expand in future years and become more accessible to domestic gamblers as a result of initiatives in some states to consider legislation to legalize intrastate internet wagering. There have also been proposals that would specifically legalize internet gaming under federal law.

Our business is particularly sensitive to reductions in discretionary consumer and corporate spending as a result of global economic conditions.

Consumer demand for resort casinos, trade shows and conventions and for the type of luxury amenities that we offer is particularly sensitive to changes in the global economy, which adversely impact discretionary spending on leisure activities. Changes in discretionary consumer spending or consumer preferences brought about by factors such as perceived or actual general global economic conditions, high unemployment, weakness in housing or oil markets, perceived or actual changes in disposable consumer income and wealth, an economic recession and changes in consumer confidence in the global economy, or fears of war and future acts of terrorism have in the past and could in the future reduce patron demand for the luxury amenities and leisure activities we offer, and may have a significant negative impact on our operating results.

The loss or a reduction in the play of our most significant patrons could have a material adverse effect on our business, financial condition, results of operations and cash flows. A downturn in economic conditions in the countries in which these patrons reside could cause a reduction in the frequency of visits by and revenue generated from these patrons.

Also, consumer demographics and preferences may evolve over time, which, for example, has resulted in growth in consumer demand for non-gaming offerings. Our success depends in part on our ability to anticipate the preferences of consumers and react to those trends and any failure to do so may negatively impact our operating results.

We are subject to greater risks than a geographically diverse company.

Our operations are limited to the Catskills region of New York State, which has been affected by a decades-long decline in economic conditions. The majority of the patrons for our Casino come from the New York metropolitan area. As a result, in addition to our susceptibility to adverse global and domestic economic, political and business conditions, any economic downturn in the Catskills region or the New York metropolitan area could have a material adverse effect on our operations. An economic downturn would likely cause a decline in the disposable income of consumers, which could result in a decrease in the number of patrons at our facilities, the frequency of their visits and the average amount that they would be willing to spend at our facilities. We are subject to greater risks than more geographically diversified gaming or resort operations, including:

• a downturn in national, regional or local economic conditions;

• an increase in competition in New York State or the northeastern United States and Canada, particularly for day-trip patrons residing in the New York metropolitan area, including as a result of other gaming and entertainment operations in New York State, Connecticut, New Jersey and Pennsylvania;

• impeded access due to road construction or closures of primary access routes; and

• adverse weather and natural and other disasters in the northeastern United States.

The occurrence of any one of the events described above could cause a material disruption in our business and make us unable to generate sufficient cash flow to make payments on our obligations.

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We depend on our skilled employees and key personnel and the loss of their services would adversely affect our operations and business strategy.

The operation of our businesses requires qualified executives, managers and skilled employees with gaming, hospitality and horse racing industry experience and qualifications to enable such individuals to obtain and maintain the requisite licenses and approvals from the NYSGC. We also place substantial reliance on the gaming, project development and hospitality industry experience and knowledge of the northeastern United States gaming market possessed by members of our senior management team. If we are unable to maintain our key personnel and attract new skilled employees with high levels of expertise in the gaming areas in which we engage and propose to engage, or are unable to do so without unreasonably increasing our labor costs, the execution of our business strategy may be hindered and our growth limited. We believe that our success is largely dependent on the continued employment of our executive management and the hiring of strategic personnel at reasonable costs. Competition for skilled employees and qualified executives is intense and we can give no assurance that we would be able to hire a qualified replacement with the required level of experience and expertise for any current members of our senior management, if required to do so. Accordingly, if any of our current key executives were unable or unwilling to continue in his or her present position, or we were unable to attract a sufficient number of qualified employees at reasonable rates, our business, results of operations and financial condition would be materially adversely impacted. Additionally, recruiting and hiring a replacement for any skilled employees or executive management position could divert the attention of other senior management and increase our operating expenses.

A significant portion of our labor force is covered by collective bargaining agreements. Work stoppages, labor problems and unexpected shutdowns may limit our operational flexibility and negatively impact our future profits.

A significant portion of our workforce is represented by labor unions, and we could incur additional costs or experience work stoppages as a result of the renegotiation of our labor contracts.As of December 31, 2018, approximately 80% of our workforce was represented by labor unions. A prolonged dispute with the covered employees or any labor unrest, strikes or other business interruptions in connection with labor negotiations or others could have an adverse impact on our operations. Further, adverse publicity in the marketplace related to union messaging could further harm our reputation and reduce customer demand for our services. Also, wage and/or benefit increases resulting from new labor agreements may be significant and could also have an adverse impact on our results of operations.

The addition of new or changes to the existing collective bargaining agreements could cause significant increases in labor costs, which could have a material adverse effect on our businesses, financial condition and results of operations. In addition, the unions with which we have collective bargaining agreements or other unions could seek to organize groups of employees at our properties that are not currently represented by unions. Union organization efforts could cause disruptions in our businesses and result in significant costs. we cannot predict what level of success unions may have in further organizing this workforce or the potentially negative impact it would have on our operations. Any unexpected shutdown of our properties from a work stoppage or strike action could have a material adverse effect on our businesses and results of operations. Moreover, strikes, work stoppages or other job actions could also result in adverse media attention or otherwise discourage patrons, including convention and meeting groups, from visiting our properties. We cannot assure that we can be adequately prepared for labor developments that may lead to a temporary or permanent shutdown of any of our properties.

We often extend credit, and we may not be able to collect gaming receivables from our credit players or credit play may decrease.

We conduct our gaming activities on a credit as well as a cash basis. The casino credit we extend is generally unsecured and due on demand. We will extend casino credit to those patrons whose level of play and financial resources, in the opinion of management, warrant such an extension. The collectability of receivables from international patrons could be negatively affected by future business or economic trends or by significant events in the countries in which these patrons reside.

While gaming debts evidenced by a credit instrument, including what is commonly referred to as a "marker," are enforceable under the current laws of New York, and judgments on gaming debts are enforceable in all states of the United States under the Full Faith and Credit Clause of the United States Constitution, other jurisdictions may determine that direct or indirect enforcement of gaming debts is against public policy. Although courts of some foreign nations will enforce gaming debts directly and the assets in the United States of foreign debtors may be used to satisfy a judgment, judgments on gaming debts from U.S. courts are not binding on the courts of many foreign nations. We cannot assure that we will be able to collect the full amount of gaming debts owed to us, even in jurisdictions that enforce them. Changes in economic conditions may make it more difficult to assess creditworthiness and more difficult to collect the full amount of any gaming debt owed to us. Our inability to collect gaming debts could have a significant negative impact on our operating results.

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We face the risk of fraud and cheating.

Our gaming patrons may attempt or commit fraud or cheat in order to increase winnings. Acts of fraud or cheating could involve the use of counterfeit chips or other tactics, possibly in collusion with our employees. Internal acts of cheating could also be conducted by employees through collusion with dealers, surveillance staff, floor managers or other casino or gaming area staff. Failure to discover such acts or schemes in a timely manner could result in losses in our gaming operations. In addition, negative publicity related to such schemes could have an adverse effect on our reputation, potentially causing a material adverse effect on our business, financial condition, results of operations and cash flows.

Win rates for our gaming operations depend on a variety of factors, some of which are beyond our control.

The gaming industry is characterized by an element of chance. In addition to the element of chance, win rates are also affected by other factors, including players’ skill and experience, the mix of games played, the financial resources of players, the spread of table limits, the volume of bets played, the amount of time played and undiscovered acts of fraud or cheating. Our gross gaming revenues are mainly derived from the difference between our casino winnings and the casino winnings of our gaming patrons. Since there is an inherent element of chance in the gaming industry, we do not have full control over our winnings or the winnings of our gaming patrons.

In addition, premium gaming is more volatile than other forms of gaming, and variances in win-loss results attributable to high-end gaming may have a positive or negative impact on cash flow and earnings in a particular quarter.

Our table games business is subject to volatility which could adversely affect our financial condition.

Table gaming, especially high-end table gaming, is more volatile than other forms of gaming, and variances in table games hold percentage may have a positive or negative impact on our quarterly revenues and operating results. Negative variations in quarterly revenues and operating results could adversely affect our financial condition.

Extreme weather conditions may cause property damage or interrupt business, which could hard our business and results of operations.

Our properties are located in an area that may be subject to extreme winter weather conditions. Such extreme weather conditions may interrupt our operations, damage our property and reduce the number of customers who visit our facilities during these times. Such weather conditions may discourage potential patrons from traveling or may deter or prevent patrons from reaching our facilities and may cause visits to our properties to decrease for an indefinite period. If this occurs, it could have a material adverse effect on our operating results and ability to meet our financial obligations.

Our business is particularly sensitive to energy prices and a rise in energy prices could harm our operating results.

We are a large consumer of electricity and other energy and, therefore, higher energy prices may have an adverse effect on our results of operations. Accordingly, increases in energy costs may have a negative impact on our operating results. Additionally, higher electricity and gasoline prices which affect our patrons may result in reduced visitation to Resorts World Catskills and Monticello Casino and Raceway and a reduction in our revenues.

Negative conditions affecting the lodging industry may have an adverse effect on our revenues and cash flows.

We depend on revenues generated from our hotel, together with revenues generated from other portions of the facilities, to meet our financial obligations and fund our operations. Revenues generated from our hotel are primarily subject to conditions affecting our gaming operations, but are also subject to the lodging industry in general, and as a result, our financial performance and cash flows may be affected not only by the conditions in the gaming industry, but also by those in the lodging industry. Some of these conditions are as follows:

• changes in the local, regional or national economic climate, including economic recessions;

• changes in local conditions such as the supply of hotel properties;

• decreases in the level of demand for hotel rooms and related services;

• the attractiveness of our hotel to patrons;

• cyclical over-building in the hotel industry;

• changes in travel patterns;

• public health concerns affecting public accommodations or travel generally or regionally; and

• changes in room rates and increases in operating costs due to inflation and other factors.

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We are required to comply with extensive non-gaming laws and regulations.

We are also subject to a variety of other rules and regulations, including zoning, environmental, construction and land-use laws and regulations governing the serving of alcoholic beverages. If we are not in compliance with these laws, it could have a material adverse effect on our business, financial condition and results of operations.

We deal with significant amounts of cash in the operations and will be subject to various reporting and anti-money laundering regulations. We cooperate with all such inquiries. Any violation of AML laws or regulations, on which in recent years governmental authorities have been increasingly focused, with a particular focus on the gaming industry, by any of our properties could have a material adverse effect on our businesses, performance, prospects, value, financial condition and results of operations.

We have implemented internal control policies and procedures and employee training and compliance programs to educate employees about applicable regulation and deter prohibited practices. However, such policies, procedures and programs may not be effective in prohibiting our directors, employees, vendors or agents from violating or circumventing our policies and the law. If we or our directors, employees, vendors or agents fail to comply with applicable laws or our policies governing our operations, we may face investigations, prosecutions and other legal proceedings and actions, which could result in civil penalties, administrative remedies and criminal sanctions. Any such government investigations, prosecutions or other legal proceedings or actions could adversely affect our business, performance, prospects, value, financial condition, and results of operations.

A downgrade in our credit ratings could materially adversely affect our business and financial condition.

In connection with the Term Loan Facility and the Revolving Credit Facility, Montreign Operating was required to obtain credit ratings for its debt offering. Although the maintenance of a certain credit rating is not a condition to the availability of the Term Loan Facility or the Revolving Credit Facility, an adverse change in this credit rating and the credit ratings assigned to our debt securities could adversely affect our business. Such ratings are subject to ongoing evaluation by credit rating agencies, and any rating could be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances warrant such action. For example, such ratings could change based upon, among other things, our results of operations and financial condition.

The credit rating for the Term Loan Facility was downgraded in 2018 and the Company's rating outlook is negative. If any of the credit rating agencies that have rated our securities further downgrades or lowers its credit rating, or if any credit rating agency indicates that it has placed any such rating on a "watch list" for a possible downgrade or lowering, such action could have a material adverse effect on our costs and availability of funding in the future, which could in turn have a material adverse effect on our financial condition, results of operations, cash flows, the trading price of our securities and our ability to satisfy our debt service obligations, among other obligations.

We may incur additional indebtedness and lease commitments, which could adversely affect our ability to pursue certain business opportunities.

We and our subsidiaries may incur additional indebtedness and lease commitments at any time and from time to time in the future. Although the terms of the agreements governing our principal indebtedness contain restrictions on our ability to incur additional indebtedness, these restrictions are subject to a number of important qualifications and exceptions, and the indebtedness and lease commitments incurred in compliance with these restrictions could be substantial.

Instability and volatility in the financial markets could have a negative impact on our ability to raise additional capital to expand our businesses.

We may need to raise additional capital or incur additional indebtedness to finance our plans for growth. Instability and volatility in the financial markets caused by general economic conditions or otherwise may impede our ability to raise capital in the public or private credit or equity markets to fund our business strategy on terms we believe to be reasonable, if at all. Meanwhile, existing indebtedness, such as the Term Loan Facility and Revolving Credit Facility, contain, restrictive covenants that limit our ability to incur debt at all. Moreover, we may be unable to raise capital on terms acceptable to the Company. An inability to obtain the capital we need to finance our growth plans may adversely effect our operations and business prospects.

We may be subject to environmental liability as a result of unknown environmental hazards.

We are subject to various federal, New York State and local environmental laws and regulations that govern our operations and the construction of the Development Projects, including emissions and discharges into the environment, and the storage, handling and disposal of hazardous and non-hazardous substances and wastes. Failure to comply with such laws and regulations

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could result in regulatory fines, legal fees and costs for remediation. Such fines and costs could be related to our storage, handling and disposal of waste from our racing operations, the existence of asbestos-containing material at Monticello Casino and Raceway and the existence of environmental conditions at the site of the Development Projects, which could have a material adverse effect on our businesses, financial condition or results of operations.

Our information technology and other systems are subject to cybersecurity risk including misappropriation of patron information or other breaches of information security.

We rely on information technology and other systems to maintain and transmit patrons' personal and/or financial information, credit card information, mailing lists and other information. Cyber attacks, including through the use of malware, computer viruses, dedicated denial of services attacks, credential harvesting, social engineering and other means for obtaining unauthorized access to or disrupting the operation of our networks and systems and those of our suppliers, vendors and other service providers, could have an adverse effect on our business.We have taken steps designed to safeguard our patrons' personal and financial information and have implemented systems designed to meet all requirements of the payment card industry standards for data protection. However, our information and processes are subject to the ever-changing threat of compromised security, in the form of a risk of potential breach, system failure, computer virus or unauthorized or fraudulent access or use by unauthorized individuals. Cyber attacks may cause equipment failures, loss of information, including sensitive personal information of patrons or employees or valuable technical and marketing information, as well as disruptions to our operations. Cyber attacks against companies have increased in frequency, scope and potential harm in recent years. Further, the perpetrators of cyber attacks are not restricted to particular groups or persons. These attacks may be committed by company employees or external actors operating in any geography, including jurisdictions where law enforcement measures to address such attacks are unavailable or ineffective, and may even be launched by or at the behest of nation states. Cyber attacks may occur alone or in conjunction with physical attacks, especially where disruption of service is an objective of the attacker. While, to date, we have not been subject to cyber attacks which, individually or in the aggregate, have been material to our operations or financial condition, the preventive actions we take to reduce the risks associated with cyber attacks, including protection of our systems and networks, may be insufficient to repel or mitigate the effects of a major cyber attack in the future. The steps we take to deter and mitigate these risks may not be successful, and any resulting compromise or loss of data or systems could adversely impact operations or regulatory compliance and could result in remedial expenses, fines, litigation and loss of reputation, potentially impacting our financial results. Although we have invested in and deployed security systems and developed processes that are designed to protect all sensitive data, prevent data loss and reduce the impact of any security breach, such measures cannot provide absolute security. A significant theft, loss or fraudulent use of customer or company data maintained by us or by a third-party service provider could have an adverse effect on our reputation, cause a material disruption to our operations, and result in remediation expenses, regulatory penalties and litigation by customers and other parties whose information was subject to such attacks, all of which could have a material adverse effect on our business, results of operations and cash flows.

The failure to maintain the integrity of our computer systems and customer information could result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits and restrictions on our use of data. 

We collect and process information relating to our employees, guests, and others for various business purposes, including marketing and promotional purposes. The collection and use of personal data are governed by privacy laws and regulations enacted by various jurisdictions. Privacy laws and regulations continue to evolve and on occasion may be inconsistent between jurisdictions. Various federal, state and foreign legislative or regulatory bodies may enact or adopt new or additional laws and regulations concerning privacy, data retention, data transfer, and data protection. For example, the European Union has adopted a data protection regulation known as the General Data Protection Regulation, which became fully enforceable in May 2018, that includes operational and compliance requirements with significant penalties for non-compliance. In addition, California has enacted a new privacy law, known as the California Consumer Privacy Act of 2018, which takes effect in 2020 and provides some of the strongest privacy requirements in the United States.

Compliance with applicable privacy laws and regulations may increase our operating costs and/or adversely impact our ability to market our products, properties and services to our guests. In addition, non-compliance with applicable privacy laws and regulations by us (or in some circumstances non-compliance by third parties engaged by us), including accidental loss, inadvertent disclosure, unapproved dissemination or a breach of security on systems storing our data may result in damage to our reputation and/or subject us to fines, payment of damages, lawsuits or restrictions on our use or transfer of data. We rely on proprietary and commercially available systems, software, and tools to provide security for processing of customer and employee information, such as payment card and other confidential or proprietary information. Our data security measures are reviewed and evaluated regularly; however, they might not protect us against increasingly sophisticated and aggressive threats including, but not limited to, computer malware, viruses, hacking and phishing attacks by third parties. In addition, while we maintain cyber risk insurance to assist in the cost of recovery from a significant cyber event, such coverage may not be sufficient.

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Risks Relating to the Development Projects

Construction of the Development Projects, some of which is still ongoing, is subject to hazards that may cause personal injury or loss of life, thereby subjecting us to liabilities and possible losses, which may not be covered by insurance.

The construction of large-scale projects such as the Development Projects can be dangerous. Construction workers at our projects are subject to hazards that may cause personal injury or loss of life, thereby subjecting the contractor and us to liabilities, possible losses, delays in completion of the projects and negative publicity. In the event of such accidents, we may stop construction for several days to allow for safety inspections and investigations. We and our contractors will take safety precautions that are consistent with industry practice, but these safety precautions may not be adequate to prevent serious personal injuries or further loss of life, damage to property or delays. If such accidents occur, we may be subject to delays, including delays imposed by regulators, liabilities and possible losses, which may not be covered by insurance, and our business, prospects and reputation may be materially and adversely affected.

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 costs associated with the Development Projects may increase due to factors including unanticipated design, construction, regulatory and environmental problems. We could also experience:

• changes to plans and specifications, even after the opening of such facilities;

• delays and significant cost increases;

• shortages of materials;

• shortages of skilled labor or work stoppages for contractors and subcontractors;

• inability to meet MWBE participation goals;

• labor disputes or work stoppages;

• disputes with and defaults by contractors and subcontractors;

• health and safety incidents and site accidents;

• engineering problems, including defective plans and specifications;

• poor performance or nonperformance by any third parties on whom we place reliance;

• unforeseen construction scheduling, engineering, environmental, permitting, construction or geological problems;

• environmental issues, including the discovery of unknown environmental contamination;

• weather interference, floods, fires or other casualty losses;

• other unanticipated circumstances or cost increases; and

• failure to obtain necessary licenses, permits, entitlements or other governmental approvals.

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 which could materially adversely affect our financial condition and cause us to require additional external financing.

The Casino and The Alder have limited operating history and the Golf Course has no operating history. Our expectations for the operations of such properties may not serve as an adequate basis to judge our future operating results and prospects.

The Casino has limited historical information and The Alder opened in January 2019. There is no historical information about the Golf Course Project, which is still under development. As a result, you should consider our business and prospects in light of the risks, expenses and challenges that we will face as a company that recently began operating a major new development project and gaming business in a rapidly growing and intensely competitive market.

We have encountered and will continue to encounter risks and difficulties frequently experienced by companies developing a major new project, and those risks and difficulties may be heightened in a rapidly developing market such as the gaming market in the northeastern United States. Some of the risks relate to our ability to:

• attract and retain patrons and qualified employees;

• operate, support, expand and develop our operations and our facilities;

• maintain effective control of our operating costs and expenses;

• develop and maintain internal personnel, systems and procedures to assure compliance with the extensive regulatory requirements applicable to the gaming business;

• respond to changes in our regulatory environment; and

• respond to competitive market conditions.

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If we are unable to complete any of these tasks, we may be unable to complete and operate the Casino, The Alder and, when completed, the Golf Course Project, in the manner we contemplate and generate revenues in the amounts and by the times we anticipate. If any of these events were to occur, it would have a material adverse effect on our business and prospects, financial condition, results of operations and cash flows.

Even if the Casino, The Alder and the Golf Course Project are completed as planned and opened, they may not be financially successful, which would limit our cash flow and would materially adversely affect our operations and our ability to repay our debt.

Even if the Casino, The Alder and the Golf Course Project are completed as planned, one or more still may not be a financially successful venture or generate the cash flows that we anticipate. We cannot assure that the level of consumer demand for the Casino or for the type of luxury amenities that we offer will meet our expectations, and we may not attract the level of patronage that we are seeking. If the Casino, The Alder or the Golf Course Project do not attract sufficient business, this will limit our cash flow and would materially adversely affect our operations and our ability to service payments under our debt agreements. If any of these issues were to occur, it could adversely affect our prospects, financial condition, or results of operations.

Our business depends on a strong brand and if we are not able to build, maintain and enhance our brand, our ability to expand our market will be impaired and our business and operating results will be harmed.

On March 31, 2017, we entered into the RWS License Agreement, pursuant to which RWS granted to Montreign Operating the non-exclusive, non-transferable, revocable and limited to right to use certain “Genting” and “Resorts World” trademarks. Building, maintaining and enhancing our brand may require us to make substantial investments and these investments may not be successful. If we fail to promote and maintain our brand, or if we incur excessive expenses in this effort, our business, operating results and financial condition will be materially adversely affected. We anticipate that, as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive.

We consider the Resorts World brand name under which we market our facility, property and services to be important to our business since it has the effect of developing brand identification. We believe that the name recognition, reputation and image that we have developed attract patrons to our facilities. We anticipate the possibility that income generated from high-end gaming patrons can cause variability in our results.

Risks Relating to our Ownership Structure

Stockholders’ ability to influence corporate decisions may be limited because our major stockholder owns a large percentage of our common stock.

Kien Huat is the beneficial holder of 28,914,606 shares of our common stock, representing approximately 84.0% of our voting power as of March 14, 2019. Pursuant to the terms of the Kien Huat 2018 Preferred Stock Commitment Letter, Kien Huat currently holds 320 shares of Series F Preferred Stock, which are convertible into an aggregate of 1,600,000 shares of common stock, as of March 14, 2019. If Kien Huat exercised such conversion option, Kien Huat's common stock holdings would increase to to 30,514,606 shares of our common stock, representing approximately 88.6% of our voting power as of March 13, 2019.

Under the terms of an investment agreement dated November 12, 2009 (the "2009 Investment Agreement"), Kien Huat is entitled to recommend three directors candidates whom we are required to cause to be elected or appointed to our Board of Directors (“Board”), subject to the satisfaction of all legal and governance requirements regarding service as a director and to the reasonable approval of the Corporate Governance and Nominations Committee of our Board. Kien Huat will continue to be entitled to recommend three directors candidates for so long as it owns at least 24% of our voting power outstanding at such time, after which the number of directors whom Kien Huat will be entitled to designate for election to our Board will be reduced proportionally to Kien Huat’s percentage of ownership. Under the 2009 Investment Agreement, for so long as Kien Huat is entitled to recommend nominees to serve as Board members, among other things, Kien Huat will have the right to nominate one of its director designees to serve as the Chairman of the Board. Emanuel Pearlman has been appointed to serve as Chairman of the Board pursuant to Kien Huat’s recommendation. Until such time as Kien Huat ceases to own capital stock with at least 30% of our voting power outstanding at such time, our Board will be prohibited under the terms of the Investment Agreement from taking certain actions relating to fundamental transactions involving us and our subsidiaries and certain other matters without the affirmative vote of the directors recommended by Kien Huat and elected by shareholders. Consequently, Kien Huat has the ability to exert significant influence over our policies and affairs, including the election of our Board and the approval of any action requiring a stockholder vote, such as approving amendments to our certificate of incorporation and mergers or sales of substantially all of our assets, as well as other matters. Although Kien Huat has expressed no interest in doing so, Kien Huat is not restricted from acquiring additional shares

23

of our common stock, including through open market purchases. However, on February 17, 2016, and as amended on December 28, 2017, we entered into a letter agreement with Kien Huat (the "Kien Huat Letter Agreement"), wherein Kien Huat agreed, for a period of four years from the date of the Kien Huat Letter Agreement, to seek certain approvals of the Board and minority shareholders in connection with any "going-private" transaction. Notwithstanding the Kien Huat Letter Agreement, this concentration of voting power could delay or prevent an acquisition of the Company on terms that other stockholders may desire or force the sale of our company on terms undesirable to other stockholders.

Risks Relating to the Market Value of Our Common Stock

The Racing, Pari-Mutuel Wagering and Breeding Law of New York State requires our stockholders to possess certain qualifications. If the NYSGC believes a stockholder does not meet its subjective determination, a stockholder may be forced to sell any stock they hold and such sale may result in a material loss of investment value for the stockholder.

The Racing, Pari-Mutuel Wagering and Breeding Law of New York State requires our stockholders to possess certain qualifications. A failure to possess such qualifications could lead to a material loss of investment by either us or our stockholders, as it would require divestiture of the stockholder’s direct or indirect interest in us. Consequently, should any stockholder ever fail to meet the qualifications necessary to own a direct or indirect interest in us as determined by NYSGC, such stockholder could be forced to liquidate all interests in us. Should such stockholder be forced to liquidate these interests within a relatively short period of time, such stockholder would likely be forced to sell at a discount, causing a material loss of investment value.

The market price of our common stock is volatile, leading to the possibility of its value being depressed at a time when our stockholders want to sell their holdings.

The market price of our common stock has in the past been, and may in the future continue to be, illiquid and volatile. For instance, between January 1, 2018 and March 14, 2019, the closing price of our common stock has ranged between $6.42 and $30.90 per share. A variety of events may cause the market price of our common stock to fluctuate significantly, including, but not limited to the following:

• quarter-to-quarter variations in operating results;

• day traders;

• adverse or positive news reports or public announcements; and

• market conditions for the gaming industry.

In addition, the stock market in recent years has experienced significant price and volume fluctuations. This volatility has had a substantial effect on the market prices of companies, at times for reasons unrelated to their operating performance. These market fluctuations may adversely affect the price of our common stock and other interests in the Company at a time when our stockholders want to sell their interest in us.

If we fail to meet the applicable continued listing requirements of NASDAQ Global Market, NASDAQ may delist our common stock, in which case the liquidity and market price of our common stock could decline.

Our common stock is currently listed on the NASDAQ Global Market. In order to maintain that listing, we must satisfy certain continued listing requirements. If we are deficient in maintaining the necessary listing requirements, our common stock may be delisted. If our common stock is delisted, an active trading market for our common stock may not be sustained and the market price of our common stock could decline.

We do not anticipate declaring any dividends in the foreseeable future.

During the past three fiscal years, we did not declare or pay any cash dividends with respect to our common stock. 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. We do not anticipate declaring any cash dividends on our common stock in the foreseeable future. We intend to retain all future earnings for use in the development of our business. There can be no assurance that we will have, at any time, sufficient surplus under Delaware law to be able to pay any dividends.

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Future sales of our common stock by our insiders may cause our stock price to decline.

A portion of our outstanding shares are held by directors and executive officers and a significant portion of our outstanding shares are held by Kien Huat, our largest stockholder. Resales of a substantial number of shares of our stock by these stockholders, announcements of the proposed resale of substantial amounts of our stock, or the perception that substantial resales may be made by such stockholders could adversely impact the market price of our stock. Some of our directors and executive officers have entered into Rule 10b5-1 trading plans pursuant to which they have arranged to sell shares of our common stock from time to time in the future. Actual or potential sales by these insiders, including those under a prearranged Rule 10b5-1 trading plan may adversely impact the market price of our stock.

Future sales of shares of our common stock in the public market could adversely affect the trading price of shares of our common stock and our ability to raise funds in new stock offerings.

Future sales of substantial amounts of shares of our common stock in the public market, including pursuant to the 2018 Kien Huat Preferred Stock Commitment Letter , or the perception that such sales are likely to occur could affect the market price of our common stock. Kien Huat’s stock ownership may also discourage a potential acquirer from making a tender offer or otherwise attempting to obtain control of us, which in turn could reduce our stock price or prevent our stockholders from realizing a premium over our stock price.

Risks Relating to our Racing Operations

The continuing decline in the popularity of horse racing, decline of the horse population and increasing competition in simulcasting could adversely impact the business of Monticello Casino and Raceway.

Since the mid-1980s, there has been a general decline in the number of people attending and wagering at live horse races at North American racetracks due to a number of factors, including increased competition from other forms of gaming, unwillingness of guests to travel a significant distance to racetracks and the increasing availability of off-track wagering. The declining attendance at live horse racing events has prompted racetracks to rely increasingly on revenues from inter-track, off-track and account wagering markets. The industry-wide focus on inter-track, off-track and account wagering markets has increased competition among racetracks for outlets to simulcast their live races. In each of 2018, 2017 and 2016, we generated approximately $2.9 million of revenues from the import and export simulcasting of out-of-state racing, of which approximately $1.4 million in each year was due to the horsemen. A continued decrease in attendance at live events and in on-track wagering, continued decline in the horse population and available drivers, as well as increased competition in the inter-track, off-track and account wagering markets, could lead to a decrease in the amount wagered at Monticello Casino and Raceway. Our business plan anticipates the possibility of Monticello Casino and Raceway attracting new guests to our racetrack wagering operations through VGMs in order to offset the general decline in raceway attendance. However, even if our VGM operations attract new guests to our racetrack, we may not be able to generate profit from operations. Public tastes are unpredictable and subject to change. Any further decline in interest in horse racing or any change in public tastes may adversely affect our revenues and, therefore, limit our ability to make a positive contribution to our results of operation.

Risks Relating to the Collaboration

There can be no assurance that the New York State will enact regulations and/or laws allowing the offering of the bet365 Sportsbook Services or the bet365 Gaming Services, in which case we may never sell additional shares to bet365 under the Collaboration Agreement or otherwise generate any Collaboration Revenues from the Collaboration Agreement.

The Gaming Act provides, among other things, that sports betting at gaming facilities such as the Casino is unlawful unless there has been a change in federal law authorizing such activity or upon ruling of a court of competent jurisdiction that such activity is lawful. In May 2018, the Supreme Court of the United States decided that the Professional and Amateur Sports Protection Act of 1992, which effectively outlawed sports betting nationwide, was unconstitutional. Therefore, upon the enactment of relevant regulations by the NYSGC, the Company may implement sports betting as part of the gaming experience at the Casino. In addition, if the State of New York enacts laws during the term of the Collaboration Agreement allowing the offering of the bet365 Online Gaming Services, the Company may participate with bet365 in offering online sports betting and online casino games. We can provide no assurance that the NYSGC will enact such regulations enabling the bet365 Sportsbook Services, that New York State will legalize the bet365 Gaming Services or such regulations and legislation will be enacted during the term of the Collaboration Agreement. Unless New York State promulgates the regulations enabling the Company to offer the bet365 Sportsbook Services or any of the bet365 Gaming Services during the term of the Collaboration Agreement, the Company’s ability to generate revenues under the Collaboration Agreement will be materially adversely affected.

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The NYSGC may deem bet365 a person unsuitable to offering any of the bet365 Sportsbook Services or bet365 Gaming Services pursuant to the Collaboration Agreement or the bet365 Investor unsuitable to own equity interests in the Company, in which case we may never sell the shares not yet issued to bet365 under the Collaboration Agreement, we may need to repurchase the shares previously purchased by bet365 pursuant to the terms of applicable gaming laws and our Second Amended and Restated Certificate of Incorporation, and we may never generate any Collaboration Revenues from the Collaboration Agreement.

The ownership of equity interest in the Company and the management and operation of gaming services are subject to extensive state laws and regulations administered by the NYSGC. These laws and regulations concern the responsibilities, financial stability and character of the owners and managers of gaming operations as well as persons financially interested or involved in gaming operations, and require such parties to obtain certain licenses, permits and approvals. In addition, the licenses, permits and approvals generally expire after a relatively short period and thus require frequent renewals and reevaluations. Obtaining these licenses, permits and approvals in the first place and the renewal process involves a subjective determination by the NYSGC. If bet365 or bet365 Investor do not obtain and maintain the required licenses, permits and approvals, we may never sell the shares not yet issued to bet365, we may need to repurchase the shares previously purchased by bet365, and we may never generate any Collaboration Revenues from the Collaboration Agreement. If, after receipt of a license, permit or approval bet365 or bet365 Investor are required to divest their interest in the Company or the operation of the bet365 Sportsbook Services or bet365 Gaming Services, we risk losing our Gaming Facility License unless such divestiture occurs.

Following the receipt of approval of bet365 Investor's ownership of the shares or the enactment of the regulations and/or laws necessary to enable the offering of the bet365 Sportsbook Services and/or the bet365 Gaming Services, bet365 may determine the Collaboration Agreement is not commercially viable, in which case it may terminate the Collaboration Agreement. If bet365 terminates the Collaboration Agreement pursuant to this right, the Company’s ability to offer commercially competitive sports betting and online gaming services may be materially adversely affected.

Following the enactment of the regulations and/or laws necessary to enable the offering of the bet365 Sportsbook Services and/or the bet365 Gaming Services, the parties will monitor and assess such applicable gaming laws that affect the transactions contemplated by the Collaboration Agreement. To the extent that bet365 has a good faith concern that, as a result of provisions of the applicable gaming regulations and/or laws, the obligations of bet365 under the Collaboration Agreement will not be commercially viable, then the parties will discuss in good faith and engage in advocacy efforts to modify the applicable gaming laws. If in bet365’s good faith opinion it will not be commercially viable to operate the bet365 Gaming Services, bet365 can terminate the Collaboration Agreement. If bet365 terminates the Collaboration Agreement, we may not be able to compete successfully for gaming customers with established sports betting or online gaming service providers, which may have a significant adverse effect on our ability to generate any revenue from sports betting or online gaming services in New York State.

In the event the market price or fair market value of the Company’s common stock will be below $20 on the Trigger Date, bet365 will receive the Preferred Distribution in the amount of the Common Stock Delta, which will reduce or delay the Company’s receipt of a share of profits from the Collaboration Revenue.

After all gaming taxes have been paid and the parties have recouped their costs and expenses from the Collaboration Revenue, bet365 is entitled to receive from the Collaboration Revenue a distribution equal to 50% of the positive difference, if any, between $20 and the value of the Company’s common stock (measured in accordance with the Collaboration Agreement) on the Trigger Date multiplied by the number of shares of common stock bet365 then holds. The Preferred Distribution, if any, will be payable from the Collaboration Revenue on a monthly basis over a period of three years. The payment of a Preferred Distribution from the Collaboration Revenue will defer and may materially adversely affect the amount of profits the Company receives from the Collaboration Revenue.

Even if New York State enacts regulations and/or laws permitting the bet365 Sportsbook Services and/or the bet365 Gaming Services during the term of the Collaboration Agreement, the bet365 Collaboration may never be profitable for the Company.

There is no operating history between the Company and bet365, and the proposed transaction is highly speculative. The success of the bet365 Collaboration is dependent on the enactment by New York State of the regulations and laws required to allow the Company and bet365 to provide the products and services contemplated by the Collaboration Agreement. We may encounter unforeseen expenses, difficulties, complications, delays and other unknown factors that may adversely affect the bet365 Collaboration and our ability to commercialize any products or services pursuant thereto. Even if the products and services contemplated by the bet365 Collaboration obtain the necessary approvals of New York State, our products and services may fail to achieve market acceptance and we may never become profitable. Even if the bet365 Collaboration achieves profitability in the future, we may not be able to sustain profitability in subsequent periods. As a result, our stockholders may never benefit from the transaction.

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Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

The Casino, The Alder and the Golf Course Project

The Casino and The Alder are located at the site of the Destination Resort on approximately 1,700 acres in the Town of Thompson in Sullivan County, New York, which is owned by EPR Properties, an entity unrelated to the Company. The Golf Course Project is being developed on a parcel adjacent to the Casino and The Alder. The Company also has opportunities for future expansion on the existing and adjacent parcels within the Destination Resort. The Project Parties lease from subsidiaries of EPR Properties the parcels on which the Development Projects are located. The terms of such leases are described below.

Casino Lease

On December 28, 2015, Montreign Operating entered into the Casino Lease with EPT for the lease of the parcel on which the Casino was constructed (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 each of the 20th, 30th, 40th, 50th and 60th anniversaries of the commencement of the Casino Lease (each such anniversary, an "Option Date"). 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 future fixed rent payments under the Casino Lease at December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1)	$7,500
2020 (1)	7,500
2021 (1)	8,000
2022 (1)	8,100
2023 (1)	8,100
2024 to 2056 (1)	$338,424

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

In addition to fixed rent, beginning in 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 the Golf Course Lease with the Destination Resort Developer for the lease of the parcel on which the Golf Course will be developed (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.

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The following table represents the future fixed rent payments under the Golf Course Lease at December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1) (2)	$63
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 (2)	150
2024 to 2056 (2) (3)	$7,483

(1) From the date the Golf Course Lease commenced 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.

The Alder Lease

On December 28, 2015, ERREII entered into the Alder Lease with the Destination Resort Developer, for the lease of the parcel on which The Alder was constructed (the "Alder Parcel" and, together with the Casino Parcel and the Golf Course Parcel, the "Project Parcels"). The terms of the Alder Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Alder Lease, there is no percentage rent due.

The following table represents the future fixed rent payments under the Alder Lease at December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1) (2)	$150
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 (2)	150
2024 to 2056 (2) (3)	7,542

(1) Prior to January 2, 2019 (the "Alder Opening Date"), fixed rent payments were equal to $0.

(2) From January 2, 2019, 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 Alder Lease, fixed rent will equal $250,000 per year.

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

On January 24, 2017, each of the Casino Lease, the Golf Course Lease and the Alder Lease were amended to correct scrivener’s errors in the legal descriptions of the Project Parcels.

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Purchase Option Agreement

On December 28, 2015, Montreign Operating and EPT, EPR Concord II, Destination Report Developer and EPR Concord II, L.P. ("EPR LP" and together with EPT and Destination Resort Developer, "EPR") entered into a Purchase Option Agreement (the "Purchase Option Agreement"), pursuant to which EPR granted to Montreign Operating the option to purchase (the "Purchase Option") all, but not fewer than all, of the Project Parcels for a purchase price of $175 million ($200 million after the sixth anniversary on March 1, 2022, less a credit of up to $25 million for certain previous payments made by the Project Parties). The Purchase Option commenced on December 28, 2015 and will expire on the earlier to occur of (i) the natural expiration of the term of the Casino Lease and (ii) 90 days following the earlier termination of the Casino Lease, if otherwise terminated in accordance with its terms (the “Purchase Option Period”).

Under the Purchase Option Agreement, EPR also granted to Montreign Operating the option (the "Resort Project Purchase Option") to purchase not less than all of the balance of the contiguous acres owned by EPR (the "EPR Property"), excluding the Development Project Parcels and the Waterpark (the "Resort Property"), for an additional fee. The Resort Project Purchase Option may be exercised only simultaneously with or after the exercise of the Purchase Option. The Resort Project Purchase Option commenced on December 28, 2015 and will expire on the earlier to occur of (a) the expiration of the Purchase Option Period or (b) March 1, 2026.

Under the Purchase Option Agreement, EPR also granted to Montreign Operating a right of first offer ("ROFO") with respect to all or any portion of the Resort Property. Under the terms of the ROFO, if EPR makes an offer to or rejects an offer made by Montreign Operating, then EPR is precluded for a period of six months from transferring the designated portion of the Resort Property at a price and on terms which are on the whole substantially equivalent to or worse than those proposed or accepted by Montreign Operating. The ROFO commenced on December 28, 2015 and will continue in full force and effect until EPR has sold, leased, licensed or otherwise transferred all of the Resort Property.

Monticello Land

Monticello Casino and Raceway is located on a 232-acre parcel of land in Monticello, New York, which is held in fee by MRMI. Monticello Casino and Raceway includes pari-mutuel wagering facilities (including simulcasting), a paddock, exterior barns and related facilities for the horses, drivers, and trainers. In addition, our VGM operation is conducted at Monticello Casino and Raceway, which includes a 45,000-square foot gaming floor. The corporate offices of the Company are located at Monticello Casino and Raceway.

Item 3. 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 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is listed on the NASDAQ Global Market under the symbol “NYNY”.

Holders

According to Continental Stock Transfer & Trust Company, the Company's transfer agent, there were approximately 200 holders of record of our common stock at March 14, 2019.

Dividends

During the past three fiscal years, we did not declare or pay any cash dividends with respect to our common stock and we do not anticipate declaring any cash dividends on our common stock in the foreseeable future. We intend to retain all future earnings for use in the development of our business. There can be no assurance that we will have, at any time, sufficient surplus under Delaware law to be able to pay any 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.

The Board authorized the cash payment of Series B Preferred Stock quarterly dividends for the 2018 calendar year. Payments in the amount of $32,087 were made on April 2, 2018, July 3, 2018, October 1, 2018 and January 2, 2019, respectively.

The Series F Preferred stock is entitled to receive, and the Company will pay, dividends on shares of Series F Preferred Stock equal (on an as-converted basis) to and in the same form as dividends actually paid on shares of common stock of the Company, when, as and if such dividends are paid on shares of the common stock.

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides information as of December 31, 2018 with respect to the shares of our common stock that may be issued under our existing equity compensation plans:

	(1)
	Number of securities to be issued upon exercise of outstanding options, warrants and rights or vesting of restricted stock units  (column - a)		Weighted- average exercise price of outstanding options, warrants and rights or vesting of restricted stock units (column - b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (column - c)
2015 - Equity compensation plan approved by security holders	233,034	(2)	$	—	2,280,701
Total	233,034		$	—	2,280,701

(1) This amount reflects restricted stock units granted under our 2015 Equity Incentive Plan.

(2) All restricted stock units have no exercise price. Total includes both unvested and vested but not yet settled restricted stock units.

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Performance Graph

The following graph shows a comparison of the five-year total cumulative returns of an investment of $100 in cash on December 31, 2013 in (i) our common stock, (ii) the Nasdaq Composite Index, (iii) S&P 500, and (iv) the Dow Jones U.S. Gambling Index. All values assume reinvestment of the full amount of all dividends (to date, we have not declared any dividends).

This stock performance graph will not be deemed “filed” with the SEC or subject to Section 18 of the Securities Exchange Act, nor will it be deemed incorporated by reference in any of our filings under the Securities Act of 1933, as amended (the “Securities Act”).

Comparison of $100 invested on December 31, 2013 in Empire common stock or in the indexes listed below, including reinvestment of dividends:

	Period Ending
	12/31/2013	12/31/2014	12/31/2015	12/31/2016	12/31/2017	12/31/2018
Empire Resorts Inc.	$100.00	$160.33	$74.38	$94.01	$111.57	$41.86
S&P 500	$100.00	$111.39	$110.58	$121.13	$144.65	$135.63
Dow Jones U.S. Gambling Index	$100.00	$79.20	$58.67	$72.87	$99.17	$66.80
Nasdaq Composite Index	$100.00	$113.40	$119.89	$128.89	$165.29	$158.87

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Item 6. Selected Financial Data

The following table presents our selected consolidated financial data for the five most recent fiscal years, which is derived from our audited consolidated financial statements and the notes to those statements. Because the data in this table does not provide all of the data contained in our consolidated financial statements, including the related notes, you should read "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements, including the related notes, contained elsewhere in this document and other data we have filed with the U.S. Securities and Exchange Commission.

	Fiscal Year Ended December 31, (amounts in thousands, except per share data):
	2018		2017		2016		2015		2014
Statement of Operations
Revenues:
Gaming	$156,546		$60,540		$59,633		$60,463		$59,831
Racing	5,335		5,820		5,957		6,177		4,684
Food and beverage	20,056		2,560		3,571		3,893		3,981
Room	7,345		—		—		—		—
Other	5,563		973		1,140		1,101		1,018
Gross revenues	194,845		69,893		70,301		71,634		69,514
Less: Promotional allowances	—		(4,042	)	(2,847	)	(3,468	)	(4,288	)
Net revenues	194,845		65,851		67,454		68,166		65,226
Total operating costs and expenses	283,909		95,768		91,137		102,126		79,912
Loss from operations	(89,064	)	(29,917	)	(23,683	)	(33,960	)	(14,686	)
Other expense	(561	)	—		—		—		—
Interest expense	(49,835	)	(19,269	)	(524	)	(2,643	)	(9,219	)
Interest income	873		2,842		10		—		—
Loss before income taxes	(138,587	)	(46,344	)	(24,197	)	(36,603	)	(23,905	)
Income tax provision	109		—		—		7		7
Net loss	(138,696	)	(46,344	)	(24,197	)	(36,610	)	(23,912	)
Dividends on preferred stock	(128	)	(128	)	(168	)	(178	)	(188	)
Net loss applicable to common stockholders	$(138,824)		$(46,472)		$(24,365)		$(36,788)		$(24,100)
Weighted average common shares outstanding:
Basic	32,882		30,981		28,221		10,749		9,286
Diluted	32,882		30,981		28,221		10,749		9,286
Loss per common share:
Basic	$(4.22)		$(1.50)		$(0.86)		$(3.42)		$(2.60)
Diluted	$(4.22)		$(1.50)		$(0.86)		$(3.42)		$(2.60)

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	Fiscal Year Ended December 31, (amounts in thousands, except per share data):
	2018		2017		2016		2015		2014
Other Data:
Net cash provided by / (used in):
Operating activities	$(66,698)		$(34,304)		$(13,189)		$(31,380)		$(15,492)
Investing activities, including capital costs	(76,089	)	(416,722	)	(225,279	)	(20,298	)	(1,549	)
Financing activities	139,482		465,607		253,717		51,655		15,950
Capital expenditures	(1,012	)	(2,007	)	(1,974	)	(767	)	(1,542	)
Capitalized Development Projects costs	(204,524	)	(300,277	)	(157,305	)	(4,074	)	—
Balance Sheet Data:
Cash and cash equivalents	$28,338		$10,380		$11,012		$6,412		$6,435
Total assets	846,426		832,238		339,758		65,418		39,867
Total long-term debt, net of debt issuance costs	495,693		455,148		—		17,426		17,426
Series E Preferred Stock payable, including current portion	—		—		—		30,480		30,480
Stockholders' equity/(deficit)	211,839		271,321		279,566		(1,459	)	(17,101	)
Operating Data:
Total number of video gaming machines	1,090		1,110		1,110		1,110		1,110
Total number of video lottery terminals	1,070		1,070		1,070		1,070		1,090
Total number of electronic table games positions	20		40		40		40		20
Total number of slot machines	2,156		—		—		—		—
Total number of table game positions	163		—		—		—		—

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated Financial Statements and Notes thereto appearing elsewhere in this document.

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 is located at the approximately 1,700-acre site of a four-star destination resort (the "Destination Resort") in Sullivan County, New York, approximately 90 miles from New York City. The Destination Resort in which Resorts World Catskills is located also includes a 101-room lifestyle hotel ("The Alder") adjacent to the Casino. The Alder is owned and operated by Empire Resorts Real Estate II, LLC ("ERREII"), a wholly-owned subsidiary of Montreign Operating. Empire Resorts I, LLC ("ERREI"), which is a wholly-owned subsidiary of Montreign Operating, is developing a golf course (the "Golf Course Project" and, together with the Casino and The Alder, the "Development Projects") at the Destination Resort.

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. The Company recently announced that VGM operations and food and beverage service at Monticello Casino and Raceway will cease on or about April 23, 2019. 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.

Off-Balance Sheet Arrangements

None.

Critical Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and judgments related to the application of certain accounting policies.

While we base our estimates on historical experience, current information and other factors deemed relevant, actual results could differ from those estimates. We consider accounting estimates to be critical to our reported financial results if (i) the accounting estimate requires us to make assumptions about matters that are uncertain and (ii) different estimates that we reasonably could have used for the accounting estimate in the current period, or changes in the accounting estimate that are reasonably likely to occur from period to period, would have a material impact on our financial statements.

We consider our policies for revenue recognition to be critical due to the continuously evolving standards and industry practice related to revenue recognition, changes which could materially impact the way we report revenues. Accounting polices related to: accounts receivable, impairment of long-lived assets, stock-based compensation, fair value and income taxes are also considered to be critical as these policies involve considerable subjective judgment and estimation by management. Critical accounting policies, and our procedures related to these policies, are described in detail below.

Revenue recognition and Promotional allowances

Gaming revenue is the net difference between gaming wagers and payouts for prizes, non-subsidized free play and accruals related to the anticipated payout of progressive jackpots. Progressive jackpots contain base jackpots that increase at a progressive rate based on the credits played and are charged to revenue as the amount of the jackpots increase. The Company recognizes gaming revenues before deductions of such related expenses as NYSGC share of VGM revenue and the Monticello Harness Horsemen’s Association (the “MHHA”) and Agriculture and New York State Horse Breeding Development Fund’s contractually required shares of revenue.

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Food, beverage, room, racing, retail, entertainment and other services are recognized at the time such service is performed or delivered (i.e., for food and retail revenue). Racing revenue is generally pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks. We recognize racing revenues before deductions of such related expenses as purses, stakes and awards. Some elements of the racing revenues from Off-Track Betting Corporations are recognized as collected, due to uncertainty of receipt of and timing of payments.

Net revenues are recognized net of certain sales incentives in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Certification (“ASC”) 606, “Revenue from Contracts with Customers”.

Prior to January 1, 2018, the Company operated a promotional program without patron membership fees. The retail value of complimentary food, beverages and other items provided to our guests was included in gross revenues and then deducted as promotional allowances to arrive at net revenues. The estimated cost of providing such food, beverage, room, retail, entertainment and other items was included in gaming, food, beverage, room, racing and other expenses. In addition, promotional costs including non-subsidized free play offered to the Company's guests based on their relative gaming worth and prizes included in certain promotional marketing programs was included in marketing expenses.

Subsequent to the adoption of ASC 606 on January 1, 2018, 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.

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.

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

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liabilities are included in “Accrued expenses and other accrued liabilities” in our unaudited condensed consolidated balance sheets.

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 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.

Accounts receivable

Accounts receivable, net of allowances, are stated at the amount we expect to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectability 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 collectability. In the normal course of business, the Company settles wagers for other racetracks and are exposed to credit risk. These wagers 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.

Impairment of long-lived assets

The Company periodically reviews the carrying value of our long-lived assets in relation to historical results, as well as management’s best estimate of future trends, events and overall business climate. If such reviews indicate an issue as to whether the carrying value of such assets may not be recoverable, the Company will then estimate the future cash flows generated by such assets (undiscounted and without interest charges). If such future cash flows are insufficient to recover the carrying amount of the assets, then impairment is triggered and the carrying value of any impaired assets would then be reduced to fair value.

Stock-based compensation

The cost of all stock-based awards to employees, including grants of employee stock options, restricted stock and restricted stock units ("RSUs"), 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 our common stock on the date of grant. The fair value of stock-based awards is recognized as stock-based compensation expense on a straight-line basis over the requisite service period from the date of grant.

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 FASB, for our financial assets and liabilities that had not been previously carried at fair value. The Company's financial instruments are comprised of current assets, restricted cash and investments, Interest Rate Cap, current liabilities and long-term loans. Current assets and current liabilities approximate fair value due to their short-term nature.

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Results of Operations - Fiscal 2018 Compared to Fiscal 2017

The results of operations for the years ended December 31, 2018 and 2017 are summarized below (dollars in thousands):

	2018		2017		Variance $		Variance %
Revenues:
Gaming	$156,546		$60,540		$96,006		158.6	%
Racing	5,335		5,820		(485	)	(8.3	)%
Food and beverage	20,056		2,560		17,496		683.4	%
Room	7,345		—		7,345
Other	5,563		973		4,590		471.7	%
Gross revenues	194,845		69,893		124,952		178.8	%
Less: Promotional allowances	—		(4,042	)	4,042		(100.0	)%
Net revenues	194,845		65,851		128,994		195.9	%
Operating costs and expenses:
Gaming	126,186		44,486		81,700		183.7	%
Racing	8,049		5,229		2,820		53.9	%
Food and beverage	25,453		4,221		21,232		503.0	%
Room	8,161		—		8,161
Other	191		259		(68	)	(26.3	)%
Selling, general and administrative	68,518		18,498		50,020		270.4	%
Development Projects	12,574		21,558		(8,984	)	(41.7	)%
Amortization of gaming license	5,784		—		5,784
Depreciation	28,993		1,517		27,476		N.M.
Total operating costs and expenses	283,909		95,768		188,141		196.5	%
Loss from operations	(89,064	)	(29,917	)	(59,147	)	197.7	%
Other expense	(561	)	—		—		N.M.
Interest expense	(49,835	)	(19,269	)	(30,566	)	158.6	%
Interest income	873		2,842		(1,969	)	(69.3	)%
Loss before income taxes	(138,587	)	(46,344	)	(92,243	)	199.0	%
Income tax provision	109		—		109
Net loss	$(138,696)		$(46,344)		$(92,352)		199.3	%

Gaming Revenues and Expenses

Gaming revenues increased by $96.0 million, or 158.6%, for the 12 months ended December 31, 2018 ("fiscal 2018") as compared to the 12 months ended December 31, 2017 ("fiscal 2017"), from $60.5 million to $156.5 million. The increase in gaming revenues was primarily due to revenues generated by the Casino, which generated $178.2 million in gross gaming revenue in fiscal 2018. Monticello Casino and Raceway ("MCR") generated $32.5 million in gross gaming revenue during fiscal 2018 as compared to $60.5 million for the fiscal 2017 period. The decrease in gaming revenue at MCR was primarily due to decreased visits by gaming patrons to MCR relating to the opening of the Casino, which is proximate to MCR. The Company recorded $57.4 million of complimentary revenue reclassifications during fiscal 2018, primarily due to the increase in business at the Casino during fiscal 2018, as a result of the disclosure changes due to the implementation of ASC 606.

Gaming expenses increased $81.7 million, or 183.7%, for the fiscal 2018 period as compared to the fiscal 2017 period, from $44.5 million to $126.2 million. The increase in gaming expenses was primarily due to expenses generated by the Casino, which includes gaming taxes and payroll expenses, partially offset by an increase in the commission rate associated with operations at MCR. 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.

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Racing Revenues and Expenses

Racing revenues decreased approximately $0.5 million, or 8.3%, for the fiscal 2018 period as compared to the fiscal 2017 period, from $5.8 million to $5.3 million. The decrease in racing revenues is primarily due to a decrease in revenues from regional OTBs for racing as compared to the fiscal 2017 period. Racing expenses increased $2.8 million, or 53.9%, for the fiscal 2018 period as compared to the fiscal 2017 period, from $5.2 million to $8.0 million. The increase in racing expenses of $2.8 million is primarily due to larger purse contributions and higher fees required by regulation to be paid by the Company as a result of the Casino opening.

Food and BeverageRevenues and Expenses

Food and beverage revenues increased approximately $17.5 million, or 683.4%, for the fiscal 2018 period as compared to the fiscal 2017 period, from approximately $2.6 million to $20.1 million due to the opening of the new food venues at the Casino. Food and beverage expenses increased $21.2 million, or 503.0% for the fiscal 2018 period as compared to the fiscal 2017 period, from $4.2 million to $25.5 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.

Room Revenues and Expenses

The Casino generated approximately $7.3 million in room revenue for the fiscal 2018 period due to the Casino opening. We incurred room expenses of approximately $8.2 million, which is primarily due to payroll and benefit expenses.

Other Revenues and Expenses

Other revenues consist primarily of ATM revenues at the Casino, as well as retail sales and commissions from the sale of lottery tickets. Other revenues increased by approximately $4.6 million, or 471.7%, during the fiscal 2018 period as compared to the fiscal 2017 period, from approximately $1.0 million to approximately $5.6 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 $0.1 million, or 26.3%, during the fiscal 2018 period as compared to the fiscal 2017 period, from approximately $0.3 million to approximately $0.2 million, due to the reduction of staffing at Monticello Casino and Raceway.    

Selling General and Administrative (“SG&A”)

SG&A expenses increased $50.0 million, or 270.4%, for the fiscal 2018 period as compared to the fiscal 2017 period, from $18.5 million to $68.5 million. The increase in SG&A expenses is primarily due to an increase in payroll and benefits, insurance, marketing and a license fee, in connection with the use of the Resorts World brand relating to the Casino.

Development Projects Expenses

Development Projects expenses decreased by $9.0 million, or 41.7%, for the fiscal 2018 period as compared to the fiscal 2017 period, from $21.6 million to $12.6 million. The decrease was primarily due to the Casino opening in February 2018, at which time costs associated with the Casino ceased to be capitalized. The Casino opened to the public on February 8, 2018 and the penthouse suites at the Casino, along with The Alder, were substantially completed on January 1, 2019. The Golf Course Project is under development. Costs associated with these Development Projects are primarily capitalized and will be included in Capitalized Development Projects Costs on the consolidated balance sheet until the project is completed.

Interest expense

Interest expense increased $30.6 million, or 158.6%, for the fiscal 2018 period as compared to the fiscal 2017 period, from $19.3 million to $49.8 million. The increase in interest expense was primarily due to increased borrowings under the Term Loan Facility in fiscal 2018 to finance the substantial completion of the Casino and The Alder projects and the reduction to capitalized interest expense for the fiscal 2018 period as compared to the fiscal 2017 period due to the opening of the Casino. Upon the opening of the Casino, interest expense for the Term Loan Facility associated with the construction of the Casino could no longer be capitalized.

Interest income

Interest income decreased approximately $2.0 million, or 69.3%, for the fiscal 2018 period as compared to the fiscal 2017 period, from $2.8 million to $0.9 million. The decrease in interest income is due to the reduction in unused proceeds of the Term Loan Facility invested in restricted cash and investments for Development Projects during the fiscal 2018 period as such funds were used to support the construction of the Development Projects.

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Results of Operations - Fiscal 2017 Compared to Fiscal 2016

The results of operations for the years ended December 31, 2017 and 2016 are summarized below (dollars in the table in thousands):

	2017		2016		Variance $		Variance %
Revenues:
Gaming	$60,540		$59,633		$907		2	%
Racing	5,820		5,957		(137	)	(2	)%
Food and beverage	2,560		3,571		(1,011	)	(28	)%
Other	973		1,140		(167	)	(15	)%
Gross revenues	69,893		70,301		(408	)	(1	)%
Less: Promotional allowances	(4,042	)	(2,847	)	(1,195	)	42	%
Net revenues	65,851		67,454		(1,603	)	(2	)%
Operating costs and expenses:
Gaming	44,486		44,238		248		1	%
Racing	5,229		5,174		55		1	%
Food and beverage	4,221		4,732		(511	)	(11	)%
Other	259		268		(9	)	(3	)%
Selling, general and administrative	18,498		22,414		(3,916	)	(17	)%
Development Projects	21,558		12,970		8,588		66	%
Depreciation	1,517		1,341		176		13	%
Total operating costs and expenses	95,768		91,137		4,631		5	%
Loss from operations	(29,917	)	(23,683	)	(6,234	)	26	%
Interest expense	(19,269	)	(524	)	(18,745	)	N.M.
Interest income	2,842		10		2,832		N.M.
Loss before income taxes	(46,344	)	(24,197	)	(22,147	)	92	%
Income tax provision	—		—		—
Net loss	$(46,344)		$(24,197)		$(22,147)		92	%

Gaming revenue

Gaming revenue increased by approximately $0.9 million, or 2%, for the fiscal 2017 period as compared to the 12 months ended December 31, 2016 ("fiscal 2016"), from $59.6 million to $60.5 million. The increase in non-subsidized free play of $1.7 million, was a primary driver for the revenue increase. Handle decreased by approximately $10.1 million, or 1.1%, for the same period. The average daily win per unit decreased from $147.05 in fiscal 2016 to $143.11 in fiscal 2017. VGM hold percentage remained unchanged at 6.4% in fiscal 2017 versus fiscal 2016. The severe weather during the first quarter of the fiscal 2017 period significantly impacted gaming revenue. During the second and third quarters of the fiscal 2017 period, we made a concentrated effort to reduce our marketing to lower-tier unprofitable player segments and we increased our marketing efforts to attract mid- and high-level tier players. While this results in lower overall win due to fewer players, it generally increases overall player profitability. During fiscal 2017, the Company recorded $4.0 million for the cost of promotional allowances associated with the complimentary promotional benefits granted to gaming patrons.

Racing revenue

Racing revenue decreased by $0.1 million in fiscal 2017 as compared to fiscal 2016. The decrease in racing revenue was primarily due to a decrease in the horse population and the number of available drivers during fiscal 2017, resulting in fewer races.

Food and beverage revenue

Food and beverage revenue decreased by $1.0 million in the fiscal 2017 period as compared to the fiscal 2016 period. During the fourth quarter of the fiscal 2016 period, the Company renovated the Terrace Room, which was closed from November 5 through December 19, 2016. The Terrace Room reopened as the Upper Deck, an a la carte restaurant on December 19, 2016.

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The Company closed the buffet restaurant at MCR on December 19, 2016. The Company opened a new sports bar, named the Press Box, in May 2017. Although the sports bar increased revenue volumes late in the fiscal 2017 period, it did not offset the loss in revenue from the buffet closure. These changes, along with the business disruption during the construction period, caused the reduction in food and beverage revenues at MCR during the fiscal 2017 period as compared to the fiscal 2016 period.

Other revenue

Other revenue decreased by approximately $0.2 million in the fiscal 2017 period as compared to the fiscal 2016 period, primarily due to a decrease in ATM revenue and an increase in fixed asset disposals in the fiscal 2017 period.

Promotional allowances

Promotional allowances increased by $1.2 million, or 42%, in the fiscal 2017 period as compared to the fiscal 2016 period, from $2.8 million to $4.0 million. Non-subsidized free play (free play subject to NYSGC and other commissions) increased approximately $1.7 million. Coupons, discounts and promotions decreased by $0.5 million in the fiscal 2017 period due to the reduction in promotional activity after closing of the buffet and renovation of the Terrace Room at MCR. Players club awards decreased by $0.1 million in the fiscal 2017 period as compared to the fiscal 2016 period.

Gaming expenses

Gaming expenses increased by approximately $0.2 million, or 1%, in fiscal 2017 as compared to fiscal 2016, from $44.2 million to $44.5 million, primarily due to higher NYSGC and other commissions of approximately $0.5 million, resulting from higher gaming revenue. Partially offsetting these increases were decreases in gaming wages and related benefits of approximately $0.2 million as compared to fiscal 2016, primarily due to lower payroll related expenses. Other gaming expenses decreased by approximately $0.1 million, primarily due to lower utilities expenses.

Food, beverage, racing and other expenses

Food, beverage, racing and other expenses decreased approximately $0.5 million, or 5%, in the fiscal 2017 period as compared to the fiscal 2016 period, from $10.2 million to $9.7 million. The decrease was primarily caused by the decrease in cost of sales of approximately $0.5 million in the fiscal 2017 period as compared to the fiscal 2016 period, caused by lower food and beverage revenues resulting from the buffet closure at MCR. Additionally, purses were $52,000 lower than the fiscal 2016 period due to fewer races. Repairs and maintenance expenses were $41,000 lower than the fiscal 2016 period. Partially offsetting these decreases was an increase of $81,000 in racing expenses due to New York State mandated horse drug testing.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased approximately $3.9 million, or 17%, in the fiscal 2017 period as compared to the fiscal 2016 period, from $22.4 million to $18.5 million. This decrease is primarily due to the decrease in legal fees by approximately $1.0 million, attributable to higher legal fees incurred in the fiscal 2016 period related to financing efforts for the Development Projects. Additionally, a $0.8 million charge was recorded in the fourth quarter of the fiscal 2016 period related to a contingent matter which was settled in the first quarter of the fiscal 2017 period. Other professional service fees decreased in the fiscal 2017 period by approximately $2.0 million primarily due to decreased lobbying expenses in the fiscal 2017 period. Consulting fees decreased by approximately $0.8 million in the fiscal 2017 period, primarily due to costs incurred in the fiscal 2016 period for financing efforts related to the Development Projects that were not consummated. Director fees decreased $0.4 million in the fiscal 2017 period, due to the creation of the Executive Chairman position in the fiscal 2016 period. These savings were partially offset by increases in payroll and related payroll benefits of $0.6 million, due to the increase in staffing during the fiscal 2017 period and the impact of the full year annual salary for the Executive Chairman position. Real estate taxes increased $0.3 million in the fiscal 2017 period, due to the phase out of the Empire Zone Tax Credit. Insurance expense increased $0.2 million in the fiscal 2017 period, primarily due to higher director and officer insurance premiums.

Development Projects expenses

Development projects expenses increased by $8.6 million, or 66%, in the fiscal 2017 period as compared to the fiscal 2016 period, from approximately $13.0 million to $21.6 million. Payroll and related benefits costs increased $4.1 million in the fiscal 2017 period, as the Company hired the management team and staff for the Casino, primarily during latter part of the fiscal 2017 period. Bank fees increased approximately $2.0 million, due to fees associated with the Term Loan Facility. Marketing expenses increased $0.9 million, due to efforts to increase branding. Professional fees increased $0.5 million, primarily due to higher

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lobbying and consulting fees. Land lease and rents increased $0.4 million as compared to the fiscal 2016 period, and real estate taxes increased $0.2 million, primarily due to higher assessed valuations for the property on which Monticello Casino and Raceway is located. Other development expenses increased approximately $0.9 million, due to pre-opening expenses incurred in preparation for the Casino opening.

Interest expense

Interest expense increased $18.7 million in fiscal 2017 as compared to the fiscal 2016 period, from $0.5 million to approximately $19.3 million. The increase in interest expense was primarily due to borrowing under the Term B Loan and the Kien Huat Montreign Loan and is inclusive of $2.1 million of amortized debt issuance costs.

Interest income

Interest income increased approximately $2.8 million in the fiscal 2017 period as compared to the fiscal 2016 period. The increase in interest income is due to interest received on the investment of unused restricted cash and investments for Development Projects.

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 flow from operations, borrowings from banks and proceeds from the issuance of debt and equity securities. The Company anticipates that its current cash and cash generated from operations, as well as the remaining net proceeds of the Term Loan Facility and equity financing available under the 2018 Kien Huat Preferred Stock Commitment Letter, which are discussed below, will be sufficient to meet our working capital requirements, the expected costs of the Development Projects and our anticipated debt service requirements for the next 12 months. 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” of this Annual Report on Form 10‑K for a discussion of the risks related to our liquidity and capital structure.

Cash Flows

Net cash used in operating activities was approximately $66.7 million, $34.3 million and $13.2 million during the fiscal 2018, 2017 and 2016 periods, respectively. We continue to generate net losses and negative cash flows from operating activities, due to the pre-opening expenses we are incurring related to the Development Projects as well as increased costs related to the operation of the Casino. We incurred $12.6 million, $21.6 million and $13.0 million of Development Projects costs during the fiscal 2018, 2017 and 2016 periods, respectively. Operating activity for the fiscal 2018 period was significantly impacted by the opening of the Casino in February 2018. Due to the ongoing ramp up of operations at the Casino, along with continued efforts to supplement and develop managerial and operational staffing, the Company's operating losses of $138.7 million for the fiscal 2018 period were significant. Interest expense increased to $49.8 million for the fiscal 2018 period as compared to $19.3 million for the 2017 fiscal period. Operating activity for the fiscal 2018 period benefited from the reduction in Casino development expenses of $9.0 million. Our operating cash flows in fiscal 2018 were negatively impacted by severe weather during the first quarter that caused a reduction from expected revenues. The decrease in cash flow in fiscal 2018 was primarily due to the operating losses incurred by the Company and was partially offset by the increase in financing activities as the Company completed the Development Project financing totaling $115.0 million and obtained additional working capital from the $29.6 million bet365 equity investment and $11.9 million from the Series F Preferred Stock issuance.

We have had continuing net losses and negative cash flow from operating activities, including a loss from operations of $138.7 million in the fiscal 2018 period. The net loss in the fiscal 2018 period was inclusive of Development Projects costs of $12.6 million and interest expense of $48.9 million in the fiscal 2018 period.

Net cash used in investing activities was approximately $76.1 million, $416.7 million and $225.3 million during the fiscal 2018, 2017 and 2016 periods, respectively. The decrease in net cash used in the fiscal 2018 period was primarily due to spending for Capitalized Development Projects costs of $204.5 million for the fiscal 2018 period and was partially offset by the reduction of $94.5 million of investments for Development Project Costs and a refund of $35 million in cash collateral bonds required to be posted in the fiscal 2017 and 2016 periods, respectively. The increase in the fiscal 2017 period over the fiscal 2016 period was due primarily to a greater usage of restricted cash and investments for the Development Projects and higher capitalized Development

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Project costs of $94.5 million and $300.3 million, respectively. In the fiscal 2017 period, we made a $20.0 million payment for the cash collateral bond required for the construction of the Casino by the NYSGC. In the fiscal 2016 period, we made a payment of $15.0 million for the cash collateral bond and $51.0 million for the Gaming Facility License. At December 31, 2017, our total assets included restricted cash and investments for the Development Projects of $110.0 million. At December 31, 2018, our total assets included approximately $21.0 million of restricted cash for the Development Projects.

Net cash provided by financing activities was approximately $139.5 million, $465.6 million and $253.7 million during the fiscal 2018, 2017 and 2016 periods, respectively. In the fiscal 2018 period, approximately $70.0 million was borrowed under the Term A Loan, $15.0 million was borrowed under the Revolving Credit Facility, $4.0 million was borrowed under the Bangkok Bank Loan and $30 million was borrowed under the Kien Huat Subordinate Loan. In November 2018, the Company issued $12.0 million of Series F preferred stock to Kien Huat Realty III Limited ("Kien Huat") and approximately $33.9 million of shares of common stock to bet365 Investor. The Company repaid $10.7 million of obligations due under the equipment loans and repaid $8.6 million of obligations due under the Term Loan Facility during the fiscal 2018 period.

In the fiscal 2017 period, approximately $441.9 million, net of discount, was borrowed under the Term B Loan and an additional $32.0 million was borrowed under the Kien Huat Montreign Loan. These amounts were partially offset by payments of $23.9 million of debt issuance costs and Interest Rate Cap fees. Furthermore, approximately $16.0 million was borrowed pursuant to the Bangkok Bank Loan in the fiscal 2017 period. In connection with the Bangkok Bank Loan, the Kien Huat Montreign Loan was exchanged for shares of common stock in full satisfaction of such loan in the fiscal 2017 period. During the fiscal 2016 period, approximately $286.0 million was received from the January 2016 Rights Offering, which was net of approximately $4.0 million of expenses, and $30.7 million of such proceeds was used to redeem the Series E Preferred Stock. At December 31, 2018, the Company had $20.4 million of equipment loans outstanding for the purchase of slot machines, equipment and software for the Casino.

Development Project Expenditures

The Company expects the Development Projects will cost approximately $928 million, which includes $765 million of anticipated costs for construction of the Development Projects, $68 million for interest expenses, $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 Alder in March 2018 after signing a guaranteed maximum price agreement with its construction manager, which was amended to $35.2 million in December 2018. During the fall of 2018, the Company signed a contractor agreement for the Golf Course Project for a total cost of approximately $21.2 million.

As of December 31, 2018, the Company has incurred an aggregate total of $867.3 million related to the Development Projects, including $704.7 million of capitalized Development Projects costs, of which approximately $699.0 million was reclassified to property and equipment upon the opening of the Casino and The Alder, $67.6 million of interest expense related to bank debt for the Development Projects, $51.0 million for the Gaming Facility License and incurred $44.0 million of debt issuance costs related to the Development Projects.

Principal Debt Arrangements

Term Loan Agreement

On January 24, 2017, Montreign Operating entered into the Building Term Loan Agreement (the “Original 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. On May 26, 2017, the parties entered into the first amendment to the Term Loan Agreement and certain ancillary agreements (the “Amended Term Loan Agreement” and, together with the Original Term Loan Agreement, the “Term Loan Agreement”). In the aggregate, the Term Loan Agreement provides Montreign Operating with loans in principal amount of $520 million (the “Term Loan Facility”). The borrowings under the Term Loan Facility are being used to fund the costs of the Development Projects.

The Term Loan Agreement provides Montreign Operating with senior secured first lien term loans consisting of $70 million of Term A Loans and $450 million of Term B Loans. The obligations of Montreign Operating under the Term Loan Facility are guaranteed by the Project Parties and are secured by security interests in substantially all of the assets of the Project Parties, as well as by a pledge of the membership interests in Montreign Operating. In connection with the Term Loan Facility, Empire provided a completion guaranty capped at $30 million on the completion of construction of the Casino and The Alder. 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. Interest accrues on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a

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LIBOR floor of 1%) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. As of December 31, 2018, $64.8 million was currently outstanding under the Term A Loan and $446.6 million was outstanding under the Term B Loan.

As a condition to the Term Loan Agreement, the net proceeds from the Term Loan Facility and the Kien Huat Montreign Loan, which is discussed below, were deposited into an account controlled by the lenders under the Term Loan Facility. The Company further funded this lender-controlled account with approximately $9.9 million in the fiscal 2017 period pursuant to the Term Loan Agreement from the proceeds of the Bangkok Bank Loan, which is discussed below. In order to access the funds (including the net proceeds from the Term Loan Facility and the Kien Huat Montreign Loan) held in these lender-controlled accounts, Montreign Operating had to satisfy the applicable disbursement conditions set forth in the Term Loan Agreement and ancillary agreements, such as providing evidence that the withdrawn funds are used for permitted purposes in connection with the Development Projects.

The Term Loan Agreement restricts the Project Parties from incurring additional indebtedness except for, among other things, obligations pursuant to hedging agreements required under the Term Loan Agreement, capital lease obligations and purchase money indebtedness (including FF&E financing) in an amount not exceeding $40 million, subordinated indebtedness so long as the proceeds are applied pursuant to the terms of the Term Loan Agreement and other indebtedness not exceeding $10 million. Also, the Project Parties may not make any dividend or other distribution, redeem or otherwise acquire any equity securities or subordinated indebtedness. Moreover, the Project Projects are restricted from entering into advisory, management or consulting agreements with an affiliate of any Project Party, 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 contains representations and warranties, customary events of default, and affirmative, negative and financial covenants, including that the Company maintain compliance with a maximum first lien net leverage ratio not to exceed 5.00:1.00, a minimum interest coverage ratio not to exceed 2.00:1.00 and a consolidated capital expenditure covenant not to exceed $10 million of eligible expenses in any calendar year. In addition, the Company is allowed to add back pro forma EBITDA in the amount of $108.4 million, $77.5 million and $39.4 million, respectively, in each of the first three testing quarters, respectively. These financial covenants will be applicable beginning with the first fiscal quarter following the "full opening" of the Casino, as such term is defined in the Term Loan Agreement. Additionally, excess cash flow, as such term is defined in the Term Loan Agreement, must be applied towards repayment of the Term Loan Facility commencing with the fiscal year in which the "full opening" of the Casino occurs. At December 31, 2018, Montreign Operating was in compliance with all the required financial covenants.

In March 2018, the Company contributed $3.6 million to an interest reserve fund under the Term Loan Agreement. This contribution reflects the additional interest paid on the Term Loan Facility, as a result of the Company's deferral of the completion of 15 VIP suites at the Casino from March 1, 2018 to March 30, 2018.

Revolving Credit Agreement

On January 24, 2017, Montreign Operating also entered into a revolving credit agreement, which was subsequently amended on May 24, 2017 and December 7, 2017 (as amended, the “Revolving Credit Agreement”) among Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent. The Revolving Credit Agreement 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) (the “Revolving Credit Facility”), the proceeds of which may be used for working capital needs, capital expenditures and other general corporate purposes following the initial opening of the Casino to the public. Interest will accrue on outstanding borrowings at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. The Revolving Credit Facility will mature on January 24, 2022. At December 31, 2018, the Revolving Credit Facility was fully drawn.

Kien Huat Montreign Loan Agreement and Kien Huat Note Exchange Agreement

On January 24, 2017, Kien Huat and Montreign Holding entered into a loan agreement (the “Kien Huat Montreign Loan Agreement”), pursuant to which Montreign Holding obtained from Kien Huat a loan in the principal amount of $32.3 million (the "Kien Huat Montreign Loan"), the net proceeds of which were used as a capital contribution to Montreign Operating for use towards the expenses of the Development Projects. The obligations of Montreign Holding under the Kien Huat Montreign Loan Agreement were secured by a pledge of all the membership interests of Montreign Holding by Empire.

Concurrently with and as a condition to the closing of the Bangkok Bank Loan Agreement, which is discussed below, on December 28, 2017, Empire, Montreign Holding, and Kien Huat entered into a note exchange agreement (the “Kien Huat Note

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Exchange Agreement”). The Kien Huat Note Exchange Agreement provided for the issuance of 1,379,873 shares of common stock (the “Exchange Shares”) to Kien Huat in full satisfaction of the Kien Huat Montreign Loan. On December 28, 2017, total indebtedness outstanding under the Kien Huat Montreign Loan was $36.2 million. Such total indebtedness outstanding under the Kien Huat Montreign Loan was exchanged for the Exchange Shares at an exchange rate of $26.21, which exchange rate represents the volume-weighted average price of the Company’s common stock for the 30-day period immediately preceding the date on which the Kien Huat Note Exchange Agreement was executed. In connection with the satisfaction in full of the Kien Huat Montreign Loan pursuant to the Kien Huat Note Exchange Agreement, Empire's pledge of its membership interests in Montreign Holding was released. The Exchange Shares were issued pursuant to an exemption from the registration requirement of the Securities Act provided in Section 4(a)(2) of the Securities Act.

Bangkok Bank Loan Agreement

On December 28, 2017, the Company entered into a Delayed Draw Term Loan Credit Agreement (the “Bangkok Bank Loan Agreement”) with Bangkok Bank PCL, New York Branch (“Bangkok Bank”), as lender, and MRMI, 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 “Bangkok Bank Loan”).

Interest accrues on outstanding borrowings under the Bangkok Bank Loan Agreement at a rate equal to LIBOR plus 6.25%, or an alternate base rate plus 5.25% per annum. In addition, the Company paid 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. The Bangkok Bank Loan will mature on December 28, 2019. 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 covenants, negative covenants 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.

The Company borrowed $16 million at the closing of the Bangkok Bank Loan, on December 28, 2017. Of this amount, the Company contributed approximately $9.9 million to Montreign Operating pursuant to the terms of the Term Loan Agreement, as discussed above. The Company subsequently borrowed an additional $2 million on each of September 4, 2018 and November 7, 2018 for the general corporate purposes of the Company. As of December 31, 2018, the Bangkok Bank Loan was fully drawn.

Kien Huat Backstop Loan Agreement

Concurrently with and as a condition to the closing of the Bangkok Bank 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 (the “Kien Huat Backstop Loan”). Any amounts borrowed under the Kien Huat Backstop Loan 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 (the “Backstop Maturity Date”). As of December 31, 2018, no amounts had been borrowed under the Kien Huat Backstop 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 amount financed was $31.1 million and the terms of these agreements run between six and 36 months. The balances outstanding at December 31, 2018 and 2017 were $20.4 million and $31.1 million, respectively. 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 zero percent, using the Company's cost of funds rate of approximately 10%. The weighted average of the monthly repayments is approximately $1.0 million.

Equity Financings

2018 Kien Huat Preferred Stock Commitment Letter

On November 6, 2018, the Company and Kien Huat entered into a commitment letter (as amended and restated on November 9, 2018, the "2018 Kien Huat 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 2018 Kien Huat Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million (the "Commitment

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Amount") of Series F Preferred Stock on the terms set forth in the 2018 Kien Huat Preferred Stock Commitment Letter. Kien Huat committed to purchase 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. Any future sales to bet365 Investor pursuant to the bet365 Common Stock Purchase Agreement will further reduce the Commitment Amount under the 2018 Kien Huat Preferred Stock Commitment Letter.

    Kien Huat is 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 2018 Kien Huat 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 each of November 13, 2018 and February 20, 2019, the Company and Kien Huat entered into subscription agreements to purchase an aggregate of 320 shares of Series F Preferred Stock for an aggregate purchase price of $32 million and net proceeds to the Company (after deducting a $0.3 million funding fee due to Kien Huat) of $31.7 million.

bet365 Common Stock Purchase Agreement

On November 14, 2018, the Company entered into a sportsbook and digital gaming collaboration agreement (the “Collaboration Agreement”) with Hillside (New York) LLC, an affiliate of bet365 Group Limited (“bet365”). In connection with entering into the Collaboration Agreement, Hillside (New Media Holdings) Limited, an affiliate of bet365 ("bet365 Investor"), and the Company entered into a common stock purchase agreement (the “bet365 Common Stock Purchase Agreement”) pursuant to which bet365 Investor agreed to purchase up to 2.5 million shares of common stock of the Company at a purchase price of $20.00 per share, for an aggregate investment of $50 million.

In accordance with the bet365 Common Stock Purchase Agreement, the bet365 Investor purchased 1,685,759 shares of common stock upon execution of the bet365 Common Stock Purchase Agreement. The offer and sale of these shares was made pursuant to a shelf registration statement on Form S-3 (File No. 333-214119), which became effective on November 17, 2016, pursuant to a base prospectus dated as of November 17, 2016 contained in such registration statement and a prospectus supplement filed with the Securities and Exchange Commission on November 14, 2018. The Company received net proceeds of $33.7 million from the offering, which will be used for the general working capital purposes of the Company.

Pursuant to the bet 365 Common Stock Purchase Agreement, the bet365 Investor will be obligated to purchase the remaining 814,241 shares of common stock at $20.00 per share so long as the conditions set forth in the bet365 Common Stock Purchase Agreement are met.

After all gaming taxes have been paid and the parties have recouped their costs and expenses, bet365 may receive a distribution (the “Preferred Distribution”) equal to 50% of the positive difference, if any (the “delta”), between $20 and the value of the Company’s common stock measured on a given date (such date, the “Trigger Date”), multiplied by the number of shares of common stock then held by bet365 Investor. The Trigger Date is 30 days after the Company’s first filing of an annual or quarterly report with the Securities and Exchange Commission after bet365 recoups its costs incurred pursuant to the Collaboration Agreement. The delta will be the positive difference between $20 and the 30-day volume-weighted average price of the Company’s common stock on the Trigger Date.

The payment of a Preferred Distribution, if any, will defer and may materially adversely affect the amount of profits the Company receives pursuant to the Collaboration Agreement. If bet365 or bet365 Investor do not obtain and maintain the required licenses, permits and approvals, we may never sell the remaining 814,241 shares pursuant to the bet365 Common Stock Purchase Agreement and we may need to repurchase the shares previously purchased by bet365 Investor.

Other Factors Affecting Liquidity

The Company may also 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

45

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. Instruction I.B.6 of Form S-3 imposes a limitation on the maximum amount of securities that we may sell pursuant to the registration statement during any 12-month period to the extent that the aggregate market value of our outstanding common stock held by non-affiliates (our “public float”) as of a day during the 60 days immediately preceding such sale is less than $75 million. As of March 8, 2019, our public float was $73,580,097. If our public float remains below $75 million, then at the time we sell securities pursuant to the registration statement, the amount of securities to be sold plus the amount of any securities we have sold during the prior 12 months in reliance on Instruction I.B.6 may not exceed one-third of our public float as of a day during the 60 days immediately preceding such sale as computed in accordance with Instruction I.B.6. Whether we sell securities under the registration statement will depend on a number of factors, including the market conditions at that time, our cash position at that time and the availability and terms of alternative sources of capital. 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, working capital and for other general corporate purposes. 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.

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

	Payments due by period (in thousands)
	Total	Less than 1 year	1 – 3 years	3 – 5 years	Years 6 - 40
Casino Lease (a)	$377,624	$7,500	$15,500	$16,200	$338,424
Golf Course Lease (b)	8,146	63	300	300	7,483
The Alder Lease (c)	8,292	150	300	300	7,542
Term Loan A (d)	76,880	14,408	28,159	34,313	—
Term Loan B (e)	644,428	53,884	106,404	484,140	—
Equipment Loans (f)	21,735	14,880	6,855	—	—
Bangkok Bank Loan (g)	21,754	21,754	—	—	—
Operating leases (h)	4,098	2,669	1,429	—	—
Revolving Credit Facility (i)	18,563	1,161	2,326	15,076	—
Kien Huat Subordinate Loan (j)	39,725	—	39,725	—	—
Total	$1,221,245	$116,469	$200,998	$550,329	$353,449

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

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(b) Annual fixed rent payments under the Golf Course lease are as follows: (i) $0 prior to the Golf Course Opening Date, which is expected to be in the Summer of 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 Alder Lease are as follows: (i) $0 prior to the Alder Opening Date, which occurred on January 1, 2019; (ii) $150,000 for the first 10 years following the Alder Opening Date; and (iii) $250,000 thereafter for the remainder of the term of the Alder Lease.

(d) The Term A Loan is a variable rate instrument. The payments reflected above include principal amounts and interest payments based on the interest rate at December 31, 2018.

(e) The Term B Loan is a variable rate instrument. The payments reflected above include principal amounts and interest payments based on the interest rate at December 31, 2018.

(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 include interest payments.

(g) The Bangkok Bank Loan is a variable rate instrument. The payments reflected above include principal amounts and interest payments based on the interest rate at December 31, 2018.

(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. The payments reflected above include principal amounts and interest payments based on the interest rate at December 31, 2018.

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

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Market risk is the risk of loss arising from adverse changes in market rates and prices, including interest rates, commodity prices and equity prices. We currently have invested proceeds from the Term A and Term B Loans in money-market bank accounts. At December 31, 2018, these investments totaled approximately $27,000. We believe the short-term nature of these investments limits our exposure to interest rate 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. In addition, the Company had $20 million of delayed draw term loans outstanding at December 31, 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 December 31, 2018, a one-point increase in LIBOR would increase interest expense (prior to interest capitalization) by approximately $4.4 million for the next 12-month period ending December 31, 2018. 

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Item 8. Financial Statements and Supplementary Data.

	Page
Financial Statements as of December 31, 2018 and 2017 and for the three years ended December 31, 2018:
Report of Independent Registered Public Accounting Firm on Financial Statements	50
Report of Independent Registered Public Accounting Firm on Internal Controls over Financial Reporting	51
Consolidated Balance Sheets	53
Consolidated Statements of Operations and Comprehensive Loss	54
Consolidated Statements of Stockholders' Equity/(Deficit)	55
Consolidated Statements of Cash Flows	56
Notes to Consolidated Financial Statements	57

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Empire Resorts, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Empire Resorts, Inc. and subsidiaries (the Company) as of December 31, 2018 and 2017, the related consolidated statements of operations and comprehensive loss, stockholders’ equity/(deficit), and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and the financial statement schedule listed in Item 15 (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated March 15, 2019 expressed an adverse opinion thereon.

Change in Accounting Principles

As discussed in Note B to the consolidated financial statements, the Company has changed its presentation of restricted cash and restricted cash equivalents on the statement of cash flows due to the adoption of ASU 2016-18, Restricted Cash. This change has been applied retrospectively to all periods presented.

As discussed in Note B to the consolidated financial statements, the Company has changed its method for recognizing revenue on January 1, 2018 due to the adoption of ASU Topic 606, Revenue from Contracts with Customers.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 2012.

Philadelphia, Pennsylvania

March 15, 2019

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Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of Empire Resorts, Inc.

Opinion on Internal Control over Financial Reporting

We have audited Empire Resorts, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control- Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, because of the effect of the material weakness described below on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2018, based on the COSO criteria.

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. The following material weakness has been identified and included in management’s assessment.

Management has identified a material weakness in the design and operation of the Company’s review control around the accounting for stock compensation expense.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2018 and 2017, the related consolidate statements of operations and comprehensive loss, stockholders' equity/(deficit) and cash flows for each of the three years ended December 31, 2018, and the related notes and the financial statement schedule listed in Item 15. This material weakness was considered in determining the nature, timing and extent of audit tests applied in our audit of the 2018 (consolidated) financial statements, and this report does not affect our report dated March 15, 2019, which expressed an unqualified opinion thereon.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

51

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

March 15, 2019

52

EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

	December 31,		December 31,
	2018		2017
Assets
Current assets:
Cash and cash equivalents	$28,338		$10,380
Restricted cash	373		693
Accounts receivable, net	5,965		1,273
Inventories	936		174
Prepaid expenses and other current assets	8,026		3,376
Total current assets	43,638		15,896
Property and equipment, net	697,679		26,863
Capitalized Development Projects costs	5,724		566,797
Restricted cash and investments for Development Projects	21,039		136,431
Intangible assets	45,216		51,000
Cash collateral for deposit bond	—		35,000
Other assets	33,130		251
Total assets	$846,426		$832,238
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable	$9,894		$2,686
Current portion of long-term debt	48,004		14,588
Accrued Development Projects costs	4,922		71,712
Accrued expenses and other current liabilities	33,678		7,320
Total current liabilities	96,498		96,306
Long-term loan, related party, net of debt issuance costs	30,954		—
Long-term debt, net of current portion	495,693		455,148
Other long-term liabilities	11,442		9,463
Total liabilities	634,587		560,917
Stockholders’ equity:
Preferred Stock, 5,000,000 shares authorized; $0.01 par value
Series B, $29 per share liquidation value, 44,258 shares issued and outstanding at December 31, 2018 and 2017, respectively	1		—
Series F, redeemable, $20 per share redemption value, 120 shares issued and outstanding as of December 31, 2018, (aggregate liquidation value of $20 as of December 31, 2018)	—		—
Common stock, $0.01 par value, 150,000,000 shares authorized, 34,403,250 and 32,559,617 shares issued and outstanding at December 31, 2018 and 2017, respectively	344		326
Additional paid-in capital	651,623		572,342
Accumulated other comprehensive loss	(219	)	(315	)
Accumulated deficit	(439,910	)	(301,032	)
Total stockholders’ equity	211,839		271,321
Total liabilities and stockholders’ equity	$846,426		$832,238

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

53

EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

YEARS ENDED DECEMBER 31,

(In thousands, except for per share data)

	2018		2017		2016
Revenues:
Gaming	$156,546		$60,540		$59,633
Racing	5,335		5,820		5,957
Food and beverage	20,056		2,560		3,571
Room	7,345		—		—
Other	5,563		973		1,140
Gross revenues	194,845		69,893		70,301
Less: Promotional allowances	—		(4,042	)	(2,847	)
Net revenues	194,845		65,851		67,454
Operating costs and expenses:
Gaming	126,186		44,486		44,238
Racing	8,049		5,229		5,174
Food and beverage	25,453		4,221		4,732
Room	8,161		—		—
Other	191		259		268
Selling, general and administrative	68,518		18,498		22,414
Development Projects	12,574		21,558		12,970
Amortization of gaming license	5,784		—		—
Depreciation	28,993		1,517		1,341
Total operating costs and expenses	283,909		95,768		91,137
Loss from operations	(89,064	)	(29,917	)	(23,683	)
Other expense	(561	)	—		—
Interest expense	(49,835	)	(19,269	)	(524	)
Interest income	873		2,842		10
Loss before income taxes	(138,587	)	(46,344	)	(24,197	)
Income tax provision	109		—		—
Net loss	(138,696	)	(46,344	)	(24,197	)
Dividends on preferred stock	(128	)	(128	)	(168	)
Net loss applicable to common stockholders	$(138,824)		$(46,472)		$(24,365)
Weighted average common shares outstanding:
Basic	32,882		30,981		28,221
Diluted	32,882		30,981		28,221
Loss per common share:
Basic	$(4.22)		$(1.50)		$(0.86)
Diluted	$(4.22)		$(1.50)		$(0.86)
Comprehensive loss:
Net loss	$(138,696)		$(46,344)		$(24,197)
Other comprehensive gain (loss):
Unrealized gain (loss) on Interest Rate Cap	96		(315	)	—
Comprehensive loss	$(138,600)		$(46,659)		$(24,197)

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

54

EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY/(DEFICIT)

YEARS ENDED DECEMBER 31, 2018, 2017 and 2016

(In thousands)

	Preferred Stock						Common Stock			Additional paid-in capital		Other Comprehensive Loss		Accumulated deficit		Total Stockholders’ Equity/(Deficit)
	Series B			Series F, redeemable
	Shares	Amount			Shares	Amount	Shares		Amount
Balances, December 31, 2015	44	$	—		—	$0	9,561		$96	$228,512		$0		$(230,067)		$(1,459)
Dividends paid - Series B Preferred Stock	—	—			—	—	—		—	—				(295	)	(295	)
Kien Huat note conversion	—	—			—	—	1,332		14	17,412				—		17,426
Common stock issued from exercise of rights offering	—	—			—	—	20,139		201	285,802				—		286,003
Stock-based compensation	—	—			—	—	—		—	2,122				—		2,122
Other	—	—			—	—	124		1	(35	)			—		(34	)
Net loss	—	—			—	—	—		—	—				(24,197	)	(24,197	)
Balances, December 31, 2016	44	—			—	—	31,156		312	533,813		—		(254,559	)	279,566
Dividends paid -Series B Preferred Stock	—	—			—	—	—		—	—				(129	)	(129	)
Options exercised	—	—			—	—	2		—	16				—		16
Restricted stock forfeited for tax payment	—	—			—	—	(12	)	—	(275	)			—		(275	)
Kien Huat note conversion	—	—			—	—	1,380		14	35,875				—		35,889
Stock-based compensation	—	—			—	—	—		—	2,155				—		2,155
Stock issued for legal settlement	—	—			—	—	34		—	758				—		758
Comprehensive loss	—	—			—	—	—		—	—		(315	)	—		(315	)
Net loss	—	—			—	—	—		—	—				(46,344	)	(46,344	)
Balances, December 31, 2017	44	—			—	—	32,560		326	572,342		(315	)	(301,032	)	271,321
Adoption of ASC 606	—	—			—	—	—		—	—				(54	)	(54	)
Dividends paid -Series B Preferred Stock	—	—			—	—	—		—	—				(128	)	(128	)
Common stock issued	—	—			—	—	1,686		16	30,552				—		30,568
Issuance of Series F Preferred Stock, redeemable	—	—			—	1	—		—	43,002				—		43,003
Stock Grant to Horsemen	—	—			—	—	200		2	4,718				—		4,720
Options and Option Matching Rights exercised	—	—			—	—	3		—	50				—		50
Restricted stock forfeited for tax payment	—	—			—	—	(46	)	—	(967	)			—		(967	)
Stock-based compensation	—	—			—	—	—		—	1,926				—		1,926
Comprehensive loss	—	—			—	—						96				96
Net loss	—	—			—	—	—		—	—				(138,696	)	(138,696	)
Balances, December 31, 2018	44	—			—	1	34,403		$344	$651,623		$(219)		$(439,910)		$211,839

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

55

EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
	2018		2017		2016
Cash flows provided by (used in) operating activities:	(in thousands)
Net loss	$(138,696)		$(46,344)		$(24,197)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	28,993		1,517		1,341
Amortization of gaming license	5,784		—		—
Amortization of debt issuance costs	4,645		2,091		105
Provision / (Recovery) for doubtful accounts	(21	)	—		—
Non-cash interest expense	1,203		3,846		231
Loss on disposal of property and equipment	10		42		5
Stock-based compensation	7,748		2,755		2,722
Changes in operating assets and liabilities:
Inventories	(762	)	—		—
Accounts receivable	(4,672	)	(352	)	235
Prepaid expenses and other current assets	(4,650	)	785		506
Accounts payable	7,208		418		1,024
Accrued expenses and other current liabilities	26,512		938		4,839
Net cash used in operating activities	(66,698	)	(34,304	)	(13,189	)
Cash flows provided by (used in) investing activities:
Purchase of property and equipment	(1,012	)	(2,007	)	(1,974	)
Capitalized Development Projects costs	(204,524	)	(300,277	)	(157,305	)
Refund/(payment) of cash collateral for deposit bond	35,000		(20,000	)	(15,000	)
License fee payment for the Casino	—		—		(51,000	)
Net change in investments for Development Projects	94,450		(94,449	)	—
Other	(3	)	11		—
Net cash used in investing activities	(76,089	)	(416,722	)	(225,279	)
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	30,000		—		—
Proceeds from related party equity contribution	—		32,000		—
Principal payments on Term Loan Facility	(8,625	)	—		—
Principal payments on equipment loans	(10,711	)	—		—
Proceeds from rights offering, net of expenses	—		—		286,003
Proceeds from Bangkok Bank Loan	4,000		16,000		—
Issuance of common stock to bet365, net of issuance costs	29,582		—		—
Issuance of Series F Preferred Stock, redeemable	11,880		—		—
Series E Preferred Stock and dividend redemption	—		—		(30,711	)
Series B Preferred Stock dividend payment	(128	)	(128	)	(263	)
Proceeds from exercise of stock options and option matching rights	50		16		54
Payment of debt issuance costs and Interest Rate Cap fees	(598	)	(23,877	)	(1,278	)
Other payments	(968	)	(275	)	(88	)
Net cash provided by financing activities	139,482		465,607		253,717
Net (decrease)/ increase in cash, cash equivalents and restricted cash	(3,305	)	14,581		15,249
Cash, cash equivalents and restricted cash, beginning of year	53,055		38,474		23,225
Cash, cash equivalents and restricted cash, end of year	$49,750		$53,055		$38,474
Supplemental disclosures of cash flow information:
Interest paid	$43,121		$38,755		$407
Non-cash investing and financing activities:
Conversion of long-term loan, related party into equity	$0		$35,875		$17,426
Project development costs included in accrued expenses	$4,922		$71,713		$40,783

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

56

EMPIRE RESORTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note A. Organization and Nature of Business

Basis for Presentation

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 is located at the approximately 1,700-acre site of a four-season destination resort ("Destination Resort") in Sullivan County, New York, approximately 90 miles from New York City. The Destination Resort in which Resorts World Catskills is located also includes a 101-room lifestyle hotel ("The Alder"), adjacent to the Casino. The Alder is owned and operated by Empire Resorts Real Estate II, LLC ("ERREII"), a wholly-owned subsidiary of Montreign Operating. Empire Resorts I, LLC ("ERREI"), which is a wholly-owned subsidiary of Montreign Operating, is developing a golf course (the "Golf Course" and, together with the Casino and The Alder, the "Development Projects") at the Destination Resort.

    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. The Company recently announced that VGM operations and food and beverage service at Monticello Casino and Raceway will cease on or about April 23, 2019. 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 its races to offsite pari-mutuel wagering facilities.

The gaming market in the northeastern United States is seasonal in nature. Peak gaming activities occur during the months of May through September. Although winter weather may affect our patrons' ability to reach our facilities, we expect that the availability of the overnight accommodations at the Casino and The Alder will mitigate the adverse affects of winter weather on our gaming operations.

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 flow from operations, borrowings from banks and proceeds from the issuance of debt and equity securities. The Company anticipates that its current cash and cash generated from operations, as well as the remaining net proceeds of the Term Loan Facility and equity financing available under the 2018 Kien Huat Preferred Stock Commitment Letter, which are discussed in Note I, will be sufficient to meet our working capital requirements, the expected costs of the Development Projects and our anticipated debt service requirements for the next 12 months. 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” of this Annual Report on Form 10‑K for a discussion of the risks related to our liquidity and capital structure.

57

Note B. Summary of Significant Accounting Policies

Principles of consolidation

The consolidated financial statements include Empire’s accounts and their wholly-owned subsidiaries. All inter-company balances and transactions are eliminated in consolidation.

Estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from estimates.

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 years ended December 31, 2017 and 2016 have not been adjusted to reflect the impact of the ASC Topic 606. This approach does not significantly impact the comparability of the 2018, 2017 and 2016 amounts. The promotional allowances recorded in 2017 and 2016 are no longer presented separately in 2018 under ASC Topic 606. The adoption of the provisions of ASC 606 resulted in an increase of $54,000 to both “Accrued expenses and other current 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.

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/

58

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 current liabilities” in our consolidated balance sheets.

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 are recognized as collected, due to uncertainty of receipt and timing of payments.

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 condensed consolidated statements of operations.

Complimentary food and beverage revenues, and complimentary room revenues for the years ended December 31, 2018 and 2017, respectively, were as follows:

	Year ended December 31,
	2018	2017
	(in thousands)
Complimentary food and beverage revenues	$10,837	$1,000
Complimentary room revenues	3,455	—

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 deferred revenue liability under ASC 606 was approximately $2.1 million at December 31, 2018. The Company's liability for its loyalty point performance obligations was $1.5 million at December 31, 2017. Loyalty points are generally earned and redeemed continuously over time.    

The retail value amounts included in promotional allowances for the years ended December 31, 2017 and 2016 were as follows:

	Year ended December 31,
	2017	2016
	(in thousands)
Food and beverage	$1,000	$1,486
Non-subsidized free play	2,718	978
Players Club awards	324	383
Total retail value of promotional allowances	$4,042	$2,847

The estimated cost of providing complimentary food, beverages and other items for the years ended December 31, 2017, and 2016 were as follows:

	Year ended December 31,
	2017	2016
	(in thousands)
Food and beverage	$1,750	$2,080
Non-subsidized free play	1,603	577
Players Club awards	324	383
Total cost of promotional allowances	$3,677	$3,040

59

Cash and cash equivalents

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.

Restricted cash and cash equivalents

The Company has several types of restricted cash accounts. These restrictions are in accordance with the NYSGC regulations. In addition, at December 31, 2018, the Company had restricted cash and cash equivalents of $21 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:

	December 31, 2018	December 31, 2017	December 31, 2016
	(in thousands)
Cash and cash equivalents	$28,338	$10,380	$11,012
Restricted cash	373	693	1,078
Restricted cash and cash equivalents for Development Projects	21,039	41,982	26,384
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$49,750	$53,055	$38,474

The Company has three types of restricted cash accounts.

Approximately $223,000 of cash is held in reserve in accordance with NYSGC regulations as of December 31, 2018 as listed below. The Company granted the NYSGC a security interest in the segregated cash account used to deposit NYSGC’s share of net win in accordance with the NYSGC Rules and Regulations. Under New York State Racing, Pari-Mutuel Wagering and Breeding Law, MRMI is obliged to withhold a certain percentage of certain types of racing and pari-mutuel wagers towards the establishment of a pool of money, the use of which is restricted to the funding of approved capital improvements. Periodically during the year, MRMI petitions the NYSGC to certify that the noted expenditures are eligible for reimbursement from the capital improvement fund. The balance in this account was approximately $18,000 and $25,000 at December 31, 2018 and 2017, respectively. In April 2005, the New York law governing VGM operations was modified to provide an increase in the revenues retained by the VGM operator. A portion of that increase was designated as a reimbursement of marketing expenses incurred by the VGM operator. The amount of revenues directed toward this reimbursement is deposited in a bank account under the control of the NYSGC and the VGM operator. The funds are transferred from this account to the VGM operator upon the approval by NYSGC officials of the reimbursement requests submitted by the VGM operator. The balance in this account was approximately $205,000 and $343,000 at December 31, 2018 and 2017, respectively.

In addition to the NYSGC restricted cash balances listed above, the Company established an account to segregate amounts collected and payable to Monticello Harness Horsemen’s Association (the “MHHA”) and pursuant to its contract. The balance in this account was approximately $150,000 and $324,000 at December 31, 2018 and 2017, respectively.

Restricted cash, cash equivalents and investments for Development Projects

Restricted cash and cash equivalents for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At December 31, 2018, restricted cash and cash equivalents for Development Projects of $21.0 million was comprised entirely of cash and cash equivalent balances. At December 31, 2017, restricted cash, cash equivalents and investments for Development Projects balance of $136.4 millionwas comprised of cash balances of approximately $11.2 million, cash equivalents of approximately $30.7 million and short-term investments maturing within one year of approximately $94.5 million. At December 31, 2017, short-term marketable securities 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 marketable securities are recorded at amortized cost, which approximates fair value due to their short-term nature.

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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 collectability 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 collectability. 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 $150,000 and $171,000, as of December 31, 2018 and 2017, respectively.

Property and equipment

Property and equipment is stated at cost less accumulated depreciation. The Company provides for depreciation on property and equipment used by applying the straight-line method over the following estimated useful lives:

Assets	Estimated Useful Lives
Vehicles	5-10 years
Furniture, fixtures and equipment	5-10 years
Land improvements	5-20 years
Building improvements	5-40 years
Buildings	40 years

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 ceased for the Casino when it was substantially complete. Capitalization will cease for the other Development Projects substantially complete or if development activity is suspended for an extended period of time.

The Company capitalized $12.3 million and $29.1 million of interest charges for the year ended December 31, 2018 and 2017, respectively. The Company did not recognize any capitalized interest charges for the fiscal year ended December 31, 2016.

Debt issuance costs

Debt issuance costs are amortized using the effective interest method over the term of the related debt. The amortization is included within interest expense and is included as a component of the capitalized interest costs.

Impairment of long-lived assets and other financial assets

The Company periodically reviews the carrying value of its long-lived assets in relation to historical results, as well as management’s best estimate of future trends, events and overall business climate. If such reviews indicate an issue as to whether the carrying value of such assets may not be recoverable, the Company will then estimate the future cash flows generated by such assets (undiscounted and without interest charges). If such future cash flows are insufficient to recover the carrying amount of the assets, then impairment is triggered and the carrying value of any impaired assets would then be reduced to fair value.

The Company also reviews its financial assets (i.e. non-derivative financial assets) for impairment, if it becomes probable that the commitment will not result in the receipt of proceeds from the issuance of securities.

Other long-term liabilities

The difference between our cash payments and straight-line rent on our land leases of $8.1 million and $8.3 million at December 31, 2018 and 2017, respectively, is included in other long-term liabilities. In addition, the Company has accrued a liability-classified guaranty of approximately $2.3 million related to compensation due the Horsemen under the MHHA Agreement. At December 31, 2018, the Company has also recorded a derivative liability in the form of a put option of approximately $0.9 million, related to the bet365 equity transaction.

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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 years ended December 31, 2018, 2017 and 2016 were the same.

The following table shows the approximate number of common stock equivalents outstanding at December 31, 2018, 2017 and 2016 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 years ended December 31, 2018, 2017 and 2016, because their inclusion would have been anti-dilutive:

	Outstanding at December 31,
	2018	2017	2016
Unvested Restricted stock	37,000	139,000	216,000
Warrants	193,000	133,000	133,000
Restricted stock units ("RSUs")	196,000	73,000	—
Option Matching Rights	—	3,000	21,000
Options	—	13,000	34,000
Total	426,000	361,000	404,000

On August 19, 2009, the Company entered into an investment agreement (the "2009 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 2009 Investment Agreement, or the first 200,000 options or warrants granted to directors or officers as of the final closing date under the 2009 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.” On January 24, 2018, Kien Huat exercised its option to purchase 1,666 shares of common stock due to an option exercise. 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 $0.7 million 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 $143,000 and $251,000 at December 31, 2018 and 2017, respectively, and is presented at fair value as "Other Assets" on the 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 December 31, 2018 and 2017, accumulated other comprehensive loss of $0.2 million and $0.3 million, respectively consisted solely of the fair value adjustment relating to the Interest Rate Cap.

Derivative Liability and Asset

The Company’s Collaboration Agreement with bet365 (see Note I) along with the related Common Stock Purchase Agreement contained an initial put option that met the definition of a derivative instrument and a freestanding contingent forward instrument. The Company classified the initial put option as a long-term liability on its consolidated balance sheet. Also, because, bet365 has or will be obligated to purchase shares of the Company’s common stock at a strike price less than the expected equity value once bet365’s Online Sportsbook Services is approved in New York State, we have classified the freestanding contingent forward instrument as a long-term asset in the Consolidated Balance Sheet. The derivative liability and the contingent forward asset were initially recorded at fair value upon the effective date of the Collaboration Agreement and will be subsequently remeasured to fair value at each reporting date. Changes in the fair value of the derivative liability and long-term asset will be recognized as a component of "other income (expense), net" in the consolidated statement of operations.

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Fair Value of Financial Assets and Liabilities

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, long-term debt, contingent forward contracts, derivative instruments,and a guaranty liability. 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:

	December 31, 2018		December 31, 2017
	Carrying Amount	Fair Value	Carrying Amount		Fair Value	Level of Fair Value Hierarchy
Assets:	(in thousands)
Cash and cash equivalents	$28,338	$28,338	$10,380		$10,380	Level 1
Restricted cash	373	373	693		693	Level 1
Interest Rate Cap	143	143	251		251	Level 2
Restricted cash, cash equivalents and investments for Development Projects:
Cash and cash equivalents	21,039	21,039	41,982		41,982	Level 1
Short-term investments	—	—	94,449		94,209	Level 2
Other assets:
Non-derivative financial asset - Series F Preferred Stock, redeemable	31,122	31,122	—		—	Level 2
Contingent forward contract - bet365	1,865	1,865	—		—	Level 3
Liabilities:
Term B Loan, net of discount	440,803	440,660	443,161		449,749	Level 2
Term A Loan	64,750	64,750	—		—	Level 2
Bangkok Bank Loan	20,000	20,000	16,000		16,000	Level 3
Revolving Credit Facility	15,000	15,000	—		—	Level 2
Long-term loan, related party, net of debt issuance costs	30,954	30,954	—		—	Level 3
Equipment loans	20,384	20,384	31,095		31,095	Level 3
Guaranty liability - MHHA agreement	2,300	2,300	—	—		Level 2
Derivative liability - bet365	879	879	—		—	Level 3

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The fair value of cash and cash equivalents and restricted cash are based on the fair values of identical assets in active markets. The Company used a third party to complete the valuation of its Interest Rate Cap, which is considered a Level 2 asset and is measured at fair value on a recurring basis using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows for the Interest Rate Cap. At December 31, 2017, the estimated fair value of the Company's investments in marketable securities was $94.2 million and the carrying value was approximately $94.5 million. At December 31, 2018 and 2017, the estimated fair value of the Company's outstanding Term B Loan was approximately $440.7 million and $449.7 million and the carrying value before unamortized discounts was approximately $446.6 million and $450.0 million, respectively. The fair value of the Bangkok Bank Loan, the related party loan and the equipment loans approximate carrying value, due to the short-term nature of these agreements. The fair value of the non-derivative financial assets - Series F Preferred Stock, redeemable was valued using a Black Scholes put option model.

Valuation of Derivative Liability and Contingent Forward Contract

The fair value of the derivative liabilities and asset recognized in connection with the Company’s Collaboration Agreement with bet365 (see Note I) was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The derivative liability for the initial put option was recorded in "Other long-term liabilities" on the consolidated balance sheet. The contingent forward contract was recorded net of the contingent put option in "Other assets" on the consolidated balance sheet. The fair value of the derivative liabilities and asset was determined using a Monte Carlo simulation valuation approach with the following assumptions:

	Derivative Liability - bet365	Contingent forward contract - bet365
Equity value	$29.48	$29.48
Strike price	$20.00	$20.00
Expected term	3.46 years	3.13 years
Volatility	61%	62%
Risk-free rate	2.9%	2.9%
Dividend yield	—%	—%

The following table provides a roll forward of the aggregate fair values of the Company’s derivative liabilities and asset, for which fair value is determined using Level 3 inputs (in thousands):

	Derivative Liability - bet365	Contingent forward contract -bet365
Balance as of December 31, 2017	$0	$0
Initial fair value of derivative (liability) asset in connection with Collaboration Agreement	$(879)	$1,865
Change in fair value	$0	$0
Balance as of December 31, 2018	$(879)	$1,865

Valuation of Non-Derivative Liability

The fair value of the guaranty liability recognized in connection with the Company’s agreement with MHHA (see Note J) was determined based on significant inputs that are observable and quoted prices in active markets for similar liabilities, which represents a Level 2 measurement within the fair value hierarchy. The fair value of the derivative liability was determined using a Black Scholes valuation approach with the following assumptions:

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	Guaranty Liability - MHHA Horsemen
Equity value	$10.13
Strike price	$27.50
Expected term	6.11 years
Volatility	68%
Risk-free rate	2.6%
Dividend yield	—%

During the years ended December 31, 2018, 2017, and 2016, there were no transfers between Level 1, Level 2 and Level 3.

Advertising

The Company records in selling, general and administrative expense the costs of general advertising, promotion and marketing programs at the time those costs are incurred. Advertising expense was approximately $11.0 million, $1.4 million and $1.1 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Stock-based compensation

The cost of all share-based awards to employees, including grants of restricted stock and restricted stock units, is recognized in the financial statements based on the fair value of the awards at grant date. 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 December 31, 2018, there was approximately $2.2 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 2.5 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.

The Company paid $51 million to the NYSGC on February 25, 2016 for its Gaming Facility License. The term of the Gaming Facility License is 10 years and the amortization commenced on the date the Casino opened to the public in February 2018. Beginning in February 2018, the Company recognized amortization of $5.8 million on a straight line basis and will continue amortize approximately $6.3 million annually over the next seven years 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.

Segment Reporting

The Company maintains discrete financial information for each of its operating companies, which is used by the Chief Executive Officer (the "CEO") as the basis for allocating resources. Each company has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics as all of the companies provide similar resort services and shares similar processes for delivering services. Our companies have a high degree of similarity in the workforces and target similar patron groups. Accordingly, based on these economic and operational similarities and the way the CEO monitors and makes decisions, the Company has concluded that its operating segments may be aggregated and that it has one reportable segment.

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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"). "). This ASU will require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (“ROU”) 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 adopted the standard on January 1, 2019 and will apply the package of practical expedients available to it upon adoption.  The Company expects that the most significant impact on our consolidated balance sheets will be the recognition of ROU assets and lease liabilities for operating leases that exist at the date of adoption, with the most material of such leases being ground leases.

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.

Note C. Prepaid Expenses and Other Assets

The Company participated in the New York State Empire Zones real estate tax credit program until December 31, 2017. Under this program, the Company received 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 at December 31, 2017. During the year ended December 31, 2018, the Company received refunds for real estate taxes paid of approximately $0.8 million for the years ended December 31, 2016 and 2017. The amounts of the unreceived real estate tax credits and state income tax receivables were included in prepaid expenses and other current assets on the accompanying consolidated balance sheet at December 31, 2018 and 2017, and were approximately $3.4 million and $0.8 million, respectively.

Prepaid supplies is comprised of $0.6 million of uniforms, $0.4 million of linens and $0.4 million of gaming chips. Included in prepaid gaming expenses are $0.6 million 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 December 31, 2018 and 2017:

	12/31/2018	12/31/2017
	(in thousands)
Receivable from New York State	$3,422	$814
Prepaid real estate taxes	284	443
Prepaid insurance	392	327
Prepaid advertising	23	—
Prepaid supplies	1,528	—
Prepaid gaming expenses	773	74
Prepaid maintenance contracts	657	476
Development escrow and refundable security deposit	572	780
Prepaid other	375	462
Total prepaid expenses and other current assets	$8,026	$3,376

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Note D. Property and Equipment

Property and equipment are comprised of the following at December 31, 2018 and 2017:

	12/31/2018		12/31/2017
	(in thousands)
Land	$770		$770
Land improvements	2,382		1,759
Buildings	622,043		4,727
Building improvements	103,621		29,874
Furniture, fixtures and equipment	10,954		5,551
Construction in Progress	2,784		77
	742,554		42,758
Less: Accumulated depreciation	(44,875	)	(15,895	)
	$697,679		$26,863

The $699.8 million increase in gross 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 year ended December 31, 2018. Construction of the Casino and The Alder was substantially completed on January 1, 2019. At December 31, 2018, $5.7 million remains classified as capitalized Project Development costs reflecting the ongoing construction of the Golf Course Project and The Alder.

Depreciation expense was approximately $29.0 million, $1.5 million and $1.3 million for years ended December 31, 2018, 2017 and 2016, respectively.

The VGMs at MRMI 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 December 31, 2018 and 2017, total Capitalized Project Development costs incurred were approximately $5.7 million and $566.8 million, respectively. Total Capitalized Development Project costs at December 31, 2018 consisted of $4.2 million of construction costs, site development, contractor insurance, general conditions, architectural fees, construction manager fees, and approximately $1.5 million of professional service fees such as legal fees 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, construction manager fees, and approximately $6.6 million of professional service fees such legal and accounting fees and is reflected on the balance sheet as Capitalized Development Project costs. The full opening of the Casino and The Alder occurred on January 1, 2019.

In September 2018, ERREI entered into a standard contractor agreement for 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.

In fiscal 2018, total Development Projects costs incurred were approximately $150.2 million, of which $137.6 million was capitalized and $12.6 million was expensed. Development Project expenses consisted of $10.4 million of land lease costs, $0.4 million of real estate taxes, $0.5 million of insurance expense, $0.3 million in consultants and other professional service fees, $0.2 million in legal fees and $1.2 million of pre-opening expenses, including salary and related benefits as well as marketing expenses.

In 2017, total Development Projects costs incurred were approximately $392.2 million, of which $370.7 million was capitalized and $21.6 million was expensed. Development Project costs consisted of $10.7 million of land lease costs and rents, $4.9 million of salary and related benefits, $2.0 million of bank charges, $0.9 million of marketing expenses, $0.6 million of real estate taxes, $0.6 million of insurance expense, $0.6 million in consultants and other professional service fees, $0.3 million in legal fees and approximately $0.5 million of pre-opening expenses, including travel, relocation, recruiting and other start-up costs.

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In 2016, Development Project costs consisted of $10.4 million of land lease costs and rents, $0.4 million of real estate taxes, $0.5 million of insurance expense, $0.3 million in consultants and other professional service fees, $0.2 million in legal fees and approximately $1.2 million of pre-opening expenses, including salary and related benefits, as well as marketing expenses.

Cash Collateral for Deposit Bond

In February 2016 and June 2017, the Company deposited $15 million and $20 million, respectively, in performance bonds to guaranty 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 which would trigger the return of the deposited funds to the Company. On January 4, 2018, the NYSGC confirmed that the Company met such minimum capital investment criteria as required by the Gaming Act and $35 million was returned to the Company and deposited into a lender-controlled account for use towards the expenses of the Development Projects.

Restricted Cash, Cash Equivalents and Investments for Development Projects

At December 31, 2018, $20.1 million of restricted cash and cash equivalents for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At December 31, 2017, $136.4 million of restricted cash, cash equivalents and investments for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. This consisted of cash and cash equivalents totaling $41.9 million and short-term marketable securities totaling $94.5 million, which were comprised of commercial paper and U. S. Treasury Notes with maturities of less than one year.

Note F. Accrued Expenses and Other Current Liabilities

Accrued Development Projects costs at December 31, 2018 and 2017 were $4.9 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 were used to pay the accrued Development Project costs.

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

	12/31/2018	12/31/2017
	(in thousands)
Liability for horseracing purses	$868	$886
Accrued payroll	8,142	1,715
Accrued marketing	5,298	52
Accrued interest expense	5,033	14
Accrued redeemable points and deferred revenues	2,202	271
Liability to NYSGC	2,816	1,507
Liability for local progressive jackpot	2,560	1,110
Accrued premium game leases	1,288	—
Accrued professional fees	2,337	744
Federal tax withholding payable	561	81
Accrued other	2,573	940
Total accrued expenses and other current liabilities	$33,678	$7,320

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Note G. Long-Term Debt

Long-term debt, other than related party debt, consisted of the following at December 31, 2018 and 2017:

	12/31/2018		12/31/2017
	(in thousands)
Term B Loan (net of unamortized discount)	$440,803		$443,161
Term A Loan	64,750		—
Bangkok Bank Loan	20,000		16,000
Revolving Credit Facility	15,000		—
Equipment loans	20,384		31,095
Total long-term debt	560,937		490,256
Debt issuance costs	(17,240	)	(20,520	)
Total long-term debt, net	543,697		469,736
Less: Current portion of long-term debt	(48,004	)	(14,588	)
Long-term debt, net of current portion	$495,693		$455,148

Term Loan Agreement

On January 24, 2017 (the "Closing Date"), Montreign Operating entered into the Building Term Loan Agreement (the “Original 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. On May 26, 2017, the parties entered into the first amendment to the Term Loan Agreement and certain ancillary agreements (the “Amended Term Loan Agreement” and, together with the Original Term Loan Agreement, the “Term Loan Agreement”). The Amended Term Loan Agreement increased the aggregate principal amount of the Term B Loan issued under the Original Term Loan Agreement by $35 million on substantially the same terms and conditions as the Original Term Loan Agreement, which terms are discussed below. In the aggregate, the Term Loan Agreement provided Montreign Operating with loans in principal amount of $520 million (the “Term Loan Facility”). All of the borrowings under the Term Loan Agreement were used to fund the costs of the Development Projects.

The Term Loan Facility consists of $70 million of Term A loans (the “Term A Loan”) and $450 million of Term B loans (the “Term B Loan”). The Term B Loan made pursuant to the Original Term Loan Agreement was priced at 98.12% of the principal amount and borrowed in full on January 24, 2017. The incremental $35 million principal amount of the Term B Loan made pursuant to the Amended Term Loan Agreement was priced at 99.75% of the principal amount and borrowed in full on May 26, 2017. The unamortized discount that has been netted against the outstanding Term B Loan balance was $5.8 million and $6.8 million at December 31, 2018 and 2017, respectively. In addition, the Term A Loan is fully drawn in accordance with the Term Loan Agreement, which required Montreign Operating 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.

As required by the Term Loan Agreement, proceeds of the Term Loan Facility were used to pay fees and expenses related to the financing and fund various lender-controlled accounts. The Company further funded these lender-controlled accounts with approximately $9.9 million in December 2017 pursuant to the Term Loan Agreement from the proceeds of the Bangkok Bank Loan, which is discussed below. On March 1, 2018 and March 23, 2018, the Company contributed approximately $2.7 million and $0.9 million, respectively, to an interest reserve fund under the Term Loan Agreement. These contributions reflect the additional interest to be paid on the Term Loan Facility as a result of the Company's deferral of the completion of 15 VIP suites at the Casino from March 1, 2018 to March 23, 2018 and a further deferral to March 30, 2018. Additionally, in May 2018, the Company contributed approximately $0.5 million to the lender controlled accounts as a result of the payment for additional construction change orders. All funds held in these lender-controlled accounts are used to pay the expenses of the Development Projects. In order to access the funds held in these lender-controlled accounts, Montreign Operating was required to satisfy the applicable disbursement conditions set forth in the Term Loan Agreement and ancillary agreements, such as providing evidence that the withdrawn funds are used for permitted purposes in connection with the Development Projects.

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. Interest accrues on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a LIBOR floor of 1%) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. At December 31,

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2018, the interest rate on the Term A Loan was 7.68% and the interest rate on the Term B Loan was 10.96%. 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 2.5% per annum for the period from the Closing Date through March 24, 2018 and 5.0% per annum thereafter until July 24, 2018, when the Term A Loan was drawn in full.

The Company is making principal payments under the Term A Loan and the Term B Loan at the end of each calendar quarter, which repayment began 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, through the quarter ending March 31, 2019, and quarterly installments of approximately $2.6 million thereafter. The Company repaid approximately $5.3 million and $3.4 million on the Term A Loan and Term B Loan, respectively, during the year ended December 31, 2018. As of December 31, 2018 and 2017, $440.8 million and $443.2 million principal was outstanding (net of original issue discount) under the Term B Loan, respectively, and $64.8 million and no principal amount was outstanding under the Term A Loan, respectively.

In the event that the Term B Loan is prepaid or repaid in whole or in part for any reason other than as a result of scheduled amortization and certain other exceptions, Montreign Operating is required to pay prepayment premiums based on a make-whole provision if the prepayment occurs between the Closing Date (but excluding) and the 30th-month anniversary following the Closing Date, a 2% premium if the prepayment occurs between the 30th Month and (but excluding) the 42nd-month anniversary of the Closing Date and a 1% premium if the prepayment occurs between the 42nd Month and (but excluding) the 54th-month anniversary of the Closing Date.

The Term Loan Agreement contains representations and warranties, customary events of default, and affirmative, negative and financial covenants. Mandatory prepayments of the Term Loan Facility will be required upon the occurrence of certain events, including sales of certain assets and casualty events. In addition, the Term Loan Agreement restricts the Project Parties (as defined below) from incurring additional indebtedness except for, among other things, obligations pursuant to hedging agreements required under the Term Loan Agreement, capital lease obligations and purchase money indebtedness (including FF&E financing) in an amount not exceeding $40 million, subordinated indebtedness so long as the proceeds are applied pursuant to the terms of the Term Loan Agreement and other indebtedness not exceeding $10 million. Also, the Project Parties may not make any dividend or other distribution, redeem or otherwise acquire any equity securities or subordinated indebtedness. Moreover, the Project Parties are restricted from entering into advisory, management or consulting agreements with an affiliate of any Project Party, 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.

Additional affirmative, negative and financial covenants under the Term Loan Agreement include that the Company maintain compliance with a maximum first lien leverage ratio not to exceed 5.00:1.00, a minimum interest coverage ratio not to fall below 2.00:1.00 and a consolidated capital expenditure covenant not to exceed $10.5 million of eligible expenses in any calendar year. In addition, the Company is allowed to add back pro forma EBITDA in the amount of $108.4 million, $77.5 million and $39.4 million in each of the first three testing quarters, respectively. 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 (June 30, 2019), which is the date on which at least 95% of all rooms in the hotel are open to the public. This occurred on January 1, 2019. As of December 31, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

The Term Loan Facility is guaranteed by Montreign Operating, ERREI and ERREII (together, 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.

Obligations under the Term 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, breach of the affirmative or negative covenants, revocation of a gaming license for seven consecutive business days, and a Change in Control (as such term is defined in the Term Loan Agreement) of Montreign Operating.

Revolving Credit Agreement

On January 24, 2017, Montreign Operating entered into a Revolving Credit Agreement (as amended, the “Revolving Credit Agreement”) among Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative

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agent. The Revolving Credit Agreement 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) (the “Revolving Credit Facility”), the proceeds of which may be used for working capital needs, capital expenditures and other general corporate purposes following the opening of specified Casino amenities to the public. Concurrently with the Term Loan Amendment, on May 24, 2017, Montreign Operating amended the Revolving Credit Agreement to, among other things, permit Montreign Operating to increase the aggregate principal amount of the Term B Loan under the Term Loan Amendment. On December 7, 2017, Montreign Operating entered into a Second Amendment to the Revolving Credit Agreement (the "Second Revolving Credit Amendment"). The Second Revolving Credit Amendment enables Montreign Operating to borrow up to $15 million (but not obtain a letter of credit) under the Revolving Credit Facility with a narrowed scope of amenities at the opening of the Casino, subject to the receipt of NYSGC approval to open the Casino to the public. On February 5, 2018, Montreign Operating received a certificate from the NYSGC to commence gaming operations at the Casino. The Revolving Credit Facility will mature on January 24, 2022.

At December 31, 2018 and 2017, $15.0 million and $0, respectively, had been drawn down on the Revolving Credit Facility. More specifically, the Company drew $9.0 million on January 23, 2018, $4.0 million on February 9, 2018 and $2.0 million on June 29, 2018. 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 December 31, 2018, the interest rate on borrowings under the Revolving Credit Facility was 7.71%.

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, the incurrence of certain additional indebtedness, subject to certain exceptions and reinvestment rights. As of December 31, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

Obligations under the Revolving Credit 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, breach of the affirmative or negative covenants, revocation of a gaming license for seven consecutive business days, and a Change in Control (as such term is defined in the Term Loan Agreement) of Montreign Operating.

Bangkok Bank Loan Agreement

On December 28, 2017, the Company entered into a Delayed Draw Term Loan Credit Agreement (the “Bangkok Bank Loan Agreement”), with Bangkok Bank PCL, New York Branch (“Bangkok Bank”), as lender, and MRMI, 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 “Bangkok Bank Loan”). The Bangkok Bank Loan Agreement 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 Company borrowed $16 million at the closing of the Bangkok Bank Loan. Of this amount, the Company contributed approximately $9.9 million to Montreign Operating pursuant to the terms of the Term Loan Agreement, as discussed above. On August 30, 2018, the Company borrowed $2 million and, on November 7, 2018, the Company borrowed the remaining $2 million under the Bank of Bangkok Loan. At December 31, 2018, the Bank of Bangkok loan was fully drawn.

The Bangkok Bank Loan matures on December 28, 2019. The maturity of the Bangkok Bank Loan may be extended in the sole discretion of Bangkok Bank for additional one-year periods with other terms and conditions to be agreed by the Company and Bangkok Bank. Any such extension of the Bangkok Bank Loan maturity will be subject to a 1% extension fee.

Interest accrues on outstanding borrowings under the Bangkok Bank Loan Agreement at a rate equal to LIBOR plus 6.25%, or an alternate base rate plus 5.25% per annum. In addition, the Company paid 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 was paid on the last business day of each quarter beginning on March 31, 2018. The Bangkok Bank Loan may be prepaid in whole or in part without premium or penalty, subject to the payment of a 2.0% prepayment fee. At December 31, 2018, the interest rate on borrowings under the Bangkok Bank Loan was 8.77%.

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 covenants, negative

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covenants 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. The Company is in compliance with the covenant terms as of December 31, 2018.

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 December 31, 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 amount financed was $31.1 million and the terms of these agreements run between six and 36 months. The balances outstanding at December 31, 2018 and 2017, was $20.4 million and $31.1 million, respectively. The stated interest rates for these loans are between zero and eight 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.

The following table lists the annual principal repayments due for the Company's long term debt, other than Related Party Debt, as of December 31, 2018:

Year ending December 31,	Totals
	(in thousands)
2019	$48,004
2020	20,690
2021	15,815
2022	53,625
2023	428,625
Totals	$566,759

Note H. Long-Term Loans, Related Party

Subsidiary Revolving Loan Agreement

On November 30, 2018, Empire entered into a Revolving Loan Agreement (the “Sub Revolving Loan Agreement”) with Montreign Operating. The Sub Revolving Loan Agreement provides for loans (in the aggregate, the “Sub Revolving Loan”) to Montreign Operating in an aggregate principal amount of up to $10 million (the “Subsidiary Loan Amount”). Interest will accrue on outstanding borrowings at a rate of 7% per annum and will be payable beginning on the last day of each calendar quarter beginning on March 31, 2019. Of that interest, 1% will be payable in cash and 6% will accrue and remain outstanding until paid in full (and continue to bear interest). The Sub Revolving Loan, together with interest accrued and yet unpaid, will be due and payable on April 25, 2023.

As a condition to each advance under the Sub Revolving Loan, (i) Montreign Operating is required to deliver a written request for an advance three days before the date on which the advance is made; (ii) after giving effect to the advance, the principal amount outstanding will not exceed the Loan Amount, and (iii) no event of default will have occurred and be continuing, or would occur after giving effect to the advance, on the date of the advance request.

The Sub Revolving Loan Agreement contains customary representations and warranties and affirmative covenants, including representations, warranties and covenants on organization, authorization, enforceability and maintenance of existence. The Sub

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Revolving Loan is secured by a security interest in all personal property of Montreign Operating subject to the limitations and exceptions described in the Sub Revolving Loan Agreement. Obligations under the Sub Revolving Loan Agreement may be accelerated upon certain customary events of default, including, among others: nonpayment of principal, interest or fees; breach of any term, covenant, or agreement under the Sub Revolving Loan Agreement; a bankruptcy proceeding involving Montreign, whether voluntary or involuntary; or the acceleration of any indebtedness in excess of $10 million.

Montreign Operating agreed to indemnify Empire and its officers, partners, members, directors, employees and agents (together, the “Indemnified Parties” and each an “Indemnified Party”) against any and all damages arising out of any negligence or tortious acts or omissions by Montreign Operating or its agents, contractors, servants or employees, any failure by Montreign to comply with the terms of the Sub Revolving Loan Agreement, and any failure by Montreign Operating to comply with the law, except to the extent any such damages result from the gross negligence or willful misconduct of an Indemnified Party.

On November 30, 2018 and December 7, 2018, the Company advanced an aggregate of $10 million to Montreign Operating pursuant to a request for advance under the Sub Revolving Loan.

Loan Arrangements with Kien Huat Realty III Limited

Kien Huat Subordinate Loan Agreement

On June 25, 2018, Kien Huat and Empire 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 Operating 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.

On July 5, 2018, the Company borrowed $5 million, and on July 31, 2018, the Company borrowed $5 million. The Company also borrowed an additional $10 million on each of September 11, 2018 and 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. At December 31, 2018, $30 million was outstanding under the Kien Huat Subordinate Loan.

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

Concurrently with and as a condition to the closing of the Bangkok Bank 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 (the “Kien Huat Backstop Loan”). Any amounts borrowed under the Kien Huat Backstop Loan 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 (the “Backstop Maturity Date”). As of December 31, 2018, no amounts had been borrowed under the Kien Huat Backstop Loan.

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The Kien Huat Backstop Loan bears interest at a rate of 12% per annum. Prior to the Backstop Maturity Date, interest on any principal amount outstanding under the Kien Huat Backstop Loan will accrue and be added to the outstanding principal of the Kien Huat Backstop Loan on the first business day of each calendar month beginning on January 1, 2018 and will thereafter be deemed to be part of the principal indebtedness. The Kien Huat Backstop Loan, including all interest and any other amounts due under the Kien Huat Backstop Loan, will be payable in cash on the Backstop Maturity Date. Kien Huat was paid a commitment fee of $200,000 on December 28, 2017.

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 the Kien Huat Backstop Loan 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.

Kien Huat Montreign Loan Agreement and Kien Huat Note Exchange Agreement

On January 24, 2017, Montreign Holding entered into a loan agreement (the "Kien Huat Montreign Loan Agreement"). Pursuant to the Kien Huat Montreign Loan Agreement, Montreign Holding obtained from Kien Huat a loan in the principal amount of $32.3 million (the "Kien Huat Montreign Loan"). The net proceeds of the Kien Huat Montreign Loan were used as a capital contribution to Montreign Operating for use towards the expenses of the Development Projects. The obligations of Montreign Holding under the Kien Huat Montreign Loan Agreement were secured by a pledge of all the membership interests in Montreign Holding.

Concurrently with and as a condition to the closing of the Bangkok Bank Loan Agreement, on December 28, 2017, Empire, Montreign Holding, and Kien Huat entered into a Note Exchange Agreement (the “Kien Huat Note Exchange Agreement”). The Kien Huat Note Exchange Agreement provides for the issuance of 1,379,873 shares of common stock Kien Huat in full satisfaction of the Kien Huat Montreign Loan. In connection with the satisfaction in full of the Kien Huat Montreign Loan pursuant to the Kien Huat Note Exchange Agreement, Empire's pledge of its membership interests in Montreign Holding was released.

Kien Huat Construction Loan Agreement

On October 13, 2016, Montreign Operating and Kien Huat entered into a loan agreement (the "Kien Huat Construction Loan Agreement"). Pursuant to the Kien Huat Construction Loan Agreement, Kien Huat agreed to make available to Montreign Operating up to an aggregate of $50 million of loans to pay the expenses of the Casino while the debt financing for the Development Projects was being finalized. In connection with the closing of the Term Loan Facility and the Kien Huat Montreign Loan, on January 24, 2017, the Kien Huat Construction Loan Agreement expired pursuant to its terms without being utilized by Montreign Operating. Montreign Operating paid Kien Huat a commitment fee of $500,000upon execution of the Kien Huat Construction Loan. The commitment fee was capitalized and was included in "Other Assets" at December 31, 2016. It was charged to "Interest Expense" on the Consolidated Statement of Operations on January 24, 2017, upon the issuance of the Kien Huat Montreign Loan Agreement.     

Conversion of 2010 Kien Huat Note

On November 17, 2010, Empire entered into a loan agreement (the "2010 Kien Huat Loan Agreement") with Kien Huat pursuant to which Empire issued a convertible promissory note (the "2010 Kien Huat Note") in the original principal amount of $35 million, of which $17.4 million was outstanding as of December 31, 2015. On February 17, 2016, upon consummation of the January 2016 Rights Offering (as defined and discussed in Note I), the 2010 Kien Huat Note was converted into 1,332,058 shares of common stock in accordance with the terms of the 2010 Kien Huat Loan Agreement.

The Company recognized approximately $0.2 million in interest expense associated with the 2010 Kien Huat Note during the year ended December 31, 2016.

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Note I. Stockholders’ Equity

Authorized Capital

On November 1, 2016, Empire filed the Second Amended and Restated Certificate of Incorporation (the "Restated Charter”) with the Secretary of State of the State of Delaware. Pursuant to Restated Charter, Empire’s authorized capital stock consists of 155 million shares, of which 150 million shares are common stock and five million shares are preferred stock.

Common Stock

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.

January 2016 Rights Offering

On January 4, 2016, we commenced a rights offering (the "January 2016 Rights Offering") of transferable subscription rights to holders of record of our common stock and Series B Preferred Stock as of January 4, 2016 to purchase up to 20,138,888 shares of our common stock. In connection with the January 2016 Rights Offering, on December 31, 2015, the Company and Kien Huat entered into a standby purchase agreement (the "January 2016 Standby Purchase Agreement"). Pursuant to the January 2016 Standby Purchase Agreement, Kien Huat agreed to (i) exercise its basic subscription rights to acquire approximately $30 million of our common stock within 10 days of the commencement of the January 2016 Rights Offering with a closing proximate thereto and (ii) to exercise the remainder of its basic subscription rights prior to the expiration date of the January 2016 Rights Offering. In addition, Kien Huat agreed it would exercise all rights not otherwise exercised by the other holders in the January 2016 Rights Offering in an aggregate amount not to exceed $290 million.

The January 2016 Rights Offering closed on February 17, 2016. The Company issued a total of 20,138,888 shares of common stock for aggregate gross proceeds of approximately $290 million. This includes 176,086shares issued to holders upon exercise of their basic subscription and over-subscription rights and 13,136,817 shares issued to Kien Huat upon exercise of its basic subscription rights. Kien Huat also acquired the remaining 6,825,985 shares not sold in the January 2016 Rights Offering pursuant to the January 2016 Standby Purchase Agreement. The net proceeds of the January 2016 Rights Offering were approximately $286.0 million, which were used (i) to pay the pre-opening expenses relating to the construction of the Casino, (ii) to redeem the outstanding shares of the Series E Preferred Stock in accordance with the terms of the Settlement Agreement on March 7, 2016 and (iii) for the working capital needs of the Company. Pursuant to the January 2016 Standby Purchase Agreement, we paid Kien Huat a commitment fee of $1.5 million which is equal to 0.5% of the maximum amount of the January 2016 Rights Offering, and reimbursed Kien Huat for expenses in the amount of $50,000.

Bet365 Common Stock Purchase Agreement

On November 14, 2018, the Company entered into a sportsbook and digital gaming collaboration agreement (the “Collaboration Agreement”) with Hillside (New York) LLC, an affiliate of bet365 Group Limited (“bet365”). In connection with entering into the Collaboration Agreement, Hillside (New Media Holdings) Limited, an affiliate of bet365 ("bet365 Investor"), and the Company entered into a common stock purchase agreement (the “bet365 Common Stock Purchase Agreement”) pursuant to which bet365 Investor agreed to purchase up to 2.5 million shares of common stock of the Company at a purchase price of $20.00 per share, for an aggregate investment of $50 million.

Upon execution of the bet365 Common Stock Purchase Agreement, the bet365 Investor purchased 1,685,759 shares of common stock. The offer and sale of these shares was made pursuant to a shelf registration statement on Form S-3 (File No. 333-214119), which became effective on November 17, 2016, pursuant to a base prospectus dated as of November 17, 2016 contained in such registration statement and a prospectus supplement filed with the Securities and Exchange Commission on November 14, 2018. The Company received net proceeds of $29.6 million from the offering.

Pursuant to the bet 365 Common Stock Purchase Agreement, the bet365 Investor will be obligated to purchase the remaining 814,241 shares of common stock at $20.00 per share so long as the following closing conditions are met: (i) 30 days have passed following the receipt of approval from the NYSGC of bet365 Investor’s ownership of the Shares and the enactment of laws by New York State allowing the offering of the bet365 Online Sportsbook Services; (ii) the representations and warranties of the Company are true and correct in all material respects and the Company has complied with its obligations under the bet365 Common Stock Purchase Agreement; (iii) the Collaboration Agreement is in full force and effect and there is no material breach

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of the Collaboration Agreement by the Company outstanding; (iv) the common stock of the Company continues to be listed on The Nasdaq Stock Market; (v) the Company continues to own 100% of the equity interests in the Casino; and (vi) the Gaming Facility License is still valid.

After all gaming taxes have been paid and the parties have recouped their costs and expenses, bet365 may receive a distribution (the “Preferred Distribution”) equal to 50% of the positive difference, if any (the “delta”), between $20 and the value of the Company’s common stock measured on a given date (such date, the “Trigger Date”), multiplied by the number of shares of common stock then held by bet365 Investor. The Trigger Date is 30 days after the Company’s first filing of an annual or quarterly report with the Securities and Exchange Commission after bet365 recoups its costs incurred pursuant to the Collaboration Agreement. The delta will be the positive difference between $20 and the 30-day volume-weighted average price of the Company’s common stock on the Trigger Date. If the Company is no longer a reporting company, or if the Company’s common stock is not listed on a national securities exchange, the delta will be the positive difference between $20 and the fair market value of the Company’s common stock as determined by an investment bank retained by the parties. If a change of control (as such term is defined in the Collaboration Agreement) of the Company occurs before the Trigger Date, the delta will be the positive difference between $20 and the per share value paid by a third party in a change of control transaction. The Preferred Distribution, if any, will be payable on a monthly basis over a period of three years. If bet365 Investor sells any shares of common stock prior to the Trigger Date, the Preferred Distribution will be deemed to be $0.

The Company concluded that the Preferred Distribution (an initial put option) is an embedded derivative liability because the right to receive the Preferred Distribution will not transfer with any shares of common stock sold by the bet365 Investor. The fair value of the derivative liability associated with shares already sold to the investor was $0.9 million at December 31, 2018.

The Company also concluded the ability to purchase the remaining shares under the bet365 Common Stock Purchase Agreement is a freestanding contingent forward instrument. The fair value of this instrument was approximately $1.9 million at December 31, 2018, net of the derivative liability (contingent put option) of approximately $0.4 million for the right associated with the remaining shares to also receive the Preferred Distribution.

The derivative liability and the contingent forward asset were recorded at fair value upon the effective date of the Collaboration Agreement and will be subsequently remeasured to fair value at each reporting date. Changes in the fair value of the derivative liabilities and long-term asset will be recognized as a component of "other income (expense), net" in the consolidated statement of operations.

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 F Preferred Stock, redeemable

On November 6, 2018, the Company and Kien Huat entered into a letter agreement (as amended and restated on November 9, 2018, the "KH 2018 Preferred Stock Commitment Letter") pursuant to which Kien Huat committed to provide additional 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 on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and in accordance with the terms of the Certificate of Designations, Preferences and Rights of the Series F Preferred Stock, which the Company filed with the Secretary of State of the State of Delaware on November 5, 2018 and amended and restated on November 9, 2018 (as amended and restated, the “Series F Certificate of Designation”). 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

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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. The Company has recorded the fair value of this commitment as a non-derivative financial asset in the amount of $31.1 million on the consolidated balance sheet in "Other Assets" and "Paid in Capital" at December 31, 2018. The Company is amortizing this asset into equity as the commitment is drawn.

On November 13, 2018, under the terms of the KH Series F Preferred Stock Commitment, the Company and KH entered into a subscription agreement, pursuant to which KH purchased 120 shares of the Company's Series F Preferred Stock for an aggregate purchase price of $12 million and net proceeds to the Company (after deducting approximately $120,000 funding fee due to KH) of $11.9 million.

Series B Preferred Stock

The Company’s Series B Preferred Stock has voting rights of 0.054 votes per share and each share is convertible into 0.054 shares of common stock. It has a liquidation value of $29 per share and is entitled to annual cumulative dividends of $2.90 per share payable quarterly in cash. The Company has the right to pay the dividends on an annual basis by issuing shares of its common stock at the rate of $3.77 per share. The value of common shares issued as payment is based upon the average closing price for the common shares for the 20 trading days preceding January 30 of the year following that for which the dividends are due. At December 31, 2018 and 2017, there were 44,258 shares of Series B Preferred Shares outstanding.

The Board authorized the cash payment of the Series B Preferred Stock dividends on March 8, 2016. Quarterly payments in the amount of $32,087 were made on April 2, 2018, July 2, 2018, October 1, 2018 and January 2, 2019 for the 2018 period. Quarterly payments in the amount of $32,087 were made on April 3, 2017, July 3, 2017, October 2, 2017 and January 2, 2018 for the 2017 period.

Bryanston Settlement Agreement

Effective as of June 30, 2013, the Company and its affiliates consummated the closing of a Settlement Agreement and Release (as amended, the “Bryanston Settlement Agreement”) with Bryanston Group, Inc. and its affiliates (the “Bryanston Parties”). Pursuant to ASC 480, the Series E Preferred Stock held by the Bryanston Parties became contractually redeemable subject to the terms and conditions of the Bryanston Settlement Agreement and was recorded as a liability on the December 31, 2015 balance sheet.

On March 7, 2016, the Company redeemed the outstanding Series E Preferred Stock held by the Bryanston Group for approximately $30.7 million pursuant to the terms of the Settlement Agreement. Because the event that caused the entire liability to become due occurred during 2016, the liability was recorded pursuant to the payment terms in place at December 31, 2015.

Note J. Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights

Warrants

As of December 31, 2018, there are outstanding warrants to purchase an aggregate of approximately 133,300 shares of Empire’s common stock at $30.00 per share with an expiration date of May 10, 2020 and warrants to purchase 60,000 shares of common stock at $81.50 per share with an expiration date of March 15, 2025.

On November 1, 2014, MRMI and the Monticello Harness Horsemen’s Association (the “MHHA”) entered into an agreement that governs the conduct of MRMI and MHHA relating to horseracing purse payments, the simulcasting of horse races and certain other payments (the “2014 MHHA Agreement”). Pursuant to the 2014 MHHA Agreement, on March 16, 2018, Empire issued to MHHA 200,000 shares of common stock, and on March 15, 2018, Empire issued to MHHA a warrant to purchase 60,000 shares of common stock at $81.50 per share, the proceeds of any sales of which will provide additional monies for the harness horsemen’s purse account. Under the terms of the 2014 MHHA Agreement, the MHHA may dispose of the common stock beginning six months after receipt the common stock, subject to limitations upon the quantity of common shares disposed at any one time, as prescribed by the MHHA Agreement. The Company also provided a guaranty on the value of the shares provided to MHHA upon the termination of the MHHA Agreement, which is approximately seven years after issuance.

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Restricted Stock, Restricted Stock Units and Options

Second Amended and Restated 2005 Equity Incentive Plan

In May 2015, the Company's Second Amended and Restated 2005 Equity Incentive Plan expired. Options to purchase approximately 13,300 shares of common stock were outstanding as of December 31, 2017 under the 2005 Equity Incentive Plan. During the year ended December 31, 2018 approximately 1,700 shares were exercised and approximately 11,60 shares were forfeited. There were no options outstanding at December 31, 2018.

In 2018, 2017 and 2016, the Company received approximately $25,000, $16,000 and $54,000 , respectively, in proceeds from shares of common stock issued as a result of the exercise of stock options. No options were granted under the 2005 Equity Incentive Plan in 2015.

The following table reflects stock option activity in 2018, 2017 and 2016:

	Number of shares		Range of exercise prices per share	Weighted average exercise price per share		Weighted average remaining contractual life (years)
Options outstanding at December 31, 2015	56,600		$7.95 - $131.10	$	48.50	2.61
Options exercised in 2016	(18,000	)	$7.95-$9.90
Forfeited in 2016	(5,000	)	$14.85 -$82.95
Options outstanding at December 31, 2016	33,600		$7.95 - $131.10	$	68.92	1.11
Options exercised in 2017	(2,000	)	$7.95
Forfeited in 2017	(18,300	)	$14.85 -$131.10
Options outstanding at December 31, 2017	13,300		$15.00 - $40.05	$	26.03	0.74
Options exercised in 2018	(1,700	)	$15.00
Forfeited in 2018	(11,600	)	$24.75 -$40.05
Options outstanding at December 31, 2018	—		—	$	—	—

2015 Equity Incentive Plan

In September 2015, our Board approved, and in November 2015, our stockholders approved the Company's 2015 Equity Incentive Plan (the "2015 Equity Incentive Plan"). The 2015 Equity Incentive Plan provides for an aggregate of 2,600,707 shares of common stock to be available for Awards. At December 31, 2018, a total of 2,280,701 shares were available for future issuance under the 2015 Equity Incentive Plan.

Stock-based compensation expense was approximately $7.2 million, $2.8 million and $2.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. Stock based compensation expense for the 2015 Equity Plan was approximately $1.9 million in fiscal 2018 and stock based compensation expense related to the 2014 MHHA Agreement was approximately $5.3 million. As of December 31, 2018, there was approximately $2.2 million of total unrecognized compensation cost related to non-vested share-based compensation awards granted under the 2015 Equity Incentive Plans. That cost is expected to be recognized over the remaining vesting period of 2.5 years. This expected cost does not include the impact of any future stock-based compensation awards.

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The following table reflects restricted stock and restricted stock unit activity in 2018, 2017 and 2016:

	Number of Restricted Shares		Number of Restricted Stock Units
Outstanding at December 31, 2015	137,000		—
Grants in 2016	105,000		—
Vested in 2016	(22,000	)	—
Forfeited in 2016	(4,000	)	—
Outstanding at December 31, 2016	216,000		—
Grants in 2017	1,000		74,500
Vested in 2017	(55,000	)	—
Forfeited in 2017	(22,000	)	(1,600	)
Outstanding at December 31, 2017	140,000		72,900
Grants in 2018	—		161,200
Vested in 2018	(56,500	)	(18,600	)
Forfeited in 2018	(46,000	)	(20,000	)
Outstanding at December 31, 2018	37,500		195,500

Option Matching Rights

On August 19, 2009, the Company entered into an investment agreement (the "2009 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 2009 Investment Agreement, if any options or warrants outstanding at the time of the final closing under the 2009 Investment Agreement, or the first 200,000 granted to directors or officers as of the final closing date under the 2009 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”.

Pursuant to the terms of the 2009 Investment Agreement, the Company is required to provide notice (an “Option Exercise Notice”) of any exercise within five business days, after which notice is received, Kien Huat is required to notify the Company of whether it decides to exercise such Option Matching Rights within 10 business days. The Company did not provide such notice to Kien Huat pursuant to the 2009 Investment Agreement. On December 31, 2015, the Company and Kien Huat entered into a letter agreement (the “OMR Letter Agreement”) pursuant to which the parties agreed that, as a result of the Company’s failure to provide the Option Exercise Notice, Kien Huat’s right to elect to purchase an equal number of shares had not yet vested and would inure to Kien Huat’s benefit only upon the Company’s delivery of such Option Exercise Notice. To fulfill the Company’s obligations pursuant to the 2009 Investment Agreement pursuant to the OMR Letter Agreement, the Company provided the Option Exercise Notice as of December 31, 2015 for approximately 204,706 shares of common stock as required by the Investment Agreement. Kien Huat had 10 business days following the date on which the Company’s Chief Compliance Officer provides written notice that Kien Huat is no longer unable to exercise the Option Matching Rights pursuant to the Company’s Insider Trading Policy (the “Effective Date Notice”) to elect whether to exercise such Option Matching Rights.

On February 17, 2016, the Company provided the Effective Date Notice to Kien Huat regarding Kien Huat's election to exercise its Option Matching Rights. On February 17, 2016, Kien Huat declined to exercise the Option Matching Rights to purchase 204,706 shares of common stock. At December 31, 2017, there were approximately 3,000 Option Matching Rights outstanding with various exercise prices and expiration dates through July 2018. On January 24, 2018, Kien Huat elected to exercise its Option Matching Rights for 1,666 shares of the Company's common stock, after a former officer exercised his stock option which was due to expire on January 15, 2018. The Option Matching Rights were exercised at a price of $14.95 per share. The last remaining Option Matching Rights expired in July 2018.

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Note K. Concentration

As of December 31, 2018, the Company had no receivable which represented more than 10% of the total net outstanding accounts receivable.

As of December 31, 2017, the Company had one debtor that consisted of greater than 10% of accounts receivable. Hawthorne OTB represented 13.0% of the total net outstanding racing- related accounts receivable.

Note L. Employee Benefit Plans

Empire 401(k) Plan

Our eligible employees may participate in a Company-sponsored 401(k) benefit plan (the “Plan”). The Company established the Plan to provide employees with the opportunity to accumulate pre-tax assets, and to provide employer contributions for eligible employees for their retirement and other needs. It is intended to be administered in accordance with all applicable federal laws and regulations. The Plan covers substantially all employees not otherwise covered by plans resulting from collective bargaining agreements. The Plan permits employees to defer a portion of their compensation as a pre-tax deferral up to statutory maximums. Effective July 2016 through December 31, 2018 (the "401(k) Plan"), the Company made a matching contribution for eligible salaried employees as follows: 50% matching contribution for an employee contribution of up to 4% of compensation. Pursuant to the 401(k) Plan, eligible employees were 100% vested in the portion of their accounts derived from the Company’s matching contributions. Matching contributions for the years ended December 31, 2018, 2017 and 2016 were approximately $1.4 million, $0.2 million and $0.1 million, respectively. As of December 31, 2018, the Plan had approximately 1,000 participants.

Note M. Income Taxes

The Tax Cuts and Jobs Act (the "2017 Tax Act") was signed into law on December 22, 2017. The major components of the 2017 Tax Act, were effective January 1, 2018 and significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions and introducing new tax regimes. The 2017 Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. In response to U.S. tax reform, the Staff of the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB No. 118”) to provide guidance to registrants in applying ASC Topic 740 in connection with U.S. tax reform. SAB No. 118 provides that in the period of enactment, the income tax effects of U.S. tax reform may be reported as a provisional amount based on a reasonable estimate (to the extent a reasonable estimate can be determined), which would be subject to adjustment during a “measurement period.” The measurement period begins in the reporting period of the U.S. tax reform’s enactment and ends when a registrant has obtained, prepared and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. The primary impact of the 2017 Tax Act was the remeasurement of the Company’s deferred tax assets, based upon the new U.S. statutory corporate tax rate of 21% and the required change to the related valuation allowance. Due to the Company’s operating losses and full valuation allowance, the 2017 Tax Act did not materially impact the 2018 and 2017 operating results or income tax expense. As of December 31, 2018, the Company has finalized its analysis of the Act and determined that due to limitations on interest expense and net operating loss carryforwards, a $0.1 million deferred tax liability was recorded.

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Empire and all of its subsidiaries file a consolidated income tax return. At December 31, 2018 and 2017, the estimated deferred income tax assets and liability were comprised of the following:

	12/31/2018			12/31/2017
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$87,181			$40,502
Stock—based compensation	1,911			2,097
Development costs	619			27,213
Deferred interest	11,494			—
Deferred compensation	590			68
Depreciation	5,604			376
Other	907			952
	108,306			71,208
Deferred tax liability:
Depreciation	(2,037		)	—
Net deferred tax assets	106,269			71,208
Valuation allowance	(106,378		)	(71,208		)
Deferred tax liability, net	$	(109	)	$	—

The valuation allowance increased approximately $35.2 million during the year ended December 31, 2018, primarily due to the increase in the net loss in 2018. The valuation allowance decreased approximately $17.7 million during the year ended December 31, 2017, primarily due to the impact of the remeasurement of the net deferred tax assets, based upon the new U.S. statutory corporate tax rate of 21%, offset by current year activity which increased the net deferred tax assets prior to their remeasurement for the new tax rate. Of the $354.2 million in net operating loss carryforwards, approximately $278.0 million is readily available as of December 31, 2018.

There are limits on the Company’s ability to use its current net operating loss carryforwards, potentially increasing the future tax liability of the Company if it were to generate taxable income. As of December 31, 2018, the Company had federal net operating loss carryforwards of approximately $152.1 million that expire between 2019 and 2037, approximately $249.1 million of New York State net operating loss carryforwards that expire between 2019 and 2038 and approximately $202.1 million of federal net operating losses that are subject to an unlimited carryforward due to the enactment of the 2017 Tax Act. The 2004 merger of the Company’s operations with Catskills Development LLC and the investment by Kien Huat in 2009 will limit the amount usable in any year of its net operating losses due to the change in control of the Company within the meaning of the tax laws such that approximately $55.1 million of the limited federal net operating losses may expire unused prior to the 2019 through 2037 expiration.

The Company is in the process of completing a tax cost segregation study related to the construction of Resorts World Catskills. Individual deferred tax items that directly or indirectly relate to tax depreciation, including net operating loss carryforwards, development costs, depreciation and the corresponding valuation allowance, have been estimated based on currently available tax information. The estimation of these individual deferred items has no material impact to the total deferred taxes reflected on the December 31, 2018 balance sheet or the December 31, 2018 tax expense. The Company expects to complete the study during 2019, as part of its filing of its 2019 Federal and New York State income tax returns.   

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The following is a reconciliation of the federal statutory tax rate to the Company’s effective tax rate:

	Year ended December 31,
	2018		2017		2016
Tax provision at federal statutory tax rate	21.0	%	35.0	%	35.0	%
Non-deductible interest	—	%	—	%	(0.3	)%
Permanent items	(0.3	)%	(3.1	)%	(3.5	)%
Tax reform	(0.1	)%	—	%	—	%
Change in valuation allowance	(20.7	)%	(31.9	)%	(31.2	)%
Effective tax rate	(0.1	)%	—	%	—	%

As of December 31, 2018, the Company does not have any uncertain tax positions. As a result, there are no unrecognized tax benefits as of December 31, 2018. If the Company was to incur any interest and penalties in connection with income tax deficiencies, the Company would classify interest within interest expense and classify penalties as selling, general and administrative expenses within the consolidated statement of operations.

The Company files tax returns in the U.S. federal jurisdiction, as well as in New York and Delaware. All of its federal and state tax filings as of December 31, 2017 have been timely filed. The Company is subject to U.S. federal or New York State income tax examinations by tax authorities for years after 2015 and 2014. During the periods open to examination, the Company has net operating loss and tax credit carryforwards that have attributes from closed periods. Since these net operating loss and tax credit carryforwards may be utilized in future periods, they remain subject to examination.

Note N. Related Party Transactions

Moelis Agreements

2018 Moelis Letter Agreement

On August 7, 2018, the Company entered into an engagement agreement (the "2018 Moelis Letter 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 2018 Moelis Letter Agreement, Moelis was engaged as exclusive financial advisor with respect to a strategic financing transaction for the Company, if any. Pursuant to the 2018 Moelis Letter Agreement, we paid Moelis a retainer fee of $100,000 upon execution of the agreement. In the event a transaction were to be consummated, the 2018 Moelis Letter Agreement contemplated additional transaction-based fees would be earned by Moelis. On November 9, 2018, the Company and Moelis entered into an amendment (the “2018 Moelis Letter Agreement Amendment”) to the 2018 Moelis Letter Agreement. Pursuant to the 2018 Moelis Letter Agreement Amendment, the parties agreed no fee would be payable to Moelis in connection with any equity investment in connection with a strategic agreement relating to sports betting. In addition, pursuant to the 2018 Moelis Letter Agreement Amendment, the fee payable to Moelis with respect to the Collaboration Agreement was increased from $3 million to $4 million. In November 2018, the Company paid approximately $4.1 million to Moelis upon the consummation of the Collaboration Agreement to pay fees and expenses due. These fees were recorded as an adjustment to the proceeds of the common stock issued to bet365 (see Note I).

Moelis-Montreign Letter Agreement

In March 2017, Montreign Operating entered into an engagement agreement with Moelis (the "Moelis-Montreign Letter Agreement") pursuant to which it engaged Moelis to act as exclusive financial advisor to Montreign Operating. Pursuant to the Moelis-Montreign Letter Agreement, Moelis was entitled to an advisory fee of $100,000, which was paid upon execution, and the reimbursement of expenses up to $75,000. The Moelis-Montreign Letter Agreement expired on its terms on December 31, 2017.

On May 16, 2017, Moelis and the Company entered into a letter agreement reinstating and amending the 2013 Moelis Letter Agreement (as defined below) (the "Updated Moelis-Montreign Letter Agreement"). Pursuant to the Updated Moelis-Montreign Letter Agreement, Moelis was engaged to act as non-exclusive financial advisor to the Company in connection with certain debt and equity financing and corporate transactions the Company may undertake. The Updated Moelis-Montreign Letter Agreement described the fees due to Moelis for each transaction in which the Company engaged. If the Company engaged in a covered transaction at any time within 12 months of the termination of the Updated Moelis-Montreign Letter Agreement for any reason

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other than for cause by the Company, Moelis was entitled to receive a transaction fee according to the schedule provided therein. The Updated Moelis Letter Agreement expired on its terms on December 31, 2017. 

On May 26, 2017, in connection with the closing of the first amendment to the Term Loan Agreement, Moelis was paid approximately $178,000 for financial advisory services pursuant to the Updated Moelis-Montreign Letter Agreement.

2013 Moelis Letter Agreement

On December 9, 2013, the Company executed a letter agreement (the "2013 Moelis Letter Agreement") pursuant to which it engaged Moelis to act as its financial advisor in connection with the Casino. Pursuant to the 2013 Moelis Letter Agreement, we agreed to pay Moelis a retainer fee in the aggregate amount of approximately $250,000, of which approximately $150,000 was payable upon execution and $100,000 of which was paid within 90 days after execution. In the event a financing was consummated, the 2013 Moelis Letter Agreement contemplated additional transaction-based fees would be earned by Moelis.

At the close of the January 2016 Rights Offering, Moelis was paid approximately $2.1 million for financial advisory services in connection with the Casino pursuant to the 2013 Moelis Letter Agreement. These fees were included in "S,G&A Expense " on the Consolidated Statement of Operations for the year ended December 31, 2016.     

On January 24, 2017, in connection with the closing of the Term Loan Facility and the Revolving Credit Facility, Moelis was paid approximately $2.5 million for financial advisory services pursuant to the 2013 Moelis Letter Agreement. These fees were capitalized and included in "Debt Issuance Costs" which were netted against the Term Loan Facility on the consolidated balance sheet at December 31, 2017. The fees are included in "Interest Expense " on the consolidated statement of operations and are being amortized over the life of the Term Loan Facility.

Gregg Polle, a director of the Company, is a Managing Director of Moelis. Mr. Polle refrained from participating in the discussion of, and the determination of whether to enter into, each agreement.

Agreements with Kien Huat and Related Parties

2018 Kien Huat Preferred Stock Commitment Letter

On November 6, 2018, the Company and Kien Huat entered into a commitment letter (as amended and restated on November 9, 2018, the "2018 Kien Huat 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 2018 Kien Huat Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million (the "Commitment Amount") of Series F Preferred Stock on the terms set forth in the 2018 Kien Huat Preferred Stock Commitment Letter. Kien Huat committed to purchase 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 2018 Kien Huat 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 each of November 13, 2018 and February 20, 2019, in accordance with the 2018 Kien Huat Preferred Stock Commitment Letter, the Company and Kien Huat entered into subscription agreements to purchase an aggregate 320 shares of Series F Preferred Stock for an aggregate purchase price of $32 million and net proceeds to the Company (after deducting a $0.3 million funding fee due to Kien Huat) of $31.7 million.

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 right to use the RWS

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Licensed Marks may be assigned or sub-licensed only in certain limited circumstances. However, any use of the RWS Licensed Marks for a purpose other than the Permitted Uses will require the prior written consent of RWS. 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 on-line 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. Montreign Operating’s rights and obligations under the RWS License Agreement are subject to and governed by the rules and regulations applicable to Montreign Operating’s gaming operations at the Casino, and the fiduciary obligations of the boards of directors of Montreign Operating and Empire, as well as the fiduciary obligations of Kien Huat. 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 Alder 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 incurred an expense of approximately $1.5 million for the year ended December 31, 2018, reflecting the fee payable pursuant to the RWS License Agreement of which $0.9 million was payable at December 31, 2018.

During the term of the RWS License Agreement, Montreign Operating may participate in the Genting Rewards Alliance loyalty program (the “Alliance”), which will provide central marketing and cross-promotion opportunities for the Development Projects with other members of the Alliance. Montreign Operating’s participation in the Alliance is subject to the provisions of a separate agreement, which is currently being negotiated by the parties.

Mr. Lim, our Director, is also a director of Resorts World Inc. Pte Ltd., the parent company of RWS.

Kien Huat Letter Agreement

On February 17, 2016, Kien Huat and the Company entered into a letter agreement (the "Kien Huat Letter Agreement") pursuant to which, during the period commencing on February 17, 2016 and ending on the earlier of (i) the three-year anniversary of the closing of the January 2016 Rights Offering and (ii) the one-year anniversary of the opening of the Casino, Kien Huat has agreed not to take certain actions with respect to the Company. In particular, during such time period, Kien Huat has agreed not to, and to cause the Kien Huat Parties not to, take certain actions in furtherance of a “going-private” transaction (as such term is defined in the Kien Huat Letter Agreement) involving the Company unless such transaction is subject to the approval of (x) holders of a majority of the votes represented by the common stock, Series B Preferred Stock and any other capital stock of the Company entitled to vote together with the common stock in the election of the Board (other than any such capital stock owned by any Kien Huat Parties) and (x) either (A) a majority of disinterested members of the Board or (y) a committee of the Board composed of disinterested members of the Board. In addition, during such period, the Company and Kien Huat have agreed to cooperate to ensure that, to the greatest extent possible, the Board includes no fewer than three independent directors (the definition of independence as determined under the standards of The Nasdaq Stock Market or any other securities exchange on which the common stock of the Company is then listed).

On December 28, 2017, the Company and Kien Huat amended the Kien Huat Letter Agreement to extend by one year Kien Huat’s obligation not to engage in a going-private transaction with the Company without the prior approval of the majority of the Company’s minority shareholders and a majority of the disinterested directors of the Company. As a result of the amendment, such restriction now covers a period ending on February 8, 2020. Other than this one-year extension, all other terms of the Kien Huat Letter Agreement remain unchanged.

2015 Kien Huat Commitment Letter

To support the Company's financing needs for the Development Projects, Kien Huat entered into a series of commitment letters with the Company, which was last amended on September 22, 2015 (as amended, the "2015 Kien Huat Commitment Letter"). Pursuant to the 2015 Kien Huat Commitment Letter, Kien Huat committed to an equity investment in the Company in the aggregate amount of $375 million in support of the Development Projects, the redemption of the Series E Preferred Stock and for working capital purposes. Kien Huat invested an aggregate of $340 million of such commitment pursuant to the standby purchase agreements relating to rights offerings conducted by the Company in 2015 and 2016. Kien Huat also agreed to participate in, and backstop, a follow-on rights offering on the same terms and conditions and at the same subscription price as the rights offering conducted by the Company in 2016, in an amount not to exceed $35 million (the "Follow-On Rights Offering").

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In connection with the Kien Huat Note Exchange Agreement (as defined and discussed in Note H above), on December 28, 2017, the Company and Kien Huat further amended the 2015 Kien Huat Commitment Letter (the "2015 Kien Huat Commitment Amendment"). Pursuant to the 2015 Kien Huat Commitment Amendment, Kien Huat’s obligation to participate in, and backstop the Follow-On Rights Offering was terminated. Other than the termination of such follow-on standby purchase commitment, all other terms of the 2015 Kien Huat Commitment Letter remain unchanged.

Kien Huat Investment Agreement

On August 19, 2009, the Company entered into the 2009 Investment Agreement with Kien Huat, pursuant to which we issued 6,901,208 shares of common stock, representing just under 50% of our voting power at the time. Under the terms of the 2009 Investment Agreement, Kien Huat is entitled to recommend three directors whom we are required to cause to be elected or appointed to our Board, subject to the satisfaction of all legal and governance requirements regarding service as a member of our Board and to the reasonable approval of the Governance Committee of the Board of Directors. In 2017, Kien Huat recommended Messrs. Pearlman, Eller and Lim for appointment to the Board of Directors pursuant to the 2009 Investment Agreement. Kien Huat will continue to be entitled to recommend three nominees for directors for so long as it owns at least 24% of our voting power outstanding at such time, after which the number of directors whom Kien Huat will be entitled to designate for election or appointment to the Board of Directors will be reduced proportionally to Kien Huat’s percentage of ownership. Under the 2009 Investment Agreement, for so long as Kien Huat is entitled to designate nominees for directors to the Board, among other things, Kien Huat will have the right to nominate one of its nominees elected to serve as a director to serve as the Chairman of the Board, and Mr. Pearlman has been appointed to serve as Executive Chairman of the Board pursuant to Kien Huat’s recommendation. Until such time as Kien Huat ceases to own capital stock with at least 30% of our voting power outstanding at such time, the Board of Directors will be prohibited under the terms of the 2009 Investment Agreement from taking certain actions relating to fundamental transactions involving us and our subsidiaries and certain other matters without the affirmative vote of the directors nominated by Kien Huat.

Registration Rights

Pursuant to the terms of the 2009 Investment Agreement, on August 19, 2009, the Company entered into a Registration Rights Agreement with the Kien Huat (the “Registration Rights Agreement”). The Registration Rights Agreement provides, among other things, that Kien Huat may require that the Company file one or more “resale” registration statements, registering under the Securities Act of 1933, as amended, the offer and sale of all of the common stock issued or to be issued to Kien Huat pursuant to the 2009 Investment Agreement as well as any shares acquired by way of a share dividend or share split or in connection with a combination of such shares, recapitalization, merger, consolidation or other reorganization with respect to such shares. In addition, pursuant to the 2015 Kien Huat Commitment Letter, the Company agreed to register for resale all of the shares of common stock held by Kien Huat. On February 23, 2016, the Company filed a registration statement on Form S-3 (No. 333-309662) (the "Resale Registration Statement") registering for resale all of the shares of common stock held by Kien Huat. On August 7, 2018, the Company filed a Request to Withdraw the Resale Registration Statement. No securities were sold under the Resale Registration Statement.

Note O. Commitments and Contingencies

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.

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Operating Leases

The following table represents the minimum lease payments:

Year ending December 31,	Total Payments
	(in thousands)
2019	$10,382
2020	9,026
2021	8,503
2022	8,400
2023	8,400
2024 to 2056	353,449
Total	$398,160

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 for the lease of the parcel on which the Casino is being 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 December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1)	$7,500
2020 (1)	7,500
2021 (1)	8,000
2022 (1)	8,100
2023 (1)	8,100
2024 to 2056 (1)	$338,424

(1) From September 1, 2018 through the remainder of the term of the Casino Lease, fixed rent equals $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.

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Golf Course Lease

On December 28, 2015, ERREI entered into a sublease (the “Golf Course Lease”) with the 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 December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1) (2)	$63
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 (2)	150
2024 to 2056 (2) (3)	$7,483

(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 is $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.

The Alder Lease

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

The following table represents the future fixed rent payments under the Alder Lease at December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1) (2)	$150
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 (2)	150
2024 to 2056 (2) (3)	$7,542

(1) From the date the Alder Lease commenced (the “Alder Lease Commencement Date”) and until the date on which The Alder opened for business, which was January 1, 2019 (the “Alder Opening Date”), fixed rent payments were $0.

(2) From the Alder 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 Alder Lease, fixed rent will equal $250,000 per year.

The Alder Lease is a net lease and ERREII is obligated to pay the rent payable under the Alder Lease and other costs related to ERREII's use and operation of the Alder Parcel, including the special district tax assessments allocated to the Alder Parcel, not

87

to exceed the capped dollar amount applicable to the Alder Parcel. This obligation will not be assessed against ERREII prior to 60 months following the Alder Lease Commencement Date.

Purchase Option Agreement

On December 28, 2015, Montreign Operating and EPR entered into a Purchase Option Agreement (the “Purchase Option Agreement”), pursuant to which EPR granted to Montreign Operating the option (the “Purchase Option”) to purchase all, but not fewer than all, of the Development Project Parcels for a purchase price of $175 million, ($200 million after the sixth anniversary of the date the license was awarded, less a credit of up to $25 million for certain previous payments made by the Project Parties. The Purchase Option commenced on December 28, 2015 and will expire on the earlier to occur of (i) the natural expiration of the term of the Casino Lease and (ii) 90 days following the earlier termination of the Casino Lease, if otherwise terminated in accordance with its terms (the “Purchase Option Period”).

Under the Purchase Option Agreement, EPR also granted to Montreign Operating the option (the “Resort Project Purchase Option”) to purchase not less than all of the balance of the EPR Property, excluding the Development Project Parcels and the Waterpark (the “Resort Property”) for an additional fee. The Resort Project Purchase Option may be exercised only simultaneously with or after the exercise of the Purchase Option. The Resort Project Purchase Option commenced on December 28, 2015 and will expire on the earlier to occur of (a) the expiration of the Purchase Option Period or (b) March 1, 2026.

Under the Purchase Option Agreement, EPR also granted to Montreign a right of first offer (“ROFO”) with respect to all or any portion of the Resort Property. Under the terms of the ROFO, if EPR makes an offer to or rejects an offer made by Montreign Operating, then EPR will be precluded for a period of six months from transferring the designated portion of the Resort Property at a price and on terms which are on the whole substantially equivalent to or worse than those proposed or accepted by Montreign Operating. The ROFO commenced on December 28, 2015 and will continue in full force and effect until EPR has sold, leased, licensed or otherwise transferred all of the Resort Property.

Note P. Summarized Quarterly Data (Unaudited)

On March 12, 2019, the Company's management concluded that its previously filed interim consolidated financial statements as of and for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018 (“Restated Quarters”) should no longer be relied upon.    

For the year ended December 31, 2018, the Company reviewed certain technical accounting guidance during its year-end review process related to the accounting for stock granted and an associated guaranty obligation with MHHA in February 2018. Based on this review, the Company concluded that the previously recorded accounting treatment recorded in the first quarter of 2018 was not appropriate. As a result, the Company determined that the previously issued quarterly financial statements for the quarterly periods ending March 31, June 30, and September 30, 2018 should be restated to properly reflect the accounting for this transaction for these periods.

On November 1, 2014, MRMI, a wholly-owned subsidiary of Empire and the MHHA entered into an agreement that governs the conduct of MRMI and MHHA relating to horseracing purse payments, the simulcasting of horse races and certain other payments (the "2014 MHHA Agreement"). Pursuant to the 2014 MHHA Agreement and that certain Securities Acquisition Agreement, dated March 3, 2014, between Empire and MHHA (the “MHHA SAA”), on March 16, 2018, Empire issued to MHHA 200,000 shares of common stock (the "MHHA Shares"), and on March 15, 2018, Empire issued to MHHA a warrant to purchase 60,000 shares of common stock at $81.50 per share (the “MHHA Warrants”). The funds generated from the sale of the MHHA Shares or the sale of any shares acquired by MHHA upon the exercise of the MHHA Warrants will be deposited into a purse account for the benefit of MHHA and its members. If, on February 8, 2025, the value of any MHHA Shares previously sold by MHHA and the fair market value of any MHHA Shares not sold by MHHA by February 8, 2025 is less than $5.5 million, then the Company agreed to deposit into the special purse account an amount equal to the difference between $5.5 million and the value of the shares of common stock sold by MHHA and not sold by MHHA.

Upon satisfaction of the conditions contained in the 2014 MHHA Agreement and the MHHA SPA, the Company issued the MHHA Shares and the MHHA Warrants on March 16, 2018 and March 15, 2018, respectively. On the date of issuance, the Company determined that the MHHA Shares had a fair value of $4.7 million, which had been recorded as a long-term asset, net of $1.4 million which was previously expensed through March 2018. In preparing its audited financial statements for the year ended December 31, 2018, the Audit Committee and management of the Company determined that based on further review of applicable technical accounting literature, the value of the MHHA Shares should be recognized as an expense upon issuance and the associated fair value of the guaranty liability of $5.5 million should be recognized as a liability-classified guaranty.   

88

      The restatement of the Company's consolidated financial statements for the Restated Quarters is set forth below in the tabular presentation.

The effect of the restatement to relevant financial line items included on the previously issued unaudited interim consolidated financial statements for the quarterly period ended March 31, 2018 was as follows:

Consolidated Balance Sheet			At March 31, 2018
	As Reported		Adjustments		As Restated
Assets			($ in thousands)
Total current assets	$39,458		—		$39,458
Other assets	3,592		(3,358	)	234
Total assets	$818,552		$(3,358)		$815,194
Liabilities and Stockholders’ equity
Current liabilities:
Total current liabilities	$93,299		—		$93,299
Other long-term liabilities	7,905		1,964		9,869
Total liabilities	564,251		1,964		566,215
Stockholders’ equity:
Accumulated deficit	(322,029	)	(5,322	)	(327,351	)
Total stockholders’ equity	254,301		(5,322	)	248,979
Total liabilities and stockholders’ equity	$818,552		$(3,358)		$815,194

Consolidated Statement of Operations and Comprehensive Loss	For the three months ended March 31, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$33,522		—		$33,522
Costs and expenses:
Selling, general and administrative	8,084		5,097		13,181
Total costs and expenses	52,413		5,097		57,510
Loss from operations	(18,891	)	(5,097	)	(23,988	)
Other income (expense)	—		(225	)	(225	)
Loss before income taxes	(20,911	)	(5,322	)	(26,233	)
Net loss	(20,911	)	(5,322	)	(26,233	)
Net loss applicable to common stockholders	$(20,943)		$(5,322)		$(26,265)
Weighted average common shares outstanding
Basic	32,538		—		32,538
Diluted	32,538		—		32,538
Loss per common share
Basic	$(0.64)		$(0.16)		$(0.81)
Diluted	$(0.64)		$(0.16)		$(0.81)
Comprehensive loss:
Net loss	$(20,911)		$(5,322)		$(26,233)
Unrealized income on Interest Rate Cap	115		—		115
Comprehensive loss	$(20,796)		$(5,322)		$(26,118)

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Consolidated Statement of Cash Flows	For the three months ended March 31, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(20,911)		$(5,322)	$(26,233)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	697		5,097	5,794
Changes in operating assets and liabilities:
Accrued expenses and other liabilities	10,174		225	10,399
Net cash used in operating activities	1,866		—	1,866
Net cash used in investing activities	(1,201	)	—	(1,201	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	10,923		—	10,923
Net increase/(decrease) in cash, cash equivalents and restricted cash	11,588		—	11,588
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$64,643		$—	$64,643

The effect of the restatement to relevant financial line items included on the previously issued unaudited interim consolidated financial statements for the quarterly period ended June 30, 2018 was as follows:

Consolidated Balance Sheet			At June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Current assets:
Total current assets	$29,828		—		$29,828
Other assets	3,471		(3,189	)	282
Total assets	$781,715		$(3,189)		$778,526
Liabilities and Stockholders’ equity
Total current liabilities	$93,817		—		$93,817
Other long-term liabilities	7,540		1,832		9,372
Total liabilities	564,101		1,832		565,933
Stockholders’ equity:
Accumulated deficit	(359,357	)	(5,021	)	(364,378	)
Total stockholders’ equity	217,614		(5,021	)	212,593
Total liabilities and stockholders’ equity	$781,715		$(3,189)		$778,526

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Consolidated Statement of Operations and Comprehensive Loss	For the three months ended June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$49,136		—		$49,136
Costs and expenses:
Selling, general and administrative	16,949		(169	)	16,780
Total costs and expenses	71,530		(169	)	71,361
Loss from operations	(22,394	)	169		(22,225	)
Other income (expense)	—		132		132
Loss before income taxes	(37,298	)	301		(36,997	)
Net loss	(37,298	)	301		(36,997	)
Net loss applicable to common stockholders	$(37,330)		$301		$(37,029)
Weighted average common shares outstanding
Basic	32,663		—		32,663
Diluted	32,663		—		32,663
Loss per common share
Basic	$(1.14)		$0.01		$(1.13)
Diluted	$(1.14)		$0.01		$(1.13)
Comprehensive loss:
Net loss	$(37,298)		$301		$(36,997)
Unrealized income on Interest Rate Cap	72		—		72
Comprehensive loss	$(37,226)		$301		$(36,925)

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Consolidated Statement of Operations and Comprehensive Loss	For the six months ended June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$82,658		—		$82,658
Costs and expenses:
Selling, general and administrative	25,033		4,928		29,961
Total costs and expenses	123,943		4,928		128,871
Loss from operations	(41,285	)	(4,928	)	(46,213	)
Other income (expense)	—		(93	)	(93	)
Loss before income taxes	(58,209	)	(5,021	)	(63,230	)
Net loss	(58,209	)	(5,021	)	(63,230	)
Net loss applicable to common stockholders	$(58,273)		$(5,021)		$(63,294)
Weighted average common shares outstanding
Basic	32,601		—		32,601
Diluted	32,601		—		32,601
Loss per common share
Basic	$(1.79)		$(0.15)		$(1.94)
Diluted	$(1.79)		$(0.15)		$(1.94)
Comprehensive loss:
Net loss	$(58,209)		$(5,021)		$(63,230)
Unrealized income (loss) on Interest Rate Cap	$187		—		$187
Comprehensive loss	$(58,022)		$(5,021)		$(63,043)

Consolidated Statement of Cash Flows	For the six months ended June 30, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(58,209)		$(5,021)	$(63,230)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	1,449		4,928	6,377
Accrued expenses and other liabilities	12,996		93	13,089
Net cash used in operating activities	(27,624	)	—	(27,624	)
Cash flows provided by (used in) investing activities:
Net cash used in investing activities	(1,257	)	—	(1,257	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	15,967		—	15,967
Net increase/(decrease) in cash, cash equivalents and restricted cash	(12,914	)	—	(12,914	)
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$40,141		—	$40,141

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The effect of the restatement to relevant financial line items included on the previously issued unaudited interim consolidated financial statements for the quarterly period ended September 30, 2018 was as follows:

Consolidated Balance Sheet			At September 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Current assets:
Total current assets	$37,772		—		$37,772
Other assets	3,307		(3,020	)	287
Total assets	$831,332		$(3,020)		$828,312
Liabilities and Stockholders’ equity
Current liabilities:
Total current liabilities	$100,199		—		$100,199
Other long-term liabilities	7,555		2,177		9,732
Total liabilities	646,463		2,177		648,640
Stockholders’ equity:
Accumulated deficit	(393,105	)	(5,197	)	(398,302	)
Total stockholders’ equity	184,869		(5,197	)	179,672
Total liabilities and stockholders’ equity	$831,332		$(3,020)		$828,312

Consolidated Statement of Operations and Comprehensive Loss	Three months ended September 30, 2018
	As Reported			Adjustments			As Restated
				($ in thousands)
Net revenues:	$59,948			—			$59,948
Costs and expenses:
Selling, general and administrative	19,754			(169		)	19,585
Total costs and expenses	77,838			(169		)	77,669
Loss from operations	(17,890		)	169			(17,721		)
Other income (expense)	—			(345		)	(345		)
Loss before income taxes	(33,716		)	(176		)	(33,892		)
Net loss	(33,716		)	(176		)	(33,892		)
Net loss applicable to common stockholders	$(33,748)			$(176)			$(33,924)
Weighted average common shares outstanding
Basic	32,689			—			32,689
Diluted	32,689			—			32,689
Loss per common share
Basic	$(1.03)			$(0.01)			$(1.04)
Diluted	$(1.03)			$(0.01)			$(1.04)
Comprehensive loss:
Net loss	$(33,716)			$(176)			$(33,892)
Unrealized income on Interest Rate Cap	39			—			39
Comprehensive loss	$	(33,677	)	$	(176	)	$	(33,853	)

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Consolidated Statement of Operations and Comprehensive Loss	Nine months ended September 30, 2018
	As Reported			Adjustments			As Restated
				($ in thousands)
Net revenues	$142,606			$0			$142,606
Costs and expenses:
Selling, general and administrative	44,787			4,759			49,546
Total costs and expenses	201,781			4,759			206,540
Loss from operations	(59,175		)	(4,759		)	(63,934		)
Other income (expense)	—			(438		)	(438		)
Loss before income taxes	(91,925		)	(5,197		)	(97,122		)
Income tax benefit	—			—			—
Net loss	(91,925		)	(5,197		)	(97,122		)
Dividends on preferred stock	(96		)	—			(96		)
Net loss applicable to common stockholders	$(92,021)			$(5,197)			$(97,218)
Weighted average common shares outstanding
Basic	32,653			—			32,653
Diluted	32,653			—			32,653
Loss per common share
Basic	$(2.82)			$(0.16)			$(2.98)
Diluted	$(2.82)			$(0.16)			$(2.98)
Comprehensive loss:
Net loss	$(91,925)			$(5,197)			$(97,122)
Unrealized income on Interest Rate Cap	226			—			226
Comprehensive loss	$	(91,699	)	$	(5,197	)	$	(96,896	)

Consolidated Statement of Cash Flows	For the nine months ended September 30, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(91,925)		$(5,197)	$(97,122)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	2,042		4,759	6,801
Accrued expenses and other liabilities	26,087		438	26,525
Net cash used in operating activities	(42,335	)	—	(42,335	)
Cash flows provided by (used in) investing activities:
Net cash used in investing activities	(20,252	)	—	(20,252	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	92,602		—	92,602
Net increase/(decrease) in cash, cash equivalents and restricted cash	30,015		—	30,015
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$83,070		$—	$83,070

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The following table summarizes the quarterly results of operations for the year ended December 31, 2017:

	Fiscal Quarter
	Quarter 1		Quarter 2		Quarter 3		Quarter 4
2017	(in thousands, except per share data)
Net revenues	$14,769		$17,186		$18,713		$15,183
Loss from operations	(6,356	)	(6,830	)	(6,844	)	(9,887	)
Net loss	(11,451	)	(11,916	)	(10,872	)	(12,105	)
Loss per common share:
Loss per common share, basic	$(0.37)		$(0.39)		$(0.35)		$(0.39)
Loss per common share, diluted	$(0.37)		$(0.39)		$(0.35)		$(0.39)

Note Q. Subsequent Events

MRMI Operations

On January 22, 2019, management of the Company notified employees of MRMI concerning the Company’s plans to cease VGM operations and food and beverage service at Monticello Casino and Raceway. The Company anticipates operations to cease on or about April 23, 2019.

Series F Preferred Stock Subscription

On February 20, 2019, pursuant to the KH 2018 Preferred Stock Commitment Letter, the Company and Kien Huat entered into a subscription agreement, pursuant to which Kien Huat purchased 200 shares of Series F Preferred Stock for an consideration of $20 million and net proceeds to the Company (after deducting a $200,000 funding fee due to Kien Huat) of $19.8 million.

2019 Moelis Letter Agreement

On February 15, 2019, the Company and Moelis entered into a letter agreement (the “2019 Moelis Letter Agreement”), pursuant to which Moelis will act as the Company’s financial advisor to review and analyze the Company's historical results, financial projections and business plan, conduct a business and financial analysis of the Company's prospective online gaming and sports betting business, and evaluate the capital structure of the Company and/or its subsidiaries. Pursuant to the 2019 Moelis Letter Agreement, we paid Moelis a general advisory fee of approximately $350,000 upon execution of the agreement.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

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Item 9A. Controls and Procedures.

As of December 31, 2018, we carried out an evaluation under the supervision and with the participation of management, including our Chief Executive Officer and 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 Chief Executive Officer and Chief Accounting Officer concluded that our disclosure controls and procedures were not effective at December 31, 2018.

The evaluation of Empire Resorts, Inc.’s disclosure controls and procedures and internal control over financial reporting included a review of our objectives and processes, implementation by us and the effect on the information generated for use in this Annual Report. In the course of this evaluation and in accordance with Section 302 of the Sarbanes Oxley Act of 2002, we sought to identify material weaknesses in our controls, to determine whether we had identified any acts of fraud involving personnel who have a significant role in our internal control over financial reporting that would have a material effect on our consolidated financial statements, and to confirm that any necessary corrective action, including process improvements, were being undertaken. Our evaluation of our disclosure controls and procedures is done quarterly and management reports the effectiveness of our controls and procedures in our periodic reports filed with the Securities and Exchange Commission. Our internal control over financial reporting is also evaluated on an ongoing basis by our internal auditors and by other individuals in our organization. The overall goals of these evaluation activities are to monitor our disclosure controls and procedures and internal control over financial reporting and to make modifications as necessary. We periodically evaluate our processes and procedures and make improvements as required.

In connection with the restatement discussed in Note P, "Summarized Quarterly Data ("Unaudited)," under the supervision and with the participation of the Chief Executive Officer and Chief Accounting Officer, management reevaluated Empire Resorts, Inc.'s disclosure controls and procedures as of March 31, 2018, June 30, 2018 and September 30, 2018. During its reevaluation, management identified a material weakness in internal control over financial reporting that resulted in the recognition of expenses associated with the Company's issuance of the MHHA Shares. The Company's Chief Executive Officer and Chief Accounting Officer concluded that, as a result, the Company's disclosure controls and procedures were not effective at a reasonable assurance level as of March 31, 2018, June 30, 2018 and September 30, 2018 and December 31, 2018.

Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. Management applies its judgment in assessing the benefits of controls relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

Disclosure Controls and Procedures

Disclosure controls and procedures are designed with the objective of ensuring that (i) information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission and (ii) information is accumulated and communicated to management, including our Chief Executive Officer and Chief Accounting Officer, as appropriate to allow timely decisions regarding required disclosures. Based on their evaluation, our Chief Executive Officer and Chief Accounting Officer have concluded that our disclosure controls and procedures were not effective at December 31, 2018.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Accounting Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework 2013 framework (the "COSO criteria") issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on its initial evaluation under the COSO criteria, management concluded that Empire Resorts, Inc.'s internal control over financial reporting was effective as of March 31, 2018, June 30, 2018 and September 30, 2018. Subsequently, in March 2019, management concluded that the Company did not maintain effective controls with respect to the recognition of expenses associated with the Company's issuance of the MHHA Shares on its unaudited consolidated financial statements in the fiscal 2018 period. On March 12, 2019, the Company's Audit Committee authorized management to restate its unaudited consolidated financial statements for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018. Accordingly, management concluded that the control deficiency that

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resulted in the incorrect recognition of expenses associated with the issuance of the MHHA Shares constituted a material weakness as of March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018. Solely as a result of this material weakness, management has revised its earlier assessment and has now concluded that the Company's internal controls over financial reporting were not effective as of March 31, 2018, June 30, 2018 and September 30, 2018 and December 31, 2018.

Internal control over financial reporting is a process designed 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 and includes those policies and procedures that (a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (b) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorizations of the our management and directors; and (c) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Ernst & Young LLP, the Company’s independent registered public accounting firm that audited the consolidated financial statements included in this Annual Report on Form 10-K, issued an attestation report on the Company’s internal control over financial reporting within this report.

Remediation Plan

In 2018, in connection with the opening of the Casino, the internal control policies and procedures of the Company were expanded to address the increased scope of the Company's operations. To remediate the material weakness surrounding the presentation of the recognition of expenses associated with the issuance of the MHHA Shares, the Company has reviewed these internal controls and enhanced the supervisory review of accounting procedures in this financial reporting area. All necessary revisions are properly reflected in Note P, "Summarized Quarterly Data (Unaudited").

Changes in Internal Control over Financial Reporting

During the first quarter of 2018, in conjunction with the opening of the Casino, the Company implemented a new gaming management system and a new hotel management system at its wholly owned subsidiary Montreign Operating. The Company reviewed the implementation effort as well as the impact on its internal controls over financial reporting and, where appropriate, made changes to these controls over financial reporting to address these system implementations. The Company believes that the internal control changes resulting from the implementations will improve the overall control environment. Other than as described above, there were no other changes in the Company’s internal controls over financial reporting during the quarter ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting. However, as described above, management did implement changes in internal control over financial reporting during first quarter 2019 designed to remediate a material weakness solely related to the recognition of expenses associated with the issuance of the MHHA Shares.

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Item 9B. Other Information.

On March 11, 2019, the Company entered into an employment agreement with Nanette L. Horner, effective as of January 1, 2019 (the "Horner Employment Agreement") in connection with Ms. Horner's continued employment as Executive Vice President, Chief Counsel and Chief Compliance Officer. Ms. Horner's employment agreement provides for a term ending on January 4, 2021, unless the relationship is earlier terminated by either party in accordance with the provisions of the Horner Employment Agreement. Ms. Horner receives an annual base salary of $300,000, which may be adjusted at the discretion of the Board of Directors of the Company. In addition, Ms. Horner receives a travel and lodging allowance in the amount of $1,200 per month.

In the event that the Company terminates Ms. Horner's employment with Cause (as defined in the Horner Employment Agreement) or Ms. Horner resigns without Good Reason (as defined in the Horner Employment Agreement), the Company's obligations are limited generally to paying Ms. Horner her base salary, unpaid expenses and any benefits to which Ms. Horner is entitled through the termination date (collectively, "Accrued Obligations"). In the event Ms. Horner's employment is terminated as a result of death or disability, Ms. Horner or her estate, as the case may be, is entitled to receive the Accrued Obligations, any unvested equity award held by Ms. Horner will become vested immediately and any options held by Ms. Horner will remain exercisable through the remainder of their original term. In the event that the Company terminates Ms. Horner's employment without Cause or Ms. Horner resigns with Good Reason, the Company is obligated to pay (i) the Accrued Obligations, (ii) a pro rata portion of any bonus awarded pursuant to a bonus plan in which she is a participant (based on the days worked during the applicable year) and (iii) Ms. Horner's compensation for the lesser of (A) 18 months or (B) the remainder of the term of the Horner Employment Agreement and accelerate the vesting of any equity award granted at the direction of the Company's compensation committee, and any options held by Ms. Horner will remain exercisable through the remainder of their original term. In the event that the Company terminates Ms. Horner's employment without Cause or Ms. Horner resigns with Good Reason on or following a Change of Control (as defined in the Horner Employment Agreement), the Company is obligated to pay (i) the Accrued Obligations, (ii) a pro rata portion of any bonus awarded pursuant to a bonus plan in which she is a participant (based on the days worked during the applicable year), and (iii) Ms. Horner's compensation for the greater of (A) 24 months or (B) the remainder of the term of the Horner Employment Agreement and accelerate the vesting of any equity award granted to Ms. Horner at the discretion of the Company's compensation committee, and any options held by Ms. Horner will remain exercisable through the remainder of the original term.

The Company has agreed to customary indemnification for Ms. Horner for any claims arising out of her service to the Company. In addition, Ms. Horner has agreed to non-competition and non-solicitation provisions that extend for a post-termination period ranging from three months to one year following the date of termination depending on the reason for termination. Ms. Horner has also agreed to customary terms concerning the protection and confidentiality of company information.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

The remaining information required by this item concerning directors, executive officers and corporate governance matters is hereby incorporated by reference to the Company's definitive proxy statement for its 2019 Annual Meeting of Stockholders (the "2019 Proxy Statement"), to be filed with the U.S. Securities and Exchange Commission within 120 days after December 31, 2018, pursuant to Regulation 14A under the Securities Act. Information required by this item concerning executive officers is included in Part I of this Annual Report on Form 10-K.

Item 11. Executive Compensation

The information required by this item is hereby incorporated by reference to the 2019 Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management, and Related Stockholder Matters

The information required by this item is hereby incorporated by reference to the 2019 Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is hereby incorporated by reference to the 2019 Proxy Statement.

Item 14. Principal Accounting Fees and Services

The information required by this item is hereby incorporated by reference to the 2019 Proxy Statement.

PART IV

Item 15. Exhibits, Financial Statement Schedules.

Financial Statements

Schedule II—Valuation and Qualifying Accounts

Empire Resorts, Inc. and Subsidiaries

Valuation and Qualifying Accounts

December 31, 2018, 2017 and 2016

(in thousands)

Description	Balance at beginning of year		Addition charged to costs and expenses		Other additions (deductions)		Less deductions			Balance at end of year
Year ended December 31, 2018
Allowance for doubtful accounts	$	171	$	69	$	—	$	(90	)	$	150
Deferred tax asset valuation allowance	$	71,208	$	35,170	$	—	$	—		$	106,378
Year ended December 31, 2017
Allowance for doubtful accounts	$	171	$	—	$	—	$	—		$	171
Deferred tax asset valuation allowance	$	88,934	$	17,492	$	—	$	(35,218	)	$	71,208
Year ended December 31, 2016
Allowance for doubtful accounts	$	171	$	—	$	—	$	—		$	171
Deferred tax asset valuation allowance	$	86,092	$	—	$	2,842	$	—		$	88,934

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Exhibits

3.1	Second Amended and Restated Certificate of Incorporation, dated November 1, 2016. (1)
3.2	Third Amended and Restated By-Laws, as most recently amended on November 2, 2016. (2)
4.1	Form of Common Stock Certificate. (3)
4.2	Certificate of Designations, Preferences and Rights of Series B Preferred Stock, dated July 31, 1996. (4)
4.3	Certificate of Designation setting forth the Preferences, Rights and Limitations of Series B Preferred Stock and Series C Preferred Stock, dated May 29, 1998. (5)
4.4	Certificate of Amendment to the Certificate of Designation setting forth the Preferences, Rights and Limitations of Series B Preferred Stock and Series C Preferred Stock, dated June 13, 2001. (6)
4.5	Certificate of Designations setting forth the Preferences, Rights and Limitations of Series D Preferred Stock, dated February 7, 2000. (7)
4.6	Certificate of the Designations, Powers, Preferences and Rights of the Series E Preferred Stock, dated December 10, 2002. (8)
4.7	Certificate of Amendment of Certificate of the Designations, Powers, Preferences and Other Rights and Qualifications of the Series E Preferred Stock, dated January 12, 2004. (9)
4.8	Certificate of Designations of Series A Junior Participating Preferred Stock, dated March 24, 2008. (10)
4.9	Certificate of Amendment to the Certificate of Designations of Series A Junior Participating Preferred Stock, dated August 19, 2009. (11)

4.10	Common Stock Purchase Warrant by and between Empire Resorts, Inc. and Joseph Bernstein, to purchase 2,000,000 shares of Common Stock, dated as of May 11, 2010. (12)
4.11	Letter Agreement by and between Empire Resorts, Inc. and Kien Huat Realty III Limited, dated as of February 17, 2016 (13)
4.12	Amendment to Letter Agreement by and between Empire Resorts, Inc. and Kien Huat Realty III Limited, dated as of December 28, 2017 (14)
4.13 *	Common Stock Purchase Warrant by and between Empire Resorts, Inc. and Monticello Harness Horsemen's Association, to purchase 60,000 shares of Common Stock, dated March 15, 2018
4.14	Amendment and Restated Certificate of Designations of Series F Preferred Stock of Empire Resorts, Inc, dated November 9, 2018. (15)
10.1	Investment Agreement by and between Empire Resorts, Inc. and Kien Huat Realty III Limited, dated as of August 19, 2009 (16)
10.2	Registration Rights Agreement by and between Empire Resorts, Inc. and Kien Huat Realty III Limited, dated as of August 19, 2009 (17)
10.3	First Amendment and Clarification to the Investment Agreement by and between Empire Resorts, Inc. and Kien Huat Realty III Limited, dated as of September 30, 2009 (18)
10.4	Letter Agreement, dated December 31, 2015, by and between Empire Resorts, Inc. and Kien Huat Realty III Limited, relating to the Investment Agreement, dated August 19, 2009 (19)
10.5	Settlement Agreement and Release by and among Empire Resorts, Inc., Kien Huat, Kok Thay Lim, Au Fook Yew, G. Michael Brown, and Joseph Bernstein, dated as of May 11, 2010 (20)
10.6 +	Amended and Restated Master Development Agreement by and between Montreign Operating Company LLC, Empire Resorts Real Estate I, LLC, Empire Resorts Real Estate II LLC, EPT Concord II, LLC, EPR Concord II, L.P. and Adelaar Developer, LLC, dated as of December 28, 2015 (21)
10.7	First Amendment to Amended and Restated Master Development Agreement by and between Montreign Operating Company LLC, Empire Resorts Real Estate I, LLC, Empire Resorts Real Estate II LLC, EPT Concord II, LLC, EPR Concord II, L.P. and Adelaar Developer, LLC, dated as of January 24, 2017 (22)
10.8 +	Purchase Option Agreement by and between Montreign Operating Company LLC, EPT Concord II, LLC and EPR Concord II, L.P., dated as of December 28, 2015 (23)
10.9	First Amendment to Purchase Option Agreement by and between Montreign Operating Company LLC, EPT Concord II, LLC and EPR Concord II, L.P., dated as of January 24, 2017 (24)
10.10	Completion Guaranty by Empire Resorts, Inc. for the benefit of EPR Concord II, L.P., EPT Concord II, LLC, Adelaar Developer, LLC and EPR Properties, dated as of December 28, 2015 (25)
10.11	Completion Guaranty by EPR Properties for the benefit of Montreign Operating Company LLC, Empire Resorts Real Estate I, LLC, Empire Resorts Real Estate II, LLC and Empire Resorts, Inc., dated as of December 28, 2015 (26)
10.12 +	Lease by and between EPT Concord II, LLC and Montreign Operating Company, LLC, relating to the Casino Parcel ("Casino Lease"), dated as of December 28, 2015 (27)

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10.13	First Amendment to Casino Lease by and between EPT Concord II, LLC and Montreign Operating Company, LLC, dated as of January 24, 2017 (28)
10.14 +	Sub-Lease by and between Adelaar Developer, LLC and Empire Resorts Real Estate II, LLC, relating to The Alder Parcel ("The Alder Sublease"), dated as of December 28, 2015 (29)
10.15	First Amendment to The Alder Sublease by and between Adelaar Developer, LLC and Empire Resorts Real Estate II, LLC, dated as of January 24, 2017 (30)
10.16 +	Lease by and between Adelaar Developer, LLC and Empire Resorts Real Estate I, LLC, relating to the Golf Course Parcel (the "Golf Course Lease"), dated as of December 28, 2015 (31)
10.17	First Amendment to Golf Course Lease by and between Adelaar Developer, LLC and Empire Resorts Real Estate I, LLC, dated as of January 24, 2017 (32)
10.18	Empire Resorts, Inc. 2015 Amended and Restated Equity Incentive Plan (33)
10.19	Form of Option Award under the Empire Resorts, Inc. 2015 Equity Incentive Plan (34)
10.20	Form of Restricted Stock Award under the Empire Resorts, Inc. 2015 Equity Incentive Plan (35)
10.21	Form of Restricted Stock Unit Award under the Empire Resorts, Inc. 2015 Equity Incentive Plan (36)
10.22	Form of Stock Appreciation Right Award under the Empire Resorts, Inc. 2015 Equity Incentive Plan (37)
10.23	Form of Stock Award under the Empire Resorts, Inc. 2015 Equity Incentive Plan (38)
10.24	Empire Resorts, Inc. Nonqualified Deferred Compensation Plan, effective as of January 1, 2017 (39)
10.25	Employment Agreement by and between Empire Resorts, Inc. and Nanette L. Horner, dated as of August 22, 2012 (40)
10.26	Amendment No. 1 to Employment Agreement by and between Empire Resorts Inc. and Nanette L. Horner, dated as of May 30, 2014 (41)
10.27	Amendment No. 2 to Employment Agreement by and between Empire Resorts, Inc. and Nanette L. Horner, dated as of June 30, 2015 (42)
10.28 *	Employment Agreement by and between Empire Resorts, Inc. and Nanette L. Horner, dated March 11, 2019 and effective as of January 1, 2019
10.29	Employment Agreement, dated as March 27, 2017, by and between Empire Resorts, Inc. and Ryan Eller. (43)
10.30	Employment Agreement, effective December 12, 2017, by and between Empire Resorts, Inc. and Jamie M. Sanko (44)
10.31	Employment Agreement, effective December 12, 2017, by and between Empire Resorts, Inc. and Kevin D. Kline (45)
10.32	Building Term Loan Agreement among Montreign Operating Company, LLC, the Lenders and Credit Suisse AG, Cayman Islands Branch, dated as of January 24, 2017 (46)
10.33	Form of Term A Note (47)
10.34	Form of Term B Note (48)
10.35	Form of Subsidiary Guaranty made by Montreign Operating Company, LLC in favor of Credit Suisse AG, Cayman Islands Branch, dated as of January 24, 2017 (49)
10.36	Pledge and Security Agreement among Montreign Operating Company, LLC, the Grantors and Credit Suisse AG, Cayman Islands Branch, dated as of January 24, 2017 (50)
10.37	Equity Pledge Agreement by Montreign Holding Company, LLC as Pledgor and Credit Suisse AG, Cayman Islands Branch as Collateral Agent, dated as of January 24, 2017 (51)
10.38	Completion Guaranty by Empire Resorts, Inc. in favor of Credit Suisse AG, Cayman Islands Branch, dated as of January 24, 2017 (52)
10.39	Project Disbursement Agreement among Credit Suisse AG, Cayman Islands Branch as the Disbursement Agent, Credit Suisse AG, Cayman Islands Branch as the Administrative Agent, Credit Suisse AG, Cayman Islands Branch as the Collateral Agent, Montreign Operating Company, LLC as the Borrower and Empire Resorts Real Estate II, LLC as the EV Subsidiary, dated as of January 24, 2017 (53)
10.40	Building Loan Disbursement Agreement among Credit Suisse AG, Cayman Islands Branch as the Disbursement Agent, Credit Suisse AG, Cayman Islands Branch as the Administrative Agent, Credit Suisse AG, Cayman Islands Branch as the Collateral Agent, Montreign Operating Company, LLC as the Borrower and Empire Resorts Real Estate II, LLC as the EV Subsidiary, dated as of January 24, 2017 (54)
10.41	Revolving Credit Agreement among Montreign Operating Company, LLC, the Lenders and Fifth Third Bank, dated as of January 24, 2017 (55)
10.42	Form of Revolving Credit Facility Note (56)
10.43	Subsidiary Guaranty made by Montreign Operating Company, LLC in favor of Fifth Third Bank, dated as of January 24, 2017 (57)

101

10.44	Pledge and Security Agreement among Montreign Operating Company, LLC, each of the other Grantors and Fifth Third Bank, dated as of January 24, 2017 (58)
10.45	Equity Pledge Agreement by Montreign Holding Company, LLC as Pledgor and Fifth Third Bank as Collateral Agent, dated as of January 24, 2017. (59)
10.46	Loan Agreement between Montreign Holding Company, LLC and Kien Huat Realty III Limited, dated as of January 24, 2017 (60)
10.47	Form of Kien Huat-Montreign Promissory Note (61)
10.48	Pledge and Security Agreement by Empire Resorts, Inc. in favor of Kien Huat Realty III Limited, dated as of January 24, 2017 (62)
10.49+	RWS License Agreement, dated as of March 31, 2017, between Montreign Operating Company, LLC, an indirect, wholly-owned subsidiary of Empire Resorts, Inc., and RWS Services Pte Ltd. (63)
10.50	First Amendment to Building Term Loan Agreement, Building Loan Agreement and Project Disbursement Agreement, among Credit Suisse AG, Cayman Islands Branch as the Disbursement Agent, Credit Suisse AG, Cayman Islands Branch as the Administrative Agent, Credit Suisse AG, Cayman Islands Branch as the Collateral Agent, Montreign Operating Company, LLC as the Borrower and Empire Resorts Real Estate II, LLC as the EV Subsidiary, dated as of May 26, 2017 (64)
10.51	First Amendment to Revolving Credit Agreement among Montreign Operating Company, LLC, the Lenders and Fifth Third Bank, dated as of May 26, 2017 (65)
10.52	Second Amendment to Revolving Credit Agreement among Montreign Operating Company, LLC, the Lenders and Fifth Third Bank, dated as of December 7, 2017 (66)
10.53	Delayed Draw Term Credit Agreement among Empire Resorts, Inc., Bangkok Bank PLC, New York Branch, and Monticello Raceway Management, Inc., as guarantor, dated as of December 28, 2017 (67)
10.54	Loan Agreement by and between Empire Resorts, Inc. and Kien Huat Realty III Limited ("Backstop Loan Agreement"), dated as of December 28, 2017 (68)
10.55	Form of Promissory Note (issuable to Kien Huat Realty III Limited pursuant to the Backstop Loan Agreement) (69)
10.56	Note Exchange Agreement among Empire Resorts, Inc., Montreign Holding Company, LLC and Kien Huat Realty III Limited, dated as of December 28,2017 (70)
10.57	Subordinate Loan Agreement between Empire Resorts, Inc. and Kien Huat Realty III Limited ("Subordinate Loan Agreement"), dated as of June 25, 2018 (71)
10.58	Form of Subordinate Promissory Note issued pursuant to Subordinate Loan Agreement (72)
10.59	Amendment to Delayed Draw Term Credit Agreement among Empire Resorts, Inc., Bangkok Bank PLC, New York Branch, and Monticello Raceway Management, Inc., as guarantor, dated as of June 25, 2018 (73)
10.60 *	Sportsbook and Digital Gaming Collaboration Agreement between Empire Resorts, Inc. and Hillside (New York) LLC, dated as of November 14, 2018 +
10.61	Common Stock Purchase Agreement by and between Empire Resorts, Inc., and Hillside (New Media Holdings) Limited, dated as of November 14, 2018 (74)
10.62	Subscription Agreement by and between Empire Resorts, Inc. and Kien Huat Realty III Limited with respect to the purchase of Series F Preferred Stock, dated as of November 13, 2018 (75)
10.63	Subscription Agreement by and between Empire Resorts, Inc. and Kien Huat Realty III Limited with respect to the purchase of Series F Preferred Stock, dated as of February 20, 2019 (76)
10.64 *	Revolving Loan Agreement by and between Montreign Operating Company, LLC and Empire Resorts, Inc., dated as of November 30, 2018

14.1		Code of Business Conduct and Ethics. (77)
14.2		Code of Ethics for the Principal Executive Officer and Senior Financial Officer(s). (78)
21.1 *		List of Subsidiaries.
23.1 *	Consent of Ernst & Young LLP.
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 and Principal Financial Officer.
101		Interactive Data File (XBRL).

*    Filed herewith.

+ Confidential information has been omitted and confidential treatment has been granted with respect to the omitted

102

information.

(1) Incorporated by reference to Exhibit 3.1 to Empire Resorts, Inc.'s Form 10-K for the year ended December 31, 2016 (the "2016 10-K"), filed with the Commission on March 13, 2017.

(2) Incorporated by reference to Exhibit 3.2 of Empire Resorts, Inc.’s Current Report on Form 8-K (an “8-K”), filed with the Securities and Exchange Commission (the “Commission”) on November 2, 2016.

(3) Incorporated by reference to Exhibit 4.1 to the 2016 10-K.

(4) Incorporated by reference to Exhibit 4.2 to Empire Resorts, Inc.'s 10-K for the year ended December 31,

    2003 (the "2003 10-K"), filed with the Commission on March 30, 2004.

(5) Incorporated by reference to Exhibit 4.3 to the 2003 10-K.

(6) Incorporated by reference to Exhibit 4.4 to the 2003 10-K.

(7) Incorporated by reference to Exhibit 4 to Empire Resorts, Inc.'s 8-K, filed with the Commission on February 15, 2000.

(8) Incorporated by reference to Exhibit 4.5 to the 2003 10-K

(9) Incorporated by reference to Exhibit 4.6 to the 2003 10-K

(10) Incorporated by reference to Exhibit 3.1 to Empire Resort, Inc.’s 8-K, filed with the Commission on March 24, 2008.

(11) Incorporated by reference to Exhibit 4.1 to Empire Resorts, Inc.’s 8-K, filed with the Commission on August 19, 2009 (the "8/19/09 8-K").

(12) Incorporated by reference to Exhibit 4.10 to the Registration Statement on Form S-1, filed with the Commission on December 11, 2013.

(13) Incorporated by reference to Exhibit 4.1 to Empire Resorts, Inc.'s Current Report on Form 8-K, filed with the Commission on February 18, 2016.

(14) Incorporated by reference to Exhibit 4.1 to Empire Resorts, Inc.'s Current Report on Form 8-K, filed with the Commission on January 3, 2018.

(15) Incorporated by reference to Exhibit 3.1 to Empire Resorts, Inc.'s Current Report on Form 8-K, filed with the Commission on November 14, 2018.

(16) Incorporated by reference to Exhibit 10.1 of the 8/19/09 8-K.

(17) Incorporated by reference to Exhibit 10.2 to the 8/19/09 8-K

(18) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.’s 8-K, filed with the Commission on October 5, 2009 (the “10/5/09 8-K”).

(19) Incorporated by reference to Exhibit 10.4 to Empire Resorts, Inc.’s 10-K for the year ended December 31,

2015, filed with the Commission on March 10, 2016 (the “2015 10-K”).

(20)     Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.’s Quarterly Report on Form 10-Q (a

“10-Q”), filed with the Commission on May 17, 2010.

(21)     Incorporated by reference to Exhibit 10.12 to Empire Resorts, Inc.'s 2015 10-K.

(22)    Incorporated by reference to Exhibit 10.12 to Empire Resorts, Inc.'s 2016 10-K.

(23)     Incorporated by reference to Exhibit 10.13 to Empire Resorts, Inc.'s 2015 10-K.

103

(24)    Incorporated by reference to Exhibit 10.14 to Empire Resorts, Inc.'s 2016 10-K.

(25)     Incorporated by reference to Exhibit 10.14 to Empire Resorts, Inc.'s 2015 10-K.

(26)     Incorporated by reference to Exhibit 10.15 to Empire Resorts, Inc.'s 2015 10-K.

(27)     Incorporated by reference to Exhibit 10.16 to Empire Resorts, Inc.'s 2015 10-K.

(28)    Incorporated by reference to Exhibit 10.18 to Empire Resorts, Inc.'s 2016 10-K.

(29)     Incorporated by reference to Exhibit 10.17 to Empire Resorts, Inc.'s 2015 10-K.

(30)     Incorporated by reference to Exhibit 10.20 to Empire Resorts, Inc.'s 2016 10-K.

(31)    Incorporated by reference to Exhibit 10.18 to Empire Resorts, Inc.'s 2015 10-K.

(32)    Incorporated by reference to Exhibit 10.22 to Empire Resorts, Inc.'s 2016 10-K.

(33)    Incorporated by reference to Exhibit 10.26 to Empire Resorts, Inc.'s 2016 10-K.

(34)     Incorporated by reference to Exhibit 10.23 to the 2015 10-K.

(35)     Incorporated by reference to Exhibit 10.24 to the 2015 10-K.

(36)     Incorporated by reference to Exhibit 10.25 to the 2015 10-K.

(37)     Incorporated by reference to Exhibit 10.26 to the 2015 10-K.

(38)     Incorporated by reference to Exhibit 10.27 to the 2015 10-K.

(39)     Incorporated by reference to Exhibit 10.1 of Empire Resorts, Inc.’s 8-K, as filed with the Commission on

December 7, 2016

(40)     Incorporated by reference to Exhibit 10.2 to Empire Resorts, Inc.'s 8-K, filed with the Commission on

August 23, 2012.

(41)     Incorporated by reference to Exhibit 10.3 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

June 3, 2014.

(42)     Incorporated by reference to Exhibit 10.4 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

July 7, 2015.

(43)     Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

March 27, 2017.

(44)     Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

December 14, 2017.

(45)     Incorporated by reference to Exhibit 10.2 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

December 14, 2017.

(46)    Incorporated by reference to Exhibit 10.43 to the 2016 10-K.

(47)     Incorporated by reference to Exhibit 10.44 to the 2016 10-K.

(48)     Incorporated by reference to Exhibit 10.45 to the 2016 10-K.

(49)     Incorporated by reference to Exhibit 10.46 to the 2016 10-K.

104

(50) Incorporated by reference to Exhibit 10.47 to the 2016 10-K

(51)    Incorporated by reference to Exhibit 10.48 to the 2016 10-K.

(52)     Incorporated by reference to Exhibit 10.49 to the 2016 10-K.

(53)     Incorporated by reference to Exhibit 10.50 to the 2016 10-K.

(54)     Incorporated by reference to Exhibit 10.51 to the 2016 10-K.

(55) Incorporated by reference to Exhibit 10.52 to the 2016 10-K

(56)     Incorporated by reference to Exhibit 10.53 to the 2016 10-K.

(57)     Incorporated by reference to Exhibit 10.54 to the 2016 10-K.

(58) Incorporated by reference to Exhibit 10.55 to the 2016 10-K

(59)     Incorporated by reference to Exhibit 10.56 to the 2016 10-K.

(60)     Incorporated by reference to Exhibit 10.57 to the 2016 10-K.

(61) Incorporated by reference to Exhibit 10.58 to the 2016 10-K

(62) Incorporated by reference to Exhibit 10.59 to the 2016 10-K

(63) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 10-Q, for the quarter ended March

31, 2017, filed with the Commission on May 4, 2017.

(64)     Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

June 1, 2017.

(65)     Incorporated by reference to Exhibit 10.2 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

June 1, 2017.

(66)     Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

December 13, 2017.

(67)     Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

January 3, 2018.

(68)    Incorporated by reference to Exhibit 10.2 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

January 3, 2018.

(69)    Incorporated by reference to Exhibit 10.3 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

January 3, 2018.

(70)    Incorporated by reference to Exhibit 10.4 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

January 3, 2018.

(71) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

June 26, 2018

(72) Incorporated by reference to Exhibit 10.2 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

June 26, 2018

(73) Incorporated by reference to Exhibit 10.3 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

June 26, 2018

105

(74) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

November 14, 2018

(75) Incorporated by reference to Exhibit 10.2 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

November 14, 2018

(76) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.'s Form 8-K, filed with the Commission on

February 20, 2019

(77)     Incorporated by reference to Exhibit 14.1 to Empire Resorts, Inc.'s Current Report on Form 8-K/A, filed

with the Commission on November 16, 2011 (the "11/16/11 8-K").

(78)     Incorporated by reference to Exhibit 14.2 to the 11.16.11 8-K.

106

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly 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
	Date:	March 15, 2019

Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Ryan Eller	President, Chief Executive Officer and Director (Principal Executive Officer)	March 15, 2019
Ryan Eller
/s/ Jamie Sanko	Chief Accounting Officer (Principal Financial and Accounting Officer)	March 15, 2019
Jamie Sanko
/s/ Emanuel R. Pearlman	Executive Chairman of the Board	March 15, 2019
Emanuel R. Pearlman
/s/ Edmund Marinucci	Director	March 15, 2019
Edmund Marinucci
/s/ Keith L. Horn	Director	March 15, 2019
Keith L. Horn
/s/ Nancy A. Palumbo	Director	March 15, 2019
Nancy A. Palumbo
/s/ Gregg Polle	Director	March 15, 2019
Gregg Polle
/s/ Gerard Ewe Keng Lim	Director	March 15, 2019
Gerard Ewe Keng Lim

107

4.13	Common Stock Purchase Warrant by and between Empire Resorts, Inc. and Monticello Harness Horsemen's Association, to purchase 60,000 shares of Common Stock, dated March 15, 2018
10.28	Employment Agreement by and between Empire Resorts, Inc. and Nanette L. Horner, dated March 11, 2019 and effective as of January 1, 2019.
10.60 +	Sportsbook and Digital Gaming Collaboration Agreement by and between Empire Resorts, Inc. and Hillside (New York) LLC, dated as of November 14, 2018 +
10.64	Revolving Loan Agreement by and between Montreign Operating Company, LLC and Empire Resorts, Inc., dated as of November 30, 2018
23.1	Consent of Independent Registered Accounting Firm.
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 and Principal Financial Officer.
101	Interactive Data File (XBRL).

108

EX-4.13

EXECUTION VERSION

REVOLVING LOAN AGREEMENT

Dated as of November 30, 2018

between

MONTREIGN OPERATING COMPANY, LLC,
as Borrower,

and

EMPIRE RESORTS, INC.,
as Lender

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS

Section 1.01.Definitions    1

Section 1.02.General Construction    6

Section 1.03.Certain Terms    6

GENERAL TERMS 7

Section 2.01.The Loan    7

Section 2.02.[Reserved]    7

Section 2.03.Interest and Principal    7

Section 2.04.Method and Place of Payment    7

Section 2.05.General Provision Regarding Payments    8

Section 2.06.Application of Payments    8

ADVANCES 8

Section 3.01.Conditions to Advance    8

REPRESENTATIONS AND WARRANTIES 8

Section 4.01.Organization    8

Section 4.02.Authorization    9

Section 4.03.Enforceable Obligations    9

Section 4.04.Survival    9

AFFIRMATIVE COVENANTS 9

Section 5.01.Maintenance of Existence    9

Section 5.02.Use of Proceeds    9

GRANT OF SECURITY 9

Section 6.01.Grant of Security Interest; Collateral    9

Section 6.02.Certain Limited Exclusions; Authorization to File    10

EVENTS OF DEFAULT 11

i

TABLE OF CONTENTS(continued)

Page

Section 7.01.Event of Default    11

Section 7.02.Remedies    12

Section 7.03.No Waiver    13

Section 7.04.Application of Payments after an Event of Default    13

MISCELLANEOUS 13

Section 8.01.Successors    13

Section 8.02.Governing Law    13

Section 8.03.Modification; Waiver in Writing    14

Section 8.04.Notices    14

Section 8.05.[RESERVED]    15

Section 8.06.Headings    15

Section 8.07.No Assignment    15

Section 8.08.Expenses    15

Section 8.09.Severability    16

Section 8.10.[Reserved]    16

Section 8.11.[Reserved]    16

Section 8.12.Offsets, Counterclaims and Defenses    16

Section 8.13.[Reserved]    16

Section 8.14.[Reserved]    16

Section 8.15.[Reserved]    16

Section 8.16.Counterparts    16

Section 8.17.Register    16

Section 8.18.General Indemnity    17

Section 8.19.Third-Party Beneficiaries    18

Section 8.20.[Reserved]    18

Section 8.21.[Reserved]    18

Section 8.22.[Reserved]    18

ii

TABLE OF CONTENTS(continued)

Page

Section 8.23.PATRIOT Act Records    18

Section 8.24.Delay Not a Waiver    18

Section 8.25.Determinations    18

EXHIBIT A – Form of Request for Advance

iii

THIS REVOLVING LOAN AGREEMENT (this “Agreement”), is made as of November 30, 2018, between MONTREIGN OPERATING COMPANY, LLC, a New York limited liability company, as borrower (“Borrower”), and EMPIRE RESORTS, INC., a Delaware corporation, as lender (together with its successors and assigns, “Lender”). Lender and Borrower are hereinafter referred to collectively as the “Parties” or individually as a “Party”.

RECITALS

WHEREAS, Borrower desires to obtain from Lender the Loans (as hereinafter defined), the proceeds of which will be used for general corporate purposes as provided in this Agreement; and

WHEREAS, Lender is willing to make the Loans, on the terms and subject only to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the agreements, provisions and covenants contained herein, and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, Lender and Borrower agree as follows:

ARTICLE IDEFINITIONS

Section 1.01.Definitions. When used herein, the following capitalized terms shall have the following meanings:

“Affiliate” with respect to any Person means any Person directly or indirectly controlling, controlled by or under common control with, such Person. For the purposes of this Agreement, “control” (including, with correlative meaning, the terms “controlling” and “controlled”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Agreement” has the meaning specified in the preamble.

“Bank Loan Agreements” means, collectively, (i) the Term Loan Agreement and (ii) the Revolving Credit Agreement.

“Bankruptcy Code” has the meaning specified in Section 7.01(c).

“Borrower” has the meaning specified in the preamble.

“Business Day” means any day other than (i) a Saturday, (ii) a Sunday or (iii) a day on which federally insured depository institutions located in the State of New York are required or authorized by Law to close.

“Closing Date” shall mean the date hereof.

“Code” means the Internal Revenue Code of 1986, as amended, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

“Damages” to a Party means any and all liabilities, obligations, losses, demands, damages, penalties, assessments, actions, causes of action, judgments, proceedings, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including reasonable attorneys’ fees and other costs of defense and/or enforcement whether or not suit is brought), fines, charges, fees, settlement costs and disbursements imposed on, incurred by or asserted against such Party, whether based on any federal, state or foreign Laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and environmental Laws), on common law or equitable cause or on contract or otherwise.

“Dollars” or “$” means lawful money of the United States of America.

“Event of Default” has the meaning specified in Section 7.01.

“Excluded Accounts”means any Deposit Account or Securities Account holding (i) solely Cash and Cash Equivalents required pursuant to Gaming Laws or by Gaming Authorities to be deposited into Gaming Reserves to the extent that a security interest in such Deposit Account may not be granted under applicable Gaming Laws, (ii) solely Cash

2

and Cash Equivalents held, pursuant to ordinary course operations, in payroll accounts of Persons providing payroll services, (iii) solely Cash and Cash Equivalents on deposit in 401(k) accounts, trust accounts and pension accounts established in the ordinary course of business, (iv) solely Cash or Cash Equivalents on deposit in segregated accounts for the benefit of the New York State Gaming Commission established in the ordinary course of business, (v) solely proceeds of Indebtedness (as defined in the Term Loan Agreement) (and proceeds of such proceeds) incurred pursuant to Section 6.01(j) of the Term Loan Agreement that have been pledged to the providers of such Indebtedness, (vi) solely Cash and Cash Equivalents held in escrow, fiduciary or cash collateral accounts in the ordinary course of business, (vii) solely Cash and Cash Equivalents in a zero balance account, (viii) solely Cash and Cash Equivalents that do not exceed, at any time for all such Deposit Accounts, $100,000 individually or $500,000 in the aggregate, (ix) solely Cash and Cash Equivalents securing obligations under Hedging Agreements or (x) solely Cash and Cash Equivalents held for the purposes described in Section 5.15(b)(viii) of the Term Loan Agreement.

“Excluded Collateral” means (a) any license, permit, or authorization issued by any of the Gaming Authorities or any other Governmental Authority or any other assets (including any Gaming License and any Gaming Reserves, in each case, solely to the extent a security interest therein is prohibited under Gaming Laws or other applicable law, or under the terms of any such license, permit, or authorization, or which would require a consent, finding of suitability or other similar approval or procedure by any of the Gaming Authorities or any other Governmental Authority prior to being pledged, hypothecated, or given as collateral security (to the extent such consent, finding or approval has not been obtained); (b) any lease, license, contract or agreement to which Borrower is a party or any of its rights or interests thereunder if and for so long as the grant of a security interest therein shall (x) constitute or result in (i) the abandonment, invalidation or unenforceability of any right, title or interest of Borrower therein or (ii) a breach or termination pursuant to the terms of, or a default under, any such lease, license, contract or agreement or (y) pursuant thereto require any consent to assignment of such lease, license, contract or agreement from any Person which has not been obtained (unless, in the case of exclusions referred to in clauses (a) and/or (b) above, such law, rule, regulation, term, provision or condition would be rendered ineffective with respect to the creation of the security interest hereunder pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or any successor provision or provisions) of any relevant jurisdiction or any other applicable law (including any Debtor Relief Law) or principles of equity), provided,however, that the Collateral shall include (and such security interest shall attach) immediately at such time as the contractual or legal prohibitions described in clauses (a) and/or (b) above shall no longer be applicable and to the extent severable, shall attach immediately to any portion of such lease, license, contract, permit, authorization or agreement not subject to the prohibition specified above; (c) assets sold to a Person in compliance with the Loan Documents; (d) any Pledged Equity Interests (including for avoidance of doubt, any equity interest in Borrower’s subsidiaries); (e) assets subject to a Lien permitted by Section 6.02(m) of the Term Loan Agreement (including Specified FF&E Collateral) to the extent the documents related to such Lien prohibit the granting of a security interest under this Agreement; (f) any “intent-to-use” trademark application for registration of a trademark filed pursuant to Section 1(b) of the Lanham Act,

3

15 U.S.C. §1051, prior to the filing of a “Statement of Use” pursuant to Section 1(d) of the Lanham Act or an “Amendment to Allege Use” pursuant to Section 1(c) of the Lanham Act with respect thereto, to the extent and for so long as creation by Borrower of a security interest therein would impair the validity or enforceability of any registration that issues from such intent-to-use trademark application; (g) any Excluded Accounts; (h) any Excluded Leased Real Property; (i) any Specified Hedging Agreement or Specified Cash Management Agreement or any “Specified Cash Management Agreement” (as defined in the Revolving Credit Agreement); (j) any Cash Collateral (as defined in the Revolving Credit Agreement) pledged, delivered or deposited pursuant to Section 2.14(b), 2.22, 2.23 or 7.01 of the Revolving Credit Agreement as in effect on the Closing Date; and (k) any Deposit Account or Securities Account subject to a Control Agreement.  Notwithstanding the foregoing, all Proceeds and Sale Proceeds of the Excluded Collateral (other than those specified pursuant to clause (e) above) shall constitute Collateral and shall be included within the property and assets over which a security interest is granted pursuant to this Agreement, unless such Proceeds or Sale Proceeds would independently constitute Excluded Collateral.

“GAAP” means the generally accepted accounting principles in the United States of America in effect from time to time.

“Governmental Authority” means any nation or government, any state, county, regional, local or municipal government, any bureau, department, agency or other political subdivision thereof, including, without limitation, the New York State Gaming Commission, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government (including any court).

“Governmental Authorization” means any permit, license, authorization, plan, directive, consent order or consent decree of or from any Governmental Authority.

“Indebtedness” means the Principal Indebtedness, together with interest and all other obligations and liabilities of Borrower under the Loan Documents, including all transaction costs and other amounts due or to become due to Lender pursuant to this Agreement or in accordance with any of the other Loan Documents, and all other amounts, sums and expenses reimbursable by Borrower to Lender hereunder or pursuant to any other Loan Document.

“Indemnified Parties” has the meaning specified in Section 8.18.

“Interest Accrual Period” means the period commencing on and including the first day of each calendar quarter during the term of the Loan and ending on and including the last day of such calendar quarter; provided, however, that the initial Interest Accrual Period shall commence on and include the initial Advance hereunder and shall end on March 31, 2019.

“Interest Payment Date” means the last day of each calendar quarter beginning on March 31, 2019.

4

“Interest Rate” means an interest rate per annum equal to 7%, payable as follows on each Interest Payment Date: (i) 1% shall be paid in cash and (ii) 6% shall not be paid in cash, but shall accrue on such Interest Payment Date and remain outstanding thereafter until paid in full (it being understood that such accrued interest shall bear interest under this Agreement at the Interest Rate).

“Law” means any federal, state, local or foreign law, including common law, and any regulation, rule, requirement, policy, judgment, order, writ, decree, ruling, award, approval, authorization, consent, license, waiver, variance, guideline or permit of, or any agreement with, any Governmental Authority.

“Lender” has the meaning specified in the preamble.

“Lending Parties” has the meaning specified in Section 8.22.

“Loan” has the meaning specified in Section 2.01.

“Loan Amount” means $10,000,000.

“Loan Documents” means, collectively, this Agreement and any and all other documents and agreements executed in connection with the Indebtedness, as each such agreement may be modified, supplemented, consolidated, extended or reinstated from time to time.

“Material Adverse Effect” means a material adverse effect on and/or material adverse development with respect to (i) the business, results of operations, properties, assets or condition (financial or otherwise) of Borrower, (ii) the ability of Borrower to perform, or of Lender to enforce, any material provision of any Loan Document; or (iii) the legality, validity, binding effect, or enforceability of any material provision of any Loan Document.

“Maturity Date” means April 25, 2023 or such earlier date as may result from acceleration of the Loan in accordance with this Agreement.

“Notices” has the meaning specified in Section 8.04.

“Party” or “Parties” has the meaning specified in the preamble.

“PATRIOT Act” means the Uniting and Strengthening America by Providing Appropriate Tools Required To Intercept and Obstruct Terrorism Act (Title III of Pub. L. 107-56 (signed into Law on October 26, 2001)), as amended from time to time.

“Person” means an individual, corporation, association, limited liability company, limited liability partnership, partnership, estate, trust, unincorporated organization or a government or any agency or political subdivision thereof.

5

“Principal Indebtedness” means the principal balance of the Loan outstanding from time to time, and shall exclude, for avoidance of doubt, any accrued interest resulting from the application of clause (ii) of the definition of Interest Rate.

“Request for Advance” means a written request for an Advance, substantially in the form attached hereto as Exhibit A, and signed by a duly authorized representative of Borrower.

“Revolving Credit Agreement” means the Revolving Credit Agreement, dated as of January 24, 2017, among Borrower, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent.

“Taxes” means, collectively, all taxes, levies, duties, imposts, deductions, charges, fees or withholdings, and all interest, penalties and other liabilities imposed by a Governmental Authority or taxing authority in any jurisdiction.

“Term Loan Agreement” means the Building Term Loan Agreement, dated as of January 24, 2017, among Borrower, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch, as administrative agent.

“Term Loan Security Agreement” means the Pledge and Security Agreement dated as of January 24, 2017 among Borrower, each of the other parties thereto as a “Grantor” in favor of Credit Suisse AG, Cayman Islands Branch, in its capacity as collateral agent.

“UCC” means the Uniform Commercial Code as the same may, from time to time, be in effect in the State of New York; provided, however, in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of the security interest in any Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or priority and for purposes of definitions related to such provisions.

“U.S.” means the United States of America.

“U.S. Person” means a United States person within the meaning of Section 7701(a)(30) of the Code.

“U.S. Tax” means any present or future tax, assessment or other charge or levy imposed by or on behalf of the U.S. or any taxing authority thereof.

6

General Construction. Defined terms used in this Agreement may be used interchangeably in singular or plural form, and pronouns are to be construed to cover all genders. All references to this Agreement or any agreement or instrument referred to in this Agreement shall mean such agreement or instrument as originally executed and as hereafter amended, supplemented, extended, consolidated or restated from time to time. The words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular subdivision; and the words “Article” and “section” refer to the entire article or section, as applicable and not to any particular subsection or other subdivision. Reference to days for performance means calendar days unless Business Days are expressly indicated. All references to sections, schedules and exhibits are to sections, schedules and exhibits in or to this Agreement unless otherwise specified. Unless otherwise specified: (i) “including” means “including, but not limited to”. All accounting terms not specifically defined in this Agreement shall be construed in accordance with GAAP, as the same may be modified in this Agreement.

Section 1.02.Certain Terms.

(a)The following terms shall have the meanings specified in the Term Loan Agreement as in effect on the date hereof: Cash, Cash Equivalents, Control Agreement, Debtor Relief Law, Excluded Leased Real Property, Gaming Authorities, Gaming Laws, Gaming License, Gaming Reserves, Hedging Agreement, Lien, Revolving Specified Cash Management Agreement, Securities Account, Specified Cash Management Agreement, Specified FF&E Collateral, and Specified Hedging Agreement.

(b)The following terms, as used in Section 1.01 and in Article VI of this Agreement, shall have the meanings specified in the Term Loan Security Agreement as in effect on the date hereof, or, if not defined therein, the UCC: Accounts, Chattel Paper, Collateral Records, Collateral Support, Commercial Tort Claims, Deposit Account, Documents, General Intangibles, Goods, Instruments, Insurance, Intellectual Property, Investment Related Property, Letters of Credit, Letter-of-Credit Rights, Money, Pledged Equity Interests, Proceeds, Receivables, Receivable Records, Sale Proceeds, Software and Supporting Obligations.

ARTICLE IIGENERAL TERMS

Section 2.01.The Loan. Lender hereby agrees to make advances to Borrower (each, an “Advance” or a “Loan”) from time to time in accordance with and subject to the provisions of Article III in a maximum aggregate principal amount equal to the Loan Amount. The Loans shall bear interest as described in this Agreement at a per annum rate equal to the Interest Rate. Subject to the terms of this Agreement, Borrower may borrow, repay and reborrow Loans at any time.

Section 2.02.[Reserved].

Section 2.03.Interest and Principal.

(a)On each Interest Payment Date, Borrower shall pay to Lender interest accrued on the Loan, in arrears, for the immediately preceding Interest Accrual Period (except that on the initial Interest Payment Date, Borrower shall pay all interest accrued on the Loan from the date of the initial Advance until such date, even though such interest may have been accruing for more than one Interest Accrual Period) at a rate per annum equal to the Interest Rate. Interest payable hereunder shall compound quarterly and shall be computed on the basis of a 360-day year and the actual number of days elapsed.

(b)The Principal Indebtedness, together with interest through the end of the applicable Interest Accrual Period and all other amounts then due under the Loan Documents, shall be due and payable by Borrower to Lender on the Maturity Date.

(c)Borrower may permanently reduce the Loan Amount upon notice to Lender, in whole or in any partial amount; provided, however, that the Loan Amount may not be reduced below the aggregate amount of Principal Indebtedness.  Borrower agrees that if, at any time as a result of reductions in the Loan Amount pursuant to this Section 2.03(c) or otherwise, the aggregate amount of Principal Indebtedness exceeds the Loan Amount, Borrower shall repay immediately its then outstanding Loans in such amount as may be necessary to eliminate such excess.

(d)Borrower may from time to time pay, without penalty or premium, any amount of the Loans.

Section 2.04.Method and Place of Payment. Except as otherwise specifically provided in this Agreement, all payments and prepayments under this Agreement shall be made to Lender not later than 11:00 a.m., New York City time, on the date when due and shall be made in lawful money of the United States of America by wire transfer in federal or other immediately available funds to the account specified from time to time by Lender. Any funds received by Lender after such time shall be deemed to have been paid on the next succeeding Business Day. Lender shall notify Borrower in writing of any changes in the account to which payments are to be made. If the amount received from Borrower pursuant to this Agreement is less than the sum of all amounts then due and payable hereunder, such amount shall be applied, at Lender’s sole discretion, toward the components of the Indebtedness (e.g., interest, principal and other amounts payable hereunder) in such sequence as Lender shall elect in its sole discretion.

Section 2.05.General Provision Regarding Payments.

Except as otherwise provided herein, whenever any payment to be made hereunder shall be stated to be due on a day that is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder.

Section 2.06.Application of Payments.

Subject to Section 7.04, all payments or prepayments of the Loan made by Borrower shall be applied to pay: first, any costs, expenses and other amounts not constituting principal or interest which are then due Lender under this Agreement; second, any accrued and unpaid interest then payable with respect to the Loan; and third, the Principal Indebtedness of the Loan.

ARTICLE IIIADVANCES

Section 3.01.Conditions to Advance. Notwithstanding anything herein to the contrary, the only conditions to an Advance shall be satisfaction (as determined by Lender in its reasonable discretion) of the following requirements:

(a)Borrower shall have delivered a written Request for Advance to Lender and Lender shall have three (3) Business Days after the date on which Lender receives such notice to fund the Advance requested to be made (unless otherwise agreed to by Borrower);

(b)After giving effect to the requested Advance, the Principal Indebtedness shall not exceed the Loan Amount; and

(c)No Event of Default shall have occurred and be continuing on the date on which the Advance is requested to be made or would occur after giving effect to such Advance.

ARTICLE IVREPRESENTATIONS AND WARRANTIES

Borrower represents to Lender that, as of the Closing Date:

Section 4.01.Organization. Borrower is duly organized, validly existing and in good standing under the laws of the State of New York, and is in good standing in each other jurisdiction where ownership of its properties or the conduct of its business requires it to be so, and Borrower has all power and authority under such laws and its organizational documents and all material governmental licenses, authorizations, consents and approvals required to carry on its business as now conducted.

Section 4.02.Authorization. Borrower has the power and authority to enter into this Agreement and the other Loan Documents, to perform its obligations hereunder and thereunder and to consummate the transactions contemplated by the Loan Documents and has by proper action duly authorized the execution and delivery of the Loan Documents.

Section 4.03.Enforceable Obligations. This Agreement and the other Loan Documents have been duly executed and delivered by Borrower and constitute Borrower’s legal, valid and binding obligations, enforceable against Borrower in accordance with their respective terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar Laws of general applicability relating to or affecting creditors’ rights and to general equity principles. The Loan Documents are not subject to any right of rescission, set-off, counterclaim or defense by Borrower, including the defense of usury.

Section 4.04.Survival. Borrower agrees that all of the representations of Borrower set forth in this Agreement and in the other Loan Documents shall survive for so long as any portion of the Indebtedness is outstanding. All representations, covenants and agreements made by Borrower in this Agreement or in the other Loan Documents shall be deemed to have been relied upon by Lender notwithstanding any investigation heretofore or hereafter made by Lender or on its behalf.

ARTICLE VAFFIRMATIVE COVENANTS

Section 5.01.Maintenance of Existence. Borrower shall, at all times (i) preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization and (ii) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises (including all Governmental Authorizations) necessary in the normal conduct of its business.

Section 5.02.Use of Proceeds. The proceeds received by Borrower in connection with the Loans shall be used by Borrower for general corporate purposes.

ARTICLE VIGRANT OF SECURITY

Section 6.01.Grant of Security Interest; Collateral

Borrower hereby assigns as collateral security to Lender, and hereby grants to Lender, a security interest in and continuing lien on, all of Borrower’s right, title and interest in, to and under all personal property of Borrower including, without limitation, all of the following property of Borrower, in each case whether now owned or existing or hereafter acquired or arising and wherever located (collectively, but exclusive of any Excluded Collateral, the “Collateral”), for the prompt and complete payment and performance in full when due and with all rights and remedies under the UCC and other applicable law (whether at stated maturity, by required prepayment, declaration, acceleration, demand or otherwise) of Borrower’s Indebtedness: (i) Accounts; (ii) Chattel Paper; (iii) Documents; (iv) General Intangibles; (v) Goods; (vi) Instruments; (vii) Insurance; (viii) Intellectual Property; (ix) Software; (x) Investment Related Property; (xi) Letters of Credit and Letter-of-Credit Rights; (xii) Money; (xiii) Receivables and Receivable Records; (xiv) Commercial Tort Claims; (xv) Sale Proceeds; (xvi) to the extent not otherwise included above, all Collateral Records, Collateral Support and Supporting Obligations relating to any of the foregoing; and (xvii) to the extent not otherwise included above, all Proceeds, right to Proceeds, products, accessions, rents and profits of or in respect of any of the foregoing.

Section 6.02.Certain Limited Exclusions; Authorization to File

(a)Notwithstanding anything herein to the contrary, but subject to the last sentence of this Section 6.02(a), in no event shall the security interest granted under Section 6.01 above attach to any Excluded Collateral, and Collateral shall not include any Excluded Collateral. Notwithstanding the foregoing, all Proceeds of the Excluded Collateral and the right to receive such Proceeds shall constitute Collateral hereunder to the extent such Proceeds do not independently constitute Excluded Collateral and shall be included within the property and assets over which a security interest is granted under Section 6.01, except to the extent such Proceeds would constitute Excluded Collateral.

(b)The aggregate amount of Indebtedness and other liabilities secured by Liens pursuant to this Agreement shall not at any time exceed $10,000,000 (the “Collateral Limit”) and the amount of outstanding Indebtedness and other liabilities in excess of the Collateral Limit, if any, shall be deemed to be unsecured.

(c)The security interest and Lien granted to Lender pursuant to this Agreement is intended to be a perfected, second lien security interest and in no event shall be senior to the Liens securing the Obligations (as defined in each of the Bank Loan Agreements).

(d)Borrower hereby authorizes Lender (or its designee) to prepare and file financing statements provided for by the UCC with respect to the Collateral (including Financing Statements describing such property as “all assets” or “all personal property, whether now owned or hereafter acquired”) and to take such other action as may be required, in Lender’s sole judgment, in order to perfect and to continue the perfection of Lender’s Lien on the Collateral unless prohibited by law and subject to Liens relating to or permitted under the Bank Loan Agreements; provided, that Lender may not foreclose upon the Collateral prior to an Event of Default.

ARTICLE VIIEVENTS OF DEFAULT

Section 7.01.Event of Default. The occurrence of any one or more of the following events shall be, and shall constitute the commencement of, an “Event of Default” hereunder (any Event of Default that has occurred shall continue unless and until waived by Lender in writing in its sole discretion) and Lender shall be entitled to the remedies set forth in Section 7.02:

(a)Payment.

(i)Borrower shall default in the payment when due of any principal or interest owing hereunder (including any mandatory prepayment required hereunder); or

(ii)Borrower shall default, and such default shall continue for at least 5 Business Days after written notice to Borrower that such amounts are owing, in the payment when due of fees, expenses or other amounts owing hereunder or under any of the other Loan Documents (other than principal and interest owing hereunder).

(b)Revolving Loan Agreement. This Agreement shall fail to be in full force and effect or to convey the material rights, powers and privileges purported to be created thereby; or a default shall occur, in each case, beyond the expiration of any applicable cure period, which default shall have a Material Adverse Effect.

(c)Bankruptcy, Etc.

(i)Borrower shall commence a voluntary case concerning itself under Title 11 of the United States Code (as amended, modified, succeeded or replaced, from time to time, the “Bankruptcy Code”);

(ii)Borrower shall commence any other proceeding under any reorganization, arrangement, adjustment of debt, relief of creditors, dissolution, insolvency or similar Law of any jurisdiction whether now or hereafter in effect relating to Borrower, or shall dissolve or otherwise cease to exist;

(iii)there is commenced against Borrower an involuntary case under the Bankruptcy Code, or any such other proceeding, which remains undismissed for a period of thirty (30) days after commencement;

(iv)Borrower is adjudicated insolvent or bankrupt;

(v)Borrower suffers appointment of any custodian or the like for it or for any substantial portion of its property and such appointment continues unchanged or unstayed for a period of thirty (30) days after commencement of such appointment;

(vi)Borrower makes a general assignment for the benefit of creditors; or

(vii)any action is taken by Borrower for the purpose of effecting any of the foregoing.

(d)Other Covenants. A default shall occur in the due performance or observance by Borrower of any term, covenant or agreement (other than those referred to in any other subsection of this Section 7.01) contained in this Agreement or in any of the other Loan Documents, except that in the case of a default that can be cured by the payment of money, such default shall not constitute an Event of Default unless and until it shall remain uncured for 15 days after Borrower receives written notice thereof; and in the case of a default that cannot be cured by the payment of money but is susceptible of being cured within 30 days, such default shall not constitute an Event of Default unless and until it remains uncured for 30 days after Borrower receives written notice thereof, provided that within 5 days of its receipt of such written notice, Borrower delivers written notice to Lender of its intention and ability to effect such cure within such 30 day period; and if such non-monetary default is not cured within such 30 day period despite Borrower’s diligent efforts but is susceptible of being cured within 60 days of Borrower’s receipt of Lender’s original notice, then Borrower shall have such additional time as is reasonably necessary to effect such cure, but in no event in excess of 60 days from Borrower’s receipt of Lender’s original notice, provided that prior to the expiration of the initial 30 day period, Borrower delivers written notice to Lender of its intention and ability to effect such cure prior to the expiration of such 60 day period.

(e)Acceleration. Any indebtedness (other than the Indebtedness) of Borrower for borrowed money having an aggregate principal amount in excess of $10,000,000 individually or in the aggregate is declared to be due and payable or is required to be prepaid (other than by a regularly scheduled payment or a payment due on the voluntary termination of a capital lease) prior to the stated maturity thereof, or any payment obligation of Borrower under any such indebtedness (other than the Indebtedness) is not paid when due (after giving effect to any applicable grace period).

Section 7.02.Remedies.

(a)During the continuance of an Event of Default, Lender may by written notice to Borrower, in addition to any other rights or remedies available pursuant to this Agreement and any other Loan Documents, if any, at Law or in equity, declare by written notice to Borrower all or any portion of the Indebtedness to be immediately due and payable, whereupon all or such portion of the Indebtedness shall so become due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower (including all rights or remedies available at Law or in equity); provided,however, that, notwithstanding the foregoing, if an Event of Default specified in Section 7.01(d) shall occur, then the Indebtedness shall immediately become due and payable without the giving of any notice or other action by Lender. Any actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as Lender may determine in its sole discretion, to the fullest extent permitted by Law, without impairing or otherwise affecting the other rights and remedies of Lender permitted by Law, equity or contract or as set forth in this Agreement or in the other Loan Documents.

(b)During the continuance of any Event of Default, Lender may, but without any obligation to do so and without notice to or demand on Borrower and without releasing Borrower from any obligation hereunder, take any action to cure such Event of Default. The costs and expenses incurred by Lender in exercising rights under this Section (including reasonable attorneys’ fees) shall constitute a portion of the Indebtedness and shall be due and payable to Lender upon demand therefor.

Section 7.03.No Waiver. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed by Lender to be expedient. A waiver of any Default or Event of Default shall not be construed to be a waiver of any subsequent Default or Event of Default or to impair any remedy, right or power consequent thereon.

Section 7.04.Application of Payments after an Event of Default. Notwithstanding anything to the contrary contained herein, during the continuance of an Event of Default, all amounts received by Lender in respect of the Loan shall be applied at Lender’s sole discretion toward the components of the Indebtedness (e.g., Lender’s expenses in enforcing the Loan, interest, principal and other amounts payable hereunder); provided, that if an Event of Default specified in Section 7.01(a) shall occur, then Lender shall apply all amounts received by Lender in respect of the Loan towards the component of the Indebtedness for which Borrower’s failure to pay has resulted in the occurrence of such Event of Default.

ARTICLE VIIIMISCELLANEOUS

Section 8.01.Successors. Except as otherwise provided in this Agreement, whenever in this Agreement any of the parties to this Agreement is referred to, such reference shall be deemed to include the successors and permitted assigns of such party. All covenants, promises and agreements in this Agreement contained, by or on behalf of Borrower, shall inure to the benefit of Lender and its successors and assigns.

Section 8.02.Governing Law.

(a)THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN SHALL BE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTIONS EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, AND THE OTHER LOAN DOCUMENTS, IF ANY, AND THE OBLIGATIONS ARISING THEREUNDER AND HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CHOICE OF LAW RULES TO THE EXTENT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

(b)ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST EITHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, IF ANY, SHALL BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK. BORROWER HEREBY (i) IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM, (ii) IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (iii) IRREVOCABLY CONSENTS TO SERVICE OF PROCESS BY MAIL, PERSONAL SERVICE OR IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW, AT THE ADDRESS SPECIFIED IN SECTION 8.04 (AND AGREES THAT SUCH SERVICE AT SUCH ADDRESS IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER ITSELF IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT).

Section 8.03.Modification; Waiver in Writing. Neither this Agreement nor any other Loan Document nor any of the terms hereof or thereof may be amended, changed, waived, discharged or terminated, nor shall any consent or approval of Lender be granted hereunder, unless such amendment, change, waiver, discharge, termination, consent or approval is in writing signed by Lender.

Section 8.04.Notices. All notices, consents, approvals, reports, designations, requests, waivers, elections and other communications (collectively, “Notices”) authorized or required to be given pursuant to this Agreement shall be given in writing and either personally delivered to the Party to whom it is given or delivered by an established delivery service by which receipts are given or mailed by registered or certified mail, postage prepaid, or sent by facsimile or electronic mail with a copy sent on the following Business Day by one of the other methods of giving notice described herein, addressed to the Party at its address listed below. A Notice shall be deemed to have been given when delivered or upon refusal to accept delivery.

If to Borrower:

Montreign Operating Company, LLCc/o Monticello RacewayRoute 17BP.O. Box 5013Monticello, New York 12701Attention: Nanette HornerTelephone Number: (845) 794-4100, ext. 574Facsimile Number: (845) 807-0000

If to Lender:

Empire Resorts, Inc.
c/o Monticello Raceway
Route 17B
P.O. Box 5013
Monticello, New York 12701
Attention: Nanette Horner
Telephone Number: (845) 794-4100, ext. 574
Facsimile Number: (845) 807-0000

Either Party may change its address for the receipt of Notices at any time by giving Notice thereof to the other Party.

Section 8.05.[RESERVED]

Section 8.06.Headings. The Article and Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

Section 8.07.No Assignment. Neither Lender nor Borrower may sell, assign or transfer any interest in the Loan Documents or any portion thereof (including either Party’s respective rights, title, interests, remedies, powers and duties hereunder and thereunder).

Section 8.08.Expenses. Borrower shall reimburse Lender upon receipt of written notice from Lender for (i) all documented and reasonable out-of-pocket costs and expenses incurred by Lender (or any of its Affiliates) in connection with the origination of the Loan, including reasonable legal fees and disbursements, accounting fees and any other third-party diligence materials; (ii) all documented and reasonable out-of-pocket costs and expenses incurred by Lender (or any of its Affiliates) in connection with (A) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any other documents or matters requested by Borrower or by Lender and (B) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation, in each case against, under or affecting Borrower, this Agreement, or the other Loan Documents; and (iii) all documented and reasonable out-of-pocket costs and expenses (including attorney’s fees) incurred by Lender (or any of its Affiliates) in connection with the enforcement of any obligations of Borrower, or a Default by Borrower, under the Loan Documents, including any refinancing, restructuring, settlement or workout and any insolvency or bankruptcy proceedings (including any applicable transfer taxes).

Section 8.09.Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision of this Agreement shall be prohibited by or invalid under applicable Law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

Section 8.10.[Reserved].

Section 8.11.[Reserved].

Section 8.12.Offsets, Counterclaims and Defenses. All payments made by Borrower hereunder or under the other Loan Documents shall be made irrespective of, and without any deduction for, any setoffs or counterclaims. Borrower waives the right to assert a counterclaim, other than a mandatory or compulsory counterclaim, in any action or proceeding brought against it by Lender arising out of or in any way connected with this Agreement, the other Loan Documents or the Indebtedness. Any assignee of Lender’s interest in the Loan shall take the same free and clear of all offsets, counterclaims or defenses that are unrelated to the Loan.

Section 8.13.[Reserved].

Section 8.14.[Reserved].

Section 8.15.[Reserved].

Section 8.16.Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall together constitute one and the same instrument. Any counterpart delivered by facsimile, pdf or other electronic means shall have the same import and effect as original counterparts and shall be valid, enforceable and binding for the purposes of this Agreement.

Section 8.17.Register. Lender, as non-fiduciary agent of Borrower, shall maintain a record that identifies each owner (including successors and assignees) of an interest in the Loan, including the name and address of the owner, and each owner’s rights to principal and stated interest (the “Register”), and shall record all transfers of an interest in the Loan, including each assignment, in the Register. The entries in the Register shall be conclusive absent manifest error. Borrower and Lender shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. Failure to make any such recordation, or any error in such recordation, however, shall not affect Borrower’s obligations in respect of the Loan.

Section 8.18.General Indemnity.

(a)Borrower, at its sole cost and expense, shall protect, indemnify, reimburse, defend and hold harmless Lender and its officers, partners, members, directors, trustees, advisors, employees, agents, sub-agents, affiliates, successors, participants and assigns of any and all of the foregoing (collectively, the “Indemnified Parties”) for, from and against, and shall be responsible for, any and all Damages of any kind or nature whatsoever that may be imposed on, incurred by, or asserted against any of the Indemnified Parties, in any way relating to or arising out of (i) any negligence or tortious act or omission on the part of Borrower or any of its agents, contractors, servants or employees; (ii) any failure on the part of Borrower to perform or comply with any of the terms of the Loan Documents; and (iii) any failure of Borrower to comply with any Laws; provided, however, that no Indemnified Party shall have the right to be indemnified hereunder to the extent that such Damages have been found by a final, non-appealable judgment of a court of competent jurisdiction to have resulted from the gross negligence or willful misconduct of such Indemnified Party.

(b)If for any reason (including violation of Law or public policy) the undertakings to defend, indemnify, pay and hold harmless set forth in this Section 8.18 are unenforceable in whole or in part or are otherwise unavailable to Lender or insufficient to hold it harmless, then Borrower shall contribute to the amount paid or payable by Lender as a result of any Damages the maximum amount Borrower is permitted to pay under Law. The obligations of Borrower under this Section 8.18 will be in addition to any liability that Borrower may otherwise have hereunder and under the other Loan Documents, will extend upon the same terms and conditions to any Affiliate of Lender and directors, agents, employees and controlling persons (if any), as the case may be, of Lender and any such Affiliate, and will be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of Borrower, Lender, any such Affiliate and any such Person.

(c)At the option of the Indemnified Parties and in their sole discretion, upon written request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals reasonably approved by such Indemnified Party. Notwithstanding the foregoing, any Indemnified Party may engage its own attorneys and other professionals to defend or assist it (chosen at Lender’s sole discretion), and, at the option of such Indemnified Party, its attorneys shall control the resolution of any claim or proceeding. Upon demand, Borrower shall pay or, in the sole discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

(d)Any amounts payable to Lender by reason of the application of this Section 8.18 shall become immediately due and payable and shall bear interest from the date Damages are sustained by the Indemnified Parties until paid.

(e)The provisions of and undertakings and indemnification set forth in this Section 8.18 shall survive the satisfaction and payment in full of the Indebtedness and termination of this Agreement.

Section 8.19.Third-Party Beneficiaries. This Agreement and the other Loan Documents are solely for the benefit of Lender and Borrower, and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender, Borrower and Indemnified Parties any right to insist upon or to enforce the performance or observance of any of the obligations contained herein or therein. All conditions to the obligations of Lender to make the Loans hereunder are imposed solely and exclusively for the benefit of Lender, and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan in the absence of strict compliance with any or all thereof, and no other Person shall under any circumstances be deemed to be a beneficiary of such conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable to do so.

Section 8.20.[Reserved].

Section 8.21.[Reserved].

Section 8.22.[Reserved].

Section 8.23.PATRIOT Act Records. Lender hereby notifies Borrower that pursuant to the requirements of the PATRIOT Act, it is required to obtain, verify and record information that identifies Borrower, which information includes the name and address of Borrower and other information that will allow Lender to identify Borrower in accordance with the PATRIOT Act.

Section 8.24.Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder or under any other Loan Document, or under any other instrument given as security therefor, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any amount payable under this Agreement or any other Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount.

Section 8.25.Determinations. Each determination or calculation by Lender hereunder shall, in the absence of manifest error, be conclusive and binding on the Parties.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.

LENDER:

By:    EMPIRE RESORTS, INC.,     a Delaware corporation

By:    /s/ Ryan Eller                    Name: Ryan Eller    Title: President

BORROWER:

By:    MONTREIGN OPERATING COMPANY, LLC            a New York limited liability company

By:    /s/ Ryan Eller                    Name: Ryan Eller    Title: President

Exhibit A

Form of Request for Advance

Reference is made to that certain Revolving Loan Agreement dated as of November 30, 2018 (as the same may be amended, restated, supplemented or modified from time to time, the “Loan Agreement”) between Empire Resorts, Inc. (“Lender”), and Montreign Operating Company, LLC (“Borrower”). Terms not defined in this Request for Advance shall have the same meaning as in the Loan Agreement.

Borrower hereby represents, warrants and agrees as follows:

1. Borrower hereby requests funds in the sum of $_____.

2. All sums disbursed by Lender will be used in accordance with the Loan Agreement.

3. The proceeds of the Advance being requested hereby should be sent to:

[Account Name: Account Number: ABA Number: ]

[Remainder of Page Intentionally Left Blank; Signatures on Subsequent Page]

IN WITNESS WHEREOF, Borrower has duly executed this Request for Advance this ___ day of , 201_.

BORROWER:

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EX-10.28

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (the “Agreement”) is dated as of March 11, 2019 and effective as of January 1, 2019 (the “Commencement Date”), by and between Empire Resorts, Inc., a Delaware corporation (including its subsidiaries, the “Company”), and Nanette L. Horner (the “Executive”, and the Company and the Executive collectively referred to herein as “the Parties”).

W I T N E S S E T H:

WHEREAS, the Company desires to continue to employ the Executive as Executive Vice President, Chief Counsel and Chief Compliance Officer of the Company, and to enter into an agreement embodying the terms of such employment (this “Agreement”), and the Executive desires to continue employment with the Company, subject to the terms and conditions of this Agreement;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and promises of the Parties contained herein, the Parties, intending to be legally bound, hereby agree as follows:

1.            Term.  The term of employment under this Agreement shall be for the period beginning on the Commencement Date and ending on the close of business on January 4, 2021 (the “Term”), or such earlier date upon which the Executive’s employment is terminated by either Party in accordance with the provisions of this Agreement.

2.    Employment.

(a)    Position.  As of the Commencement Date, the Executive shall be employed as Executive Vice President, Chief Counsel and Chief Compliance Officer and/or such other title or titles as may be granted by the Company. The Executive shall perform such duties and responsibilities as may reasonably be assigned to her from time to time by the Company’s Chief Executive Officer and the Board of Directors of the Company (the “Board”) and, in the absence of such assignment, such duties as are customary and commensurate with the position held by the Executive.  The Executive agrees to comply with the Company’s written policies and procedures throughout the Term; provided, however, that if any such policy or procedure conflicts with the terms of this Agreement, the terms of this Agreement shall prevail. The Executive shall report to the Company’s Chief Executive Officer and to such officer(s) in positions senior to Executive as determined by the Chief Executive Officer, including officer positions created by the Board following the Commencement Date, and the Board.

(b)    Obligations.  The Executive agrees to (i) perform her duties faithfully and devote substantially all of her full business time and attention to the business and affairs of the Company; (ii)devote her skill and ability to promote the interests of the Company; and (iii) carry out her duties in a competent and professional manner. Anything herein to the contrary notwithstanding, nothing shall preclude the Executive from: (i) serving on the boards of directors of trade associations and/or charitable organizations; (ii) engaging in charitable activities and community affairs; and (iii) managing her personal investments and affairs, provided that the

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activities described in the preceding clauses (i) through (iii) do not materially interfere with the proper performance of her duties and responsibilities hereunder and do not prevent her from devoting substantially all of her full business time and attention to the affairs of the Company.

3.     Base Salary.  The Company agrees to pay or cause to be paid to the Executive during the Term a base salary (the base salary in effect shall be referred to herein as, the “Base Salary”), which shall be payable at the rate of Three Hundred Thousand Dollars ($300,000) per year for the Term. The Base Salary may further increase if, in their sole discretion, the Board shall determine based on a number of factors that the Executive's performance warrants such an increase.  Such Base Salary shall be payable, less applicable withholdings and deductions, in accordance with the Company’s reasonable and customary payroll practices applicable to its executive officers.

4.    Bonus.  The Executive shall be eligible to participate in any annual bonus plan maintained by the Company for executive officers commensurate with the position held by the Executive on such terms and conditions as may be determined from time to time by the Compensation Committee of the Board.  The payment of any such bonus shall be in the absolute discretion of the Board and based on a number of factors including but not limited to overall performance and profitability of the Company.

5.    Additional Incentive.

(a)    The Compensation Committee of the Board may, at the sole discretion of the Compensation Committee, grant Executive equity awards (each an “Award”) under the Empire Resorts, Inc. 2015 Equity Incentive Plan (the “2015 Plan”).  The terms of any Awards shall be as described in the award letter relating to each Award and the terms and conditions of the 2015 Plan, as applicable.  In the event of any conflict between the terms and provisions of this Section 5 and the 2015 Plan, as applicable, the 2015 Plan shall govern.

(b)    For the purposes of this Agreement, “Change in Control” shall have the same meaning as in the 2015 Plan.

(c)    Employee Benefits.  The Executive shall be eligible to participate in all employee benefit plans, practices and programs maintained by the Company and made available to executive officers commensurate with the position held by the Executive generally and as may be in effect from time to time, including any medical and health plans and any equity-based incentive programs that may be put into place, subject, however, to the terms and conditions of the various plans and programs and subject to the determinations of any person or committee administering such plans and programs. The Executive’s participation in such plans, practices and programs shall be on the same basis and terms as are applicable to executive officers of the Company commensurate with the position held by the Executive.  Such level of benefits shall be at a level commensurate with her position. For the avoidance of doubt, the Company shall be entitled to terminate or reduce any employee benefit enjoyed pursuant to the provision of this Section, if such reduction is applicable to all executives of the Company who are at a level commensurate with Executive’s position. Notwithstanding the foregoing, the Executive will not be eligible to participate in any severance

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plan of the Company. The Executive severance benefits, if any, are to be solely set forth in Sections Section 9(b)(ii) and (iii).

6.    Other Benefits.

(a)     Vacation.  During each calendar year of the Term, the Executive shall be eligible to accrue paid vacation up to twenty (20) days in accordance with the Company’s vacation policy for executive officers commensurate with the position held by the Executive, as it may be amended from time to time. The Executive agrees that vacation time isto be taken at such time(s) as shall not materially interfere with the Executive’s fulfillment of her duties hereunder.

(b)     Perquisites. The Executive shall be entitled to perquisites on the same basis as provided to other executive officers at the Company commensurate with the position held by the Executive. In addition to the foregoing and Section 7 below, the Executive shall be entitled to the following perquisite.

(i)Lodging and Travel Expense. Executive shall be entitled to receive a travel and lodging allowance in the amount of $1,200 per month, payable on a monthly basis, to reimburse Executive for gas, toll and lodging expenses incurred by Executive for travel to and from the Company’s corporate headquarters.

     7.    Expenses.  

(a)    The Executive shall be reimbursed on not less than a monthly basis for all reasonable, ordinary and necessary expenses incurred by her in connection with the performance of her duties hereunder or for promoting, pursuing or otherwise furthering the business or interests of the Company (including but not limited to travel costs, dining and entertainment), in each case in accordance with policies established by the Board from time to time in effect and upon receipt of appropriate documentation of such expenses.

8.    Termination.

(a)    Death.  The Executive’s employment hereunder shall terminate automatically upon the Executive’s death.

(b)    Disability.  If during the Term of this Agreement, Executive becomes physically or mentally unable to perform her duties for the Company hereunder in the reasonable judgment of the Board and such incapacity has continued for a total of ninety (90) consecutive days or any one hundred twenty (120) days in a period of three hundred sixty-five (365) consecutive days (“Disability”), then the Company shall have the right to terminate Executive’s employment with the Company upon written notice to Executive.

(c)     Cause.  The Company shall be entitled to terminate the Executive’s employment for “Cause.” For purposes of this Agreement, “Cause” shall mean that the Executive: (i) pleads “guilty” or “no contest” to or is convicted of an act which is defined as a felony under

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federal or state law or as a crime under federal or state law which involves Executive’s fraud or dishonesty; (ii) in carrying out her duties, engages in conduct that constitutes willful neglect or willful misconduct; provided such plea, conviction, neglect or misconduct results in material economic harm to the Company; (iii) fails to obtain or maintain required licenses in the jurisdiction where the Company currently operates or has plans to operate; (iv) willfully and intentionally fails to perform the material responsibilities of the Executive’s position, (v) engages in an act of dishonesty in the performance of her duties hereunder, (vi) harasses or discriminates against the Company’s employees, customers, or vendors in violation of Company policies with respect to such conduct; (vii) engages in any conduct that is reasonably likely to cause harm to the reputation of the Company or risk the loss of any license required by the Company in the jurisdiction where the Company currently operates or has plans to operate; (viii) makes a material disclosure as defined by Section 10(a) or (ix) materially breaches any term of this Agreement.  In the event any of the occurrences in (i) through (ix) above have occurred, the Executive shall be given written notice by the Company of its intention to so terminate her employment, such notice (i) to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination for Cause is based and (ii) to be given within sixty (60) days after the Board knew of such acts or failures to act.  In the event such notice is timely given by the Company, the Executive shall have thirty (30) days after the date that the notice is given in which to cure such conduct, to the extent such cure is possible.  For the avoidance of doubt, any of the occurrences constituting Cause set forth in clauses (i), (ii) and (v) above cannot be cured.  No act or failure to act on Executive’s part will be considered “willful” unless done, or omitted to be done by Executive not in good faith and without reasonable belief that her action or omission was in the best interests of the Company.

(d)    Good Reason.  The Executive may terminate her employment hereunder for “Good Reason”, which is defined to include the following events arising without the consent of the Executive: (A) a material diminution in the Executive’s Base Salary (unless such diminution is part of an across-the-board diminution affecting all executive officers commensurate with the position held by the Executive of the Company equally); (B) a material diminution in the Executive’s title, authority, duties or responsibilities; (C) a material diminution in the authority, duties and responsibilities of the person to whom the Executive is required to report; (D) a material diminution in the budget over which the Executive retains authority, except a diminution in the budget resulting from a diminution of the Company’s overall operating budget; (E) a material change in the geographic location at which the Executive must perform her duties and responsibilities for the Company; or (F) any other action or inaction that constitutes a material breach of the terms of this Agreement. Notwithstanding the foregoing, the Executive expressly acknowledges and agrees that any future employment and/or designation by the Company of newly created officer positions, including officer positions that may have supervisory roles with respect to Executive, shall not constitute “Good Reason” for purposes of this Section 8(d). In the event any of the occurrences in (A) through (F) above have occurred, the Company shall be given written notice by the Executive of her intention to so terminate her employment, such notice; (i) to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination for Good Reason is based and (ii) to be given within thirty (30) days after the Executive knew of such acts or failures to act.  In the event such notice is timely given by the Executive, the Company shall have thirty (30) days after the date that the notice is given in which to cure such conduct, to the extent such cure is possible. In the event of the occurrence of an event described in (A) through

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(F) above, which event remains uncured after the Company has received written notice of Executive’s intention to terminate her employment to the Company, the Executive shall have sixty-one (61) days from the initial existence of the event(s) that constitute the grounds on which the proposed termination for Good Reason is based to terminate her employment for Good Reason.

(e)    Without Cause.  The Company may terminate the Executive’s employment hereunder without Cause at any time and for any reason (or for no reason) in the Company’s sole discretion by giving the Executive a Notice of Termination (as defined below). Such termination shall not be deemed a breach of this Agreement. 

(f)    Voluntary.  Notwithstanding anything contained elsewhere in this Agreement to the contrary, the Executive may terminate her employment hereunder at any time and for any reason whatsoever (or for no reason) in the Executive’s sole discretion by giving the Company a Notice of Termination (as defined below).  Such termination shall not be deemed a breach of this Agreement.

(g)    Notice of Termination.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which indicates the specific termination provision of this Agreement relied upon and which sets forth in reasonable detail, if applicable, the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.  For purposes of this Agreement, no purported termination of employment which requires a Notice of Termination shall be effective without such Notice of Termination.  The Termination Date (as defined below) specified in such Notice of Termination shall be no less than thirty (30) days from the date the Notice of Termination is given.

(h)    Termination Date.  “Termination Date” shall mean the date of the termination of the Executive’s employment with the Company and specifically (i) in the case of the Executive’s death, her date of death; (ii) in the case of a termination of the Executive’s employment for Cause, the relevant date specified in Section 8(c) of this Agreement; (iii) in the case of a termination of the Executive’s employment for Good Reason, the relevant date specified in Section 8(d) of this Agreement; (iv) in the case of the expiration of the Term of this Agreement in accordance with Section 1, the date of such expiration; and (v) in all other cases, the date specified in the Notice of Termination.

9.    Compensation Upon Termination of Employment.

(a)    At End of Term; For Cause; Without Good Reason.  If during the Term of this Agreement, the Executive’s employment under this Agreement is terminated by the Company for Cause or by the Executive without Good Reason (and other than by reason of the Executive’s death or Disability), or at the end of the Term, the Company’s sole obligation hereunder, subject to applicable law, shall be to pay the Executive the following amounts earned hereunder but not paid as of the Termination Date:

(i)          the Executive’s Base Salary through the Termination Date;

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(ii)         reimbursement of any and all reasonable, ordinary, and necessary expenses incurred in connection with the Executive’s duties and responsibilities under this Agreement and for which the Company received appropriate documentation prior to the Termination Date; and

(iii)       any benefits to which Executive may be entitled to under the plans and programs described in Section 5(c) or Section 6 as of the Termination Date in accordance with the terms of this Agreement and relevant programs or policies of the Company.

Subsections (i) through (iii) shall be referred to collectively as the “Accrued Obligation.”

(b)    Without Cause or for Good Reason.  If the Executive’s employment hereunder is terminated by the Executive for Good Reason or by the Company without Cause, the Company’s sole obligation hereunder shall be to pay the Executive the following amounts:

(i)          the Accrued Obligation;

(ii)         a pro-rata portion (based on the days worked by the Executive during the applicable year) of any bonus awarded pursuant to any annual bonus plan maintained by the Company for executive officers commensurate with the position held by the Executive to which the Executive would have been entitled had she not been terminated, which shall be paid at such time as other participants in the bonus plan are paid their respective bonuses in respect of that fiscal year, but no later than March 15 of the calendar year following the Termination Date;

(iii)        The Executive’s Base Salary for the following period (the “Salary Continuation Period”): (A) in the event that Executive’s employment hereunder is terminated prior to the occurrence of a Change in Control, the lesser of (x) eighteen (18) months following such termination or (y) the remaining duration of the Term; or (B) in the event that Executive’s employment hereunder is terminated on or following the occurrence of a Change in Control, the greater of (x) twenty four (24) months following such termination or (y) the remaining duration of the Term; in each instance such amount payable in equal installments in accordance with the Company’s payroll practices applicable to its executive officers commensurate with the position held by the Executive which payments shall commence on the earlier of the first payroll date following the 75th day after the Termination Date, or thirty (30) days after the effective date of the Release referenced below in Section 9(g).  The first payment pursuant to this Section 9(b)(iii) shall include those payments that would have previously been paid if the payments described in this Section had begun on the first payroll date following the Termination Date.  This timing of the commencement of payments pursuant to this Section 9(b)(iii) is subject to Section 11 below; and

(iv)       that portion of any Equity Awards that is unvested on the Termination Date shall be deemed vested on the Termination Date and Options shall remain outstanding through the remainder of the original term of such Options.

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(c)    Disability.  If the Executive’s employment hereunder is terminated by the Company by reason of the Executive’s Disability, the Company’s sole obligation hereunder shall be to pay the Executive the following amounts:

(i)          the Accrued Obligation; and

(ii)         any accrued benefits under the Company’s regular and any supplemental long-term disability plan or plans; and

(iii)        that portion of any Equity Awards that is unvested on the Termination Date shall be deemed vested on the Termination Date and Options shall remain outstanding through the remainder of the original term of such Options.

(d)    Death.  If the Executive’s employment hereunder is terminated due to her death, the Company’s sole obligation hereunder shall be to pay the Accrued Obligation to the person or persons designated in writing by the Executive to receive such payment, or if no such designation was made, to the Executive’s estate.  In addition, that portion of any Equity Awards that is unvested on the Termination Date shall be deemed vested on the Termination Date and Options shall remain outstanding through the remainder of the original term of such Options.

(e)    Continuation of Employee Benefits.  Notwithstanding anything to the contrary, in addition to any amounts payable in the event of a termination under Section 9(b), the Company shall fully subsidize the cost of all Consolidated Omnibus Budget Reconciliation Act (“COBRA”) premiums during the Salary Continuation Period and the Company shall continue to provide the Executive, during the Salary Continuation Period with any other benefits set forth under Section 5(c) as though the Executive’s employment had not terminated (to the extent such coverage may be continued under the terms of such plans and programs and exclusive of participation in any Section 401(k) Plan or any other plans for severance benefits). In accordance with the applicable provisions of COBRA, the Executive may continue COBRA coverage at the Executive’s sole cost for any remaining COBRA period after the Salary Continuation Period. Notwithstanding the foregoing and subject to Executive’s group health plan coverage continuation rights under COBRA, the Company’s obligation to provide the continuation of benefits under this Section shall be reduced to the extent the same types are received or made available to Executive under the plans, programs or arrangements of a subsequent employer or is otherwise received by Executive during such period. The Executive shall have the obligation to notify the Company, during the Salary Continuation Period, that she is eligible for, entitled to or receiving such benefits from a subsequent employer or is otherwise receiving such benefits.

(f)    No Mitigation; No Offset.  In the event of any termination of her employment hereunder, the Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation provided to the Executive in any subsequent employment, except as provided in Section 9(e) of this Agreement.

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(g)    Release.   Any other provisions of this Agreement notwithstanding, Section 9(b)(ii) and (iii) shall not apply unless and until: (i) Executive has executed and delivered a full and complete general release of all claims in such form as is reasonably requested by the Company which Executive has not revoked in any time frame provided in the general release; and (ii) Executive has returned all the Company’s property. Any obligation on the part of the Company for payments pursuant to Section 9(b)(ii) and (iii), shall cease if the Executive violates of the provisions of Section 10 below.

(h)     Timing of Payments.  Other than the benefits provided for in Section 9(e) above, unless otherwise specifically indicated herein, the payments provided for in this Section 9 shall begin within ninety (90) days of the termination of the Executive’s employment with the Company provided the Executive has not revoked acceptance of the releases set forth in Section 9(g).

(i)    Limitation on Benefits.  Notwithstanding anything to the contrary contained in this Agreement, to the extent that any of the payments and benefits provided for under this Agreement or any other agreement or arrangement between the Company and the Executive (collectively, the “Payments”) (i) constitute a “parachute payment” within the meaning of Section 280G of the Code and (ii) but for this Section 9(i), would be subject to the excise tax imposed by Section 4999 of the Code, then the Payments shall be reduced to the extent that such reduction would result in after-tax payments and benefits to the Executive that exceed the after-tax payments and benefits to which the Executive be entitled without such reduction. Any determination required under this Section shall be made in writing by the Company’s independent public accountants (the “Accountants”), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes and the Executive agrees not to take any position (in any tax return or otherwise) inconsistent with determination.  For purposes of making the calculations required by this Section, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely in reasonable, good faith interpretations concerning the application of Sections 280G and 4999 of the Code.  The Company and the Executive shall furnish to the Accountants such information and documents as the Accountants may request in order to make a determination under this Section.  The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section.  If the limitation set forth in this Section 9(i) is applied to reduce an amount payable to the Executive, and the Internal Revenue Service successfully asserts that, despite the reduction, the Executive has nonetheless received payments which are in excess of the maximum amount that could have been paid to the Executive without being subjected to any excise tax, then, unless it would be unlawful for the Company to make such a loan or similar extension of credit to the Executive, the Executive may repay such excess amount to the Company as though such amount constituted a loan to the Executive made at the date of payment of such excess amount, bearing interest at 120% of the applicable federal rate (as determined under Section 1274(d) of the Code in respect of such loan).

(j)    Valuation of Non-Competition Obligations.  The Company shall make reasonable efforts to cooperate with the Executive with regard to the value for tax purposes of the Executive’s non-competition obligations under this Agreement.

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10.    Employee Covenants.

(a)    Unauthorized Disclosure.  The Executive shall not, during the Term of this Agreement and thereafter, make any Unauthorized Disclosure (as defined below).  For purposes of this Agreement, “Unauthorized Disclosure” shall mean disclosure by the Executive without the prior written consent of the Board to any person, other than an employee of the Company or a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of her duties hereunder, of any confidential information relating to the business or prospects of the Company, including, but not limited to, any information with respect to any of the Company’s customers, products, finances or financial projections, methods of distribution, strategies, business and marketing plans and business policies and practices, including information disclosed to the Company by others under agreements to hold such information confidential (the “Confidential Information”).  Notwithstanding the foregoing, the Executive may disclose Confidential Information (i) to the extent such disclosure is or may be required by law, but only after providing (A) notice to the Company of any third party’s request for such information, which notice shall include the Executive’s intent with respect to such request, and (B) to the extent possible under the circumstances, sufficient opportunity for the Company to challenge or limit the scope of the disclosure, or (ii) in confidence to an attorney, accountant or other advisor for the purpose of securing professional advice concerning the Executive’s personal matters, provided that such attorney or other advisor agrees to observe these confidentiality provisions.  Confidential Information shall not include the use or disclosure by the Executive of any information known generally to the public or known within the Company’s trade or industry (other than as a result of any direct or indirect action or inaction by the Executive or any disclosure by the Executive in violation of this Section 10(a)).  This Section 10(a) has no temporal, geographical or territorial restriction.Nothing in this Agreement prohibits or restricts the Executive (or Executive’s attorney) from initiating communications directly with, responding to an inquiry from, or providing testimony before the Securities and Exchange Commission (the “SEC”), the Financial Industry Regulatory Authority (“FINRA”), any other self-regulatory organization or any other federal or state regulatory authority regarding this Agreement, or its underlying facts or circumstances, or a possible securities law violation. Executive further understands that this Agreement does not limit Executive’s ability to communicate with any securities regulatory agency or authority or government agencies or otherwise participate in any investigation or proceeding that may be conducted by any securities regulatory agency or authority or government agency. This Agreement does not limit the Executive’s right to receive an award for information provided to any government agencies or to the SEC staff or any other securities regulatory agency or authority.

(b)    Non-Competition.  The Executive shall not, during the Term of this Agreement and during the Non-Competition Period (as defined below), directly or indirectly, without the prior written consent of the Board, own, manage, operate, join, control, be employed by, consult with or participate in the ownership, management, operation or control of, or be connected

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with (as a stockholder, partner, or otherwise) any business competing with, or substantially similar to, the businesses of Company and its present and future subsidiaries, joint ventures, partners or other affiliates (except that affiliates of the Company that are solely in a business unrelated to the Company’s business shall not be included) (the “Empire Companies”), as such businesses exist within 100 miles of the location in which any such entity conducts, or is actively investigating the possibility of conducting, its businesses as of the beginning of the Non-Competition Period.  Notwithstanding the foregoing, the provisions of this Section 10(b) shall not be deemed to prohibit the Executive’s ownership of up to 2% of the total shares of all classes of stock outstanding of any publicly held company.

(c)    Non-Solicitation.  During the period from the termination of the Executive’s employment with the Company through the one year anniversary of the date of termination, the Executive shall not, directly or indirectly, alone or in conjunction with another person, (i) hire, solicit, retain, compensate or otherwise induce or attempt to induce any individual who is an employee of any of the Empire Companies, to leave the employ of the Empire Companies or in any way interfere with the relationship between any of the Empire Companies and any employee thereof, (ii) hire, engage, send any work to, place orders with, or in any manner be associated with any supplier, contractor, subcontractor or other business relation of any of the Empire Companies if such action by the Executive would have a material adverse effect on the business, assets or financial condition of any of the Empire Companies, or materially interfere with the relationship between any such person or entity and any of the Empire Companies, or (iii) solicit or accept business from any customer of any of the Empire Companies.  In connection with the foregoing provisions of this Section 10, the Executive represents that her experience, capabilities and circumstances are such that such provisions will not prevent her from earning a livelihood.  

(d)    Non-Competition Period.  For purposes of this Agreement, the “Non-Competition Period” means the period from the termination of the Executive’s employment with the Company through (i) in the case of a termination without Cause by the Company, the end of the Salary Continuation Period, (ii) in the case of a voluntary termination by the Executive without Good Reason, one (1) year following the date of such termination, (iii) in the case of Executive terminating her employment for Good Reason, the end of the Salary Continuation Period (iv) in the case of a termination by the Company with Cause, for one (1) year following such termination and (v) in the case of the expiration of the Term, for three (3) months following the expiration of the Term.

(e)    Remedies.  The Executive agrees that any breach of the terms of this Section 10 would result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law.  The Executive therefore also agrees that in the event of said breach or any threat of such a breach, the Company shall be entitled to seek an immediate injunction and restraining order to prevent such breach or continued breach by the Executive, in addition to any other remedies to which the Company may be entitled at law or in equity.  The Executive and the Company further agree that the provisions of this Section 10 are reasonable and properly required for the adequate protection of the current and future business of the Empire Companies and that the Company would not have entered into this Agreement but for the inclusion of such covenants herein.  Should a court determine, however, that any provision of the covenants is unreasonable,

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either in period of time, geographical area, or otherwise, the Parties agree that such covenants should be interpreted and enforced to the maximum extent which such court deems reasonable and such determination shall have no effect upon, and shall not impair the enforceability of, any other provision of this Agreement. The existence of a claim, charge, or cause of action by the Executive against the Company shall not constitute a defense to the enforcement by the Company of the foregoing confidentiality, non-competition, and non solicitation sections.

11.    Section 409A.  It is the intention of the Parties that this Agreement be exempt from or comply strictly with the provisions of Section 409A of the Code, and Treasury Regulations and other Internal Revenue Service guidance promulgated thereunder (the “Section 409A Rules”) and any ambiguity herein shall be interpreted so as to be consistent with the intent of this paragraph.  In no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Executive by Section 409A or damages for failing to comply with Section 409A. Notwithstanding anything contained herein to the contrary, all payments and benefits which are payable upon a termination of employment hereunder shall be paid or provided only upon those terminations of employment that constitute a “separation from service” from the Company within the meaning of the 409A Rules (determined after applying the presumption set forth in Treas. Reg. Section 1.09A-1(h)(1)).  Further, to the extent the Executive is a specified employee under the 409A Rules at the time of a termination of employment and the deferral of the commencement of any payments or benefits otherwise payable hereunder as a result of such termination of employment is necessary in order to prevent any accelerated recognition of income or additional tax under Section 409A, then the Company will defer the commencement of any payments or benefits hereunder (without any reduction in payments or benefits ultimately paid or provided to the Executive) until the date that is at least six (6) months following the Executive’s termination of employment with the Company (or the earliest date permitted under Section 409A Rules, e.g., immediately upon the Executive’s death), whereupon the Company will promptly pay the Executive a lump-sum amount equal to the cumulative amounts that would have otherwise been previously paid to the Executive under this Agreement during the period in which such payments or benefits were deferred.   Thereafter, the normal schedule for the remaining payments will commence.  Notwithstanding anything to the contrary in this Agreement, reimbursement payments shall be promptly made to the Executive following such submission, but in no event later than December 31^st of the calendar year following the calendar year in which the expense was incurred. In no event shall the Executive be entitled to any reimbursement payments after December 31^st of the calendar year following the calendar year in which the expense was incurred.

Additionally, in the event that following the date hereof, the Company or the Executive reasonably determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, the Company and the Executive shall work together to adopt such amendments to this Agreement or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate to (x) exempt the compensation and benefits payable under this Agreement from Section 409A Rules and/or preserve the intended tax treatment of the compensation and benefits provided with respect to this Agreement or (y) comply with the requirements of Section 409A Rules.

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12.    Withholding of Taxes.  The Company may take such actions as are reasonably appropriate or consistent with applicable law and the Plans in connection with any compensation paid pursuant to this Agreement with respect to the withholding of any taxes (including income or employment taxes) or any other tax matters, including, but not limited to, requiring the Executive to furnish to the Company any applicable withholding taxes prior to the vesting of any Equity Awards.

13.     Indemnification; Insurance; Limitation of Liability.

(a)    The Company agrees that if the Executive is made a party, or is threatened to be made a party, to any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that she is or was a director, officer or employee of the Company or is or was serving at the request of the Company as a director, officer, member, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to employee benefit plans, the Executive shall be indemnified and held harmless by the Company to the fullest extent legally permitted or authorized by the Company’s certificate of incorporation, by-laws or resolutions of the Board against all cost, expense, liability and loss (including, without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or other liabilities or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by the Executive in connection therewith, and such indemnification shall continue as to the Executive even if hse has ceased to be a director, member, employee or agent of the Company or other entity and shall inure to the benefit of the Executive’s heirs, executors and administrators.  The Company shall advance to the Executive all costs and expenses incurred by her in connection with a Proceeding within a reasonable time after submission of reasonable documentation of such costs and expenses.  Such request shall include an undertaking by the Executive to repay the amount of such advance if it shall ultimately be determined that she is not entitled by law to be indemnified against such costs and expenses.

(b)    Neither the failure of the Company (including its Board, independent legal counsel or stockholders) to have made a determination prior to the commencement of any Proceeding concerning payment of amounts claimed by the Executive under Section 13(a) above that indemnification of the Executive is proper because she has met the applicable standard of conduct, nor a determination by the Company (including its Board, independent legal counsel or stockholders) that the Executive has not met such applicable standard of conduct, shall create a presumption in any judicial proceeding that the Executive has not met the applicable standard of conduct.

(c)    The Company agrees to continue and maintain director’s and officer’s liability insurance policy covering the Executive, until such time as actions against the Executive are no longer permitted by law, with terms and conditions no less favorable than the most favorable coverage then applying to any other executive officer commensurate with the position held by the Executive of the Company.

14.    Representations.  

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(a)     The Executive represents and warrants that she has the free and unfettered right to enter into this Agreement and to perform her obligations under it and that she knows of no agreement between her and any other person, firm or organization, or any law or regulation, that would be violated by the performance of her obligations under this Agreement. The Executive represents that in connection with the Executive’s employment with the Company, the Executive shall not use or disclose any trade secrets or other proprietary information or intellectual property in which a prior employer or company has any right, title or interest and your employment with the Company will not infringe or violate the rights of any prior employer or company. The Executive represents and warrants to the Company that she has returned all property and confidential information belonging to any prior employer, other than confidential information that has become generally known to the public or within the relevant trade industry.   

(b)    The Company represents and warrants that it is validly existing and in good standing under the laws of the State of Delaware and is registered or qualified to conduct business in all other jurisdictions in which the failure to be so registered or qualified would adversely affect the ability of the Company to perform its obligations under this Agreement.  The Company has taken all company action required to execute, deliver and perform this Agreement and to make all of the provisions of this Agreement the valid and enforceable obligations they purport to be and has caused this Agreement to be executed by a duly authorized officer of the Company.  All consents and approvals by any third party required to be obtained by the Company in order for it to be authorized to enter into and consummate this Agreement have been obtained and no further third party approvals or consents are required to consummate this Agreement. Execution and delivery of this Agreement and all related documents, and performance of the obligations hereunder by the Company do not conflict with any provision of any law or regulation to which the Company or any of its affiliates are subject, conflict with or result in a breach of or constitute a default under any of the terms, conditions or provisions of any agreement or instrument to which the Company or any of its affiliates are a party or by which the Company is bound or any order or decree applicable to the Company, or result in the creation or imposition of any lien on any assets or property of the Company, and/or which would materially and adversely affect the ability of the Company to perform its obligations under this Agreement. The Company has obtained all consents, approvals, authorizations or orders of any court or governmental agency or body, if any, required for the execution, delivery and performance by the Company of this Agreement.

15.    Successors and Assigns.

(a)    This Agreement shall be binding upon and shall inure to the benefit of the Company, its successors and assigns and the Company shall require any successor or assign to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place.  The term “the Company” as used herein shall include any such successors and assigns.  The term “successors” and “assigns” as used herein shall mean a corporation or other entity acquiring or otherwise succeeding to, directly or indirectly, all or substantially all the assets and business of the Company (including this Agreement) whether by operation of law or otherwise.

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(b)    Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, her beneficiaries or legal representatives, except by will or by the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal personal representative.

16.    Notice.  For the purposes of this Agreement, notices and all other communications provided for in this Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have been duly given when personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid, or upon receipt if overnight delivery service or facsimile is used, and addressed as follows:

To the Executive:

Nanette L. Horner

at the address in the payroll records of the Company

To the Company:

Empire Resorts, Inc.

c/o Monticello Casino and Raceway, Route 17B

P.O. Box 5013

Monticello, New York 12701

Attention: Ryan Eller, President and Chief Executive Officer

17.    Survivorship.  Except as otherwise set forth in this Agreement, the Executive’s covenants set forth in Section 10 hereof shall survive any termination of the Executive’s employment.

18.    Waiver.  The waiver by either Party of a breach of any provision of this Agreement shall not be construed as a waiver of any subsequent breach.  The failure of a Party to insist upon strict adherence to any provision of this Agreement on one or more occasions shall not be considered a waiver or deprive that Party of the right thereafter to insist upon strict adherence to that provision or any other provision of this Agreement.  Any waiver must be in writing and signed by the Executive and the Company.

19.     Governing Law.  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York without giving effect to the conflict of law principles thereof.  Any action, suit or other legal proceeding that is commenced to resolve any matter arising under or relating to any provision of this Agreement shall be submitted to the exclusive jurisdiction of any state or federal court in New York County.

20.    Severability.  The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

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21.    Entire Agreement.This Agreement constitutes the entire agreement between the Parties and supersedes all prior agreements, understandings and arrangements, oral or written, between the Parties with respect to the subject matter hereof.  This Agreement may be executed in one or more counterparts.

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the day and year first above written.

EMPIRE RESORTS, INC.

By: /s/ Ryan Eller                

Name: Ryan Eller

Title: President and Chief Executive Officer

EXECUTIVE:

/s/ Nanette L. Horner            

Nanette L. Horner

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EX-10.60

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

SPORTSBOOK AND DIGITAL GAMING COLLABORATION AGREEMENT

between

EMPIRE RESORTS, INC.

and

HILLSIDE (NEW YORK) LLC

November 14, 2018

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TABLE OF CONTENTS

Page

Page

ARTICLE 1 DEFINITIONS; RULES OF CONSTRUCTION; RECITALS 1

1.1 Defined Terms    1

1.2 Interpretation    1

1.3 Exercise of Discretion    2

1.4 Recitals    2

ARTICLE 2 EQUITY ISSUANCE    2

2.1 Equity Issuance    2

2.2 Gaming Approvals for Equity Issuance    2

ARTICLE 3 NY GAMING LAW    3

3.1 Retail Sportsbook    3

3.2 Online Sportsbook Offering Right    4

3.3 Multiple Skins    5

3.4 Online Casino/Online Poker    7

3.5 Operator Joinder    8

3.6 Gaming Approvals for Sportsbook    8

3.7 Gaming Approvals for Online Casino/Table Games and Online Poker    9

ARTICLE 4 OVERSIGHT COMMITTEE    10

4.1 Establishment; Powers    10

4.2 Pro Rata Share and Percentage Threshold    11

4.3 Appointment of OC Members    11

4.4 Vacancies    11

4.5 Removal    11

4.6 Resignation    11

4.7 Meetings of the Committee    11

4.8 Conduct of Meetings    12

4.9 Quorum    12

4.10 Voting    12

4.11 Proxies    12

4.12 Attendance and Waiver of Notice    12

4.13 Actions Without a Meeting    12

4.14 Compensation of OC Members    12

4.15 Deadlocks    12

ARTICLE 5 SPORTSBOOK ADMINISTRATION    13

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5.1 Administration of Sportsbook Lounge    13

5.2 Administration of bet365 Gaming Service    13

5.3 Subcontractors    14

5.4 Domain Names    14

5.5 NY Provisioning    15

5.6 Empire Compliance Services    15

5.7 Insurance    15

5.8 Empire Players Club    16

ARTICLE 6 ADVOCACY    16

6.1 Advocacy Efforts    16

ARTICLE 7 REGULATORY COMPLIANCE    17

7.1 Privileged Licenses    17

7.2 Gaming Compliance Modifications/Notification    17

7.3 Compliance with Bribery Laws    19

7.4 Online Gaming Verification    19

ARTICLE 8 FACILITIES    19

8.1 Equipment    19

8.2 License    19

8.3 Equipment Room License Terms    20

ARTICLE 9 ACCOUNTS    20

9.1 Player Accounts    20

9.2 Security Interest    20

ARTICLE 10 REPORTS    21

10.1 Gaming Taxes    21

10.2 Reporting    21

10.3 Books and Records    21

10.4 Cooperation    21

ARTICLE 11 VENDOR AGREEMENTS    22

11.1 Vendor Contracts    22

ARTICLE 12 FEES & ACCOUNTING    22

12.1 Statements    22

12.2 Funding of Costs    23

12.3 Retained Revenue    24

12.4 Payment Method    25

12.5 Eligible Promotional Gaming Credits    25

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12.6 Disputes    25

12.7 Right to Audit    25

ARTICLE 13 OWNERSHIP    26

13.1 Operator Marks    26

13.2 bet365 Marks    27

13.3 bet365 Ownership    28

13.4 Customer Data    28

ARTICLE 14 ADDITIONAL COVENANTS    29

14.1 Obligation of Confidentiality and Non-Use    29

14.2 Public Statements    31

14.3 Change of Control Transactions    32

14.4 Non-Solicitation    32

14.5 Marketing; Cross-Promotion    32

ARTICLE 15 REPRESENTATIONS AND WARRANTIES    33

15.1 Representations and Warranties of bet365    33

15.2 Representations and Warranties of Empire    34

ARTICLE 16 TERM AND TERMINATION    35

16.1 Term    35

16.2 Termination    35

16.3 Survival    36

16.4 Exclusive Remedy    36

16.5 Cure Rights    37

16.6 Limitation    37

16.7 Specific Performance    37

16.8 Offset    37

ARTICLE 17 INDEMNIFICATION    38

17.1 Indemnification of bet365    38

17.2 Indemnification of Empire and the Operator    38

17.3 Third Party Claims    39

ARTICLE 18 MISCELLANEOUS    40

18.1 Independent Contractors    40

18.2 No Third Party Beneficiaries    41

18.3 Succession and Assignment    41

18.4 Governing Law    41

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18.5 Waiver of Jury Trial    41

18.6 Amendment and Waiver    42

18.7 Entire Agreement    42

18.8 Counterparts; Facsimile; Electronic and Digital Signatures    42

18.9 Notices    42

18.10 Expenses    43

18.11 Joint Preparation of Agreement    43

18.12 Headings    44

18.13 Severability    44

18.14 Attorneys’ Fees    44

18.15 Further Assurances    44

18.16 No Consequential Damages    44

18.17 Interpretation    44

18.18 Guaranty    44

   #4838-3750-6425v9 iv

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

SPORTSBOOK AND DIGITAL GAMING COLLABORATION AGREEMENT

This SPORTSBOOK AND DIGITAL GAMING COLLABORATION AGREEMENT (this “Agreement”), dated as of November 14, 2018 (the “Effective Date”), is entered into by and between Empire Resorts, Inc., a Delaware corporation (“Empire”), and Hillside (New York) LLC, a Delaware limited liability company (“bet365”). Empire and bet365 are collectively referred to herein as the “Parties” and individually as a “Party”.

RECITALS

A.    Empire, through its Affiliate, Montreign Operating Company, LLC, a New York limited liability company (“Montreign”), operates, owns, controls and manages the Resorts World Catskills Casino Resort (the “Catskills Casino”) located in Monticello, New York.

B.    bet365, directly and through its Affiliates, operates, owns, controls and manages online gaming and sports betting services throughout the world.

C.    Policy makers in the State of New York (“NY”) are contemplating the legalization of sports betting, including online sportsbooks in NY.

D.    In accordance with this Agreement and as permitted by applicable Law, Empire, desires, through its Affiliate, Montreign, to provide bet365 the right to participate with Empire in the offering of Retail Sports Betting, an Online Sportsbook, Online Casino/Table Games and Online Poker in NY.

AGREEMENT

NOW, THEREFORE, in consideration of the promises and mutual covenants in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

Article 1DEFINITIONS; RULES OF CONSTRUCTION; RECITALS

1.1Defined Terms. Capitalized terms used in this Agreement, the recitals above and its schedules, exhibits and appendices, which are not otherwise defined herein, shall have the meanings ascribed to them as set forth in Schedule A hereto.

1.2Interpretation. Except to the extent otherwise provided or the context otherwise requires: (a) when a reference is made in this Agreement to an Article, Section, Clause, Exhibit or Schedule, such reference is to an Article, Clause or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise indicated; (b) the table of contents and headings for this Agreement are for reference purposes only and do not affect in any way the meaning or interpretation of this Agreement; (c) whenever the words “include,” “includes” or “including” are used in this Agreement, they are deemed to be followed by the words “without being limited to” and the words “include,” “includes,” “including,” “in particular” or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms; (d) the words “hereof,” “herein”

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

and “hereunder” and words of similar import, when used in this Agreement, refer to this Agreement as a whole and not to any particular provision of this Agreement; (e) all terms defined in this Agreement have the defined meanings when used in any certificate or other document made or delivered pursuant hereto, unless otherwise defined therein; (f) the definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (g) any pronoun used in this Agreement shall include the corresponding masculine, feminine and neuter forms; (h) any notice under this Agreement shall be in writing and in English; (i) any reference to “days” means “calendar days” unless otherwise specified; (j) if a notice is to be given on a specified day, unless otherwise specifically provided herein, it must be given prior to 5.00 p.m., New York, New York time; (k) references to a Person are also to its successors and permitted assigns; (l) the use of “or” is not intended to be exclusive unless expressly indicated otherwise; (m) any references to “$” and “dollars” is to the lawful money of the USA; (n) a reference to “unreasonably withheld” means “unreasonably withheld, conditioned or delayed”, and (o) unless otherwise expressly provided herein, any agreement, instrument, statute, rule or regulation defined or referred to herein or in any agreement or instrument defined or referred to herein (including this Agreement) means such agreement, instrument, statute, rule or regulation as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes, rules and regulations) by succession of comparable successor statutes, rules and regulations.

1.3Exercise of Discretion. Unless expressly stated otherwise in this Agreement, when any Transaction Party is entitled to make any decision, take any permissive action (including the granting or withholding of consent or approval, the making of a request, or the waiver of any provision of this Agreement or otherwise), such determination of whether and how to make such decision, take such action, make such request or grant such waiver shall not be exercised in bad faith or in breach of applicable Law, but shall be deemed to be in such Transaction Party’s sole and absolute discretion.

1.4Recitals. The Recitals set forth above are true and correct and are hereby incorporated into this Agreement as if set forth at length herein.

ARTICLE 2EQUITY ISSUANCE

2.1Equity Issuance. On the Effective Date, Empire and Hillside (New Media Holdings) Limited, a holding company registered in England (“bet365 Equity Holder”) entered into an agreement whereby bet365 Equity Holder agreed to purchase 2,500,000 shares (such shares and any other security into which such 2,500,000 shares are converted, exchanged, reclassified or otherwise changed, the “Equity Stake”) of common stock, par value $0.01, of Empire (and any other class of securities into which such securities may hereinafter be reclassified or exchanged, the “Common Stock”) for an aggregate purchase price of $50,000,000 (the “Stock Purchase Agreement”) (i.e. $20.00 per share of Common Stock).

2.2Gaming Approvals for Equity Issuance.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

2.2.1bet365 Equity Holder agrees to use commercially reasonable efforts to obtain all Gaming Approvals necessary to consummate the acquisition of the Second Closing Shares in accordance with the Stock Purchase Agreement, as soon as reasonably practicable following the Effective Date. bet365 Equity Holder shall cooperate with, and timely comply with all filing deadlines and any requests of, a Gaming Authority in connection therewith. Upon the reasonable request of bet365 Equity Holder, Empire shall use commercially reasonable efforts in assisting and helping bet365 Equity Holder in connection with securing such Gaming Approvals, including consulting with the relevant Gaming Authority.

2.2.2To the extent permitted by applicable Law, each Transaction Party shall within five (5) Business Days provide the other Transaction Party with any notice, correspondence or other information received in connection with any Gaming Authority that reasonably could have a material adverse impact on bet365 Equity Holder’s ability to acquire or continue to hold the Equity Stake as contemplated by the Stock Purchase Agreement. Each Transaction Party shall provide to the other Transaction Party copies of all Gaming Approvals received by it in connection with consummating the actions required by this Article 2 promptly after receipt thereof.

ARTICLE 3NY GAMING LAW

3.1Retail Sportsbook.

3.1.1If during the Term Gaming Regulations are enacted in NY allowing Retail Sports Betting (other than those which are authorized under applicable Gaming Regulations as of the Effective Date) in the Catskills Casino, then Empire shall cause a physical sportsbook lounge to be constructed at the Catskills Casino (the “Sportsbook Lounge”), which Sportsbook Lounge shall be branded with an Empire Brand until the Sportsbook Lounge Transition. Empire shall design and develop the Sportsbook Lounge; provided that (a) Empire shall seek input and guidance from bet365 associated with such build-out and fit-out of the Sportsbook Lounge, including input on suppliers of technology to the Sportsbook Lounge, and (b) any agreements with suppliers regarding the technology of the Sportsbook Lounge Betting Platform shall be terminable on as short of notice and without penalty as is commercially practical.

3.1.2Subject to receipt of all the requisite Gaming Approvals for bet365 to provide the bet365 Sportsbook Lounge Services, within a reasonable time period following notice by bet365 in writing, provided that such notice shall be delivered prior to the twelve (12) month anniversary of the Go-Live Date, (a) the hardware, software and trading services for the betting services, including ancillary devices (e.g., self-service betting kiosks and over-the-counter terminals) thereto, provided in the Sportsbook Lounge (the “Sportsbook Lounge Betting Platform”) shall be transitioned, as directed by bet365 in compliance with applicable Law, to a bet365 product and bet365 shall commence the bet365 Sportsbook Lounge Services with the primary goal of the Parties providing a unified bet365 Online Sportsbook and Sportsbook Lounge, and (b) bet365 shall rebrand the Sportsbook Lounge with a bet365 Brand (collectively, the “Sportsbook Lounge Transition”).

3

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

3.1.3The costs for the design, build-out and fit-out of the Sportsbook Lounge (the “Lounge Buildout Costs”) and, prior to the Sportsbook Lounge Transition, all Costs related to the Sportsbook Lounge shall be paid by Empire (the “Lounge Operational Costs”). Upon the earlier of (a) the Go-Live Date of the bet365 Online Sportsbook, and (b) the date of the Sportsbook Lounge Transition, bet365 shall reimburse Empire for an amount equal to: (1) all reasonable and verifiable Lounge Buildout Costs; provided that bet365 shall not be obligated to reimburse Empire: (i) Lounge Buildout Costs in excess of [***] (excluding any costs associated with the Sportsbook Lounge Betting Platform), or (ii) any costs associated with development, build-out or construction of any areas of the Catskill Casino other than the Sportsbook Lounge, including any ancillary developments to accommodate the Sportsbook Lounge (i.e., moving a washroom in closer proximity to the Sportsbook Lounge); (2) plus all Lounge Operational Costs prior to such date; and (3) minus an amount equal to all the Sportsbook Lounge GGR less the applicable Gaming Taxes paid on such Sportsbook Lounge GGR prior such date; provided, however, if such amount is a negative number (i.e., (3) exceeds (1) plus (2) above), then such excess shall be treated as Revenue for purposes of this Agreement and shall be paid in accordance with Section 12.3 on the Sportsbook Lounge Transition (the aggregate amount, if any, bet365 is obligated to reimburse Empire, the “Reimbursed Lounge Costs”).

3.1.4Following the Sportsbook Lounge Transition, (a) all reasonable and verifiable costs incurred by bet365 associated with the bet365 Sportsbook Lounge Services shall be deemed Costs, (b) all Empire Operational Costs shall be deemed Costs; and (c) all Sportsbook Lounge GGR shall be deemed Revenue.

3.2Online Sportsbook Offering Right.

3.2.1If during the Term a NY Gaming Law is enacted allowing the offering of an Online Sportsbook, then bet365 shall manage, control and administer, utilizing the Operating License, an Online Sportsbook, subject to the terms of this Agreement.

3.2.2The bet365 Online Sportsbook shall be solely offered under the bet365 Brand and all bet365 Domain Names shall include such bet365 Brand. Notwithstanding the foregoing, if and as required by the NY Gaming Law, the bet365 Online Sportsbook shall include the Empire Brand (subject to the terms of the license set forth in Section 13.1(a)) or any other notice or disclosure indicating that the bet365 Online Sportsbook is utilizing the Operating License.

3.2.3To the extent the NY Gaming Law requires the bet365 Online Sportsbook to: (a) be co-branded with the Empire Brand (including as part of the bet365 Domain Names), then the Parties shall discuss in good faith a co-branding arrangement (provided, bet365 shall otherwise manage, control and administer all aspects of the bet365 Online Sportsbook as contemplated in this Agreement) and bet365 shall be entitled to utilize the Empire Brand pursuant to Section 13.1(b) and (c) in order to comply with such Laws and the Parties shall work in good faith with the applicable Gaming Authority to minimize the impact on bet365 as a result of such co-branding (e.g., the Empire Brand shall be included as a second level domain name (after a “/” within the bet365 Domain Name)); or (b) be solely branded under an Empire Brand, then bet365 shall be entitled to utilize the Empire Brand pursuant to Section 13.1 to brand its Online Gaming Platform with the Empire Brand, but otherwise manage, control and administer the bet365 Online Sportsbook as contemplated

4

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

in this Agreement (in the case of either (a) or (b), a “Co-Branding”). If the NY Gaming Law is subsequently amended to no longer require such Co-Branding, the bet365 Online Sportsbook shall be offered solely under a bet365 Brand, and bet365’s non-exclusive license and right to utilize the Empire Brand for Co-Branding pursuant to Section 13.1 shall immediately and automatically terminate. For clarity, use of the Empire Brand for Co-Branding and to comply with this Section 3.2.3 shall not be an “Empire Branded Online Sportsbook” for purposes of this Agreement.

3.3Multiple Skins.

3.3.1To the extent NY allows for more than one Skin for an Online Sportsbook and Empire desires to offer Additional Skins on the Operating License, Empire shall consult in good faith with bet365 prior to offering such Additional Skins; provided, the ultimate decision to allow Additional Skins on the Operating License shall ultimately be made by Empire, provided (a) if such Additional Skin is added to the Operating License prior to the [***] anniversary of the enactment of the NY Gaming Law permitting an Online Sportsbook, then such decision must be approved by a majority of the independent members of Empire’s board of directors and (b) if such Additional Skin is added to the Operating License after the [***] anniversary of the enactment of the NY Gaming Law permitting an Online Sportsbook, then such decision must be approved by the Committee.

3.3.2If such Additional Skin is to be operated under an Empire Brand (an “Empire Branded Online Sportsbook”), then bet365 shall configure, pursuant to this Section 3.3.2, its Online Gaming Platform with the Empire Brand, but otherwise bet365 shall manage, control and administer the Empire Branded Online Sportsbook as contemplated in this Agreement. As soon as practicable after a decision has been made to operate an Empire Branded Online Sportsbook, the Parties shall mutually agree on the look and feel of the Empire Brand (i.e., color and logos) within the Empire Branded Gaming Service. It is acknowledged that Empire shall at all times retain editorial control over the look and feel (i.e., color and logos) of the Empire Brand and/or other intellectual property owned or licensed by a member of the Empire Group regarding the Empire Branded Online Sportsbook; provided, in no event shall bet365 be obligated to modify the features, functionality or structure of or otherwise make departures from its existing user interface or user experience that are material or will result in material costs to bet365. Subject to changes requested by Empire pursuant to this Section 3.3.2, the Empire Branded Online Sportsbook shall, at all times, be no worse in terms of pricing, promotions, features, functions and availability as compared to the bet365 Online Sportsbook; provided, the Parties shall agree in advance on any third party costs that will be incurred in order to comply with such parity. In addition, bet365 shall tailor consumer facing operations (i.e. customer services) to identify the Empire Branded Online Sportsbook to its Players as operating under the Empire Brand. All costs and revenue associated with the Empire Branded Online Sportsbook shall be deemed Costs and Revenue, as applicable, under this Agreement except in relation to marketing Costs, which such amount shall be capped at, and bet365 is only obligated to spend, [***]% of the annual gross gaming revenue generated by the Empire Branded Online Sportsbook less Player Incentives applicable to the Empire Branded Gaming Service on marketing and promotion (including Player Incentives) of the Empire Branded Online Sportsbook. Other than as specifically permitted by this Agreement, during the Term, Empire and the Operator shall not, directly or indirectly through any officer, director, employee, agent,

5

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

owner, Affiliate or otherwise, in each case acting on behalf of Empire or the Operator, offer, or enter into any arrangement or agreement with a Third Party for offering of, an Online Sportsbook in NY, including the licensing of any Empire Brand in connection with an Online Sportsbook.

3.3.3In the event that Empire offers an Additional Skin in accordance with Section 3.3.1 other than in connection with a transaction pursuant to which a Third Party operator of land-based gaming facilities, Retail Sports Betting and/or Online Gaming Services (i) makes a capital investment in Empire and (ii) shall, upon the closing of the transaction, assume management control over all the gaming operations of the Catskills Casino (such transaction, a “Strategic Capital Investment”), all consideration paid to Empire for such Additional Skin, including any upfront access fee, capital investment in Empire, profit share or reimbursement of expenses, shall be considered Revenue for purposes of this Agreement. If such offer of an Additional Skin occurs prior to the Sportsbook Lounge Transition or the Go-Live Date, such consideration paid to Empire shall be held by Empire and applied in the first month following the Sportsbook Lounge Transition or the Go-Live Date.

3.3.4In the event that Empire offers an Additional Skin in accordance with Section 3.3.1 in connection with a Strategic Capital Investment, all consideration paid to Empire for such Additional Skin, including any upfront access fee, profit share or reimbursement of expenses, but excluding any capital investment in Empire, shall be considered Revenue for purposes of this Agreement; provided, however, that (i) other than if approved by the Oversight Committee, if applicable, any profit share shall be equal to or exceed the Minimum NRG Threshold and bet365 shall be entitled to receive the NGR Shortfall Distribution pursuant to Section 12.3.7to the extent the Minimum NGR Threshold is not satisfied; (ii) an amount equal to the Minimum Access Threshold for a Strategic Capital Investment shall always be attributable and be considered Revenue for purposes of this Agreement and shall be paid in accordance with Section 12.3 (the “Strategic Investment Access Fee”) or, (ii) if such Strategic Capital Investment occurs prior to the Sportsbook Lounge Transition or the Go-Live Date, shall be held by Empire and applied in the first month following the Sportsbook Lounge Transition or the Go-Live Date. To the extent the Strategic Capital Investment is Equity Securities and not cash, then an amount, based on the fair market value of such Equity Securities, equal to Strategic Investment Access Fee shall be paid to bet365 pursuant to Section 12.3.8 (the “Capital Investment Catch-up”). The fair market value of such Equity Securities for purpose of this Section shall be equal to the 30-Day VWAP for such Equity Securities or, if no 30-Day VWAP is reported, the fair market value agreed to by Empire and the Third Party in such Strategic Capital Investment.

3.3.5To the extent the consideration paid by such operator of the Additional Skin includes providing access to another jurisdiction within the USA for the offering of an Online Gaming Service, such access, at the request of bet365, shall be for the benefit of bet365 and Empire and branded with a bet365 Brand (unless bet365 elects to have the offering branded with an Empire Brand), and if such election is made, the Parties shall pursue such other jurisdiction based on an arrangement and commercial terms negotiated by the Parties in good faith, which shall be substantially similar to the arrangement and commercial terms set forth in this Agreement. If bet365 elects not to jointly pursue such jurisdiction, and any member of the Empire Group desires to offer an Online Gaming Service in such jurisdiction, then bet365 shall have the option of providing the

6

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

bet365’s Online Gaming Platform to the Empire Group for purpose of such Online Gaming Service and, in such case, such Online Gaming Service shall be treated the same as Empire Branded Online Sportsbook and the net proceeds received by the applicable member of the Empire Group in connection therewith shall be deemed to be Revenue for the purposes of this Agreement, and all expenses incurred in connection with such Online Gaming Service incurred by bet365 and the applicable member of the Empire Group shall be Costs consistent with the terms, conditions and limitations set forth in this Agreement. If bet365 elects not to provide the bet365’s Online Gaming Platform to the Empire Group for purpose of such Online Gaming Service, the net proceeds received by the applicable member of the Empire Group in connection therewith shall not be deemed to be Revenue for the purposes of this Agreement, and expenses incurred in connection with such Online Gaming Service incurred by the applicable member of the Empire Group shall not be Costs for purposes hereunder.

3.4Online Casino/Online Poker. If during the Term a NY Gaming Law is enacted allowing the offering of Online Casino/Table Games and/or Online Poker, then the Parties shall work in good faith, providing each other reasonable assistance in order for bet365 to manage, control and administer, utilizing the Operating License, such Online Gaming Services, subject to the terms of this Agreement. Such efforts and reasonable assistance (a) may include, in the case of Empire, contracting directly with Third Party providers and (b) in the case of Online Poker, shall be based on the Parties discussions regarding both the costs of integrating a Third Party poker product into bet365’s Online Gaming Platform and the commercial viability of Online Poker in NY. To the extent bet365 uses such good faith efforts, but is nevertheless unsuccessful in launching Casino/Table Games and/or Online Poker in NY, such failure shall not constitute a breach of this Agreement and, if permitted by the NY Gaming Law, Empire shall be entitled to utilize any Skins associated with such Online Casino/Table Games or Online Poker with a Third Party, the net proceeds received by the applicable member of the Empire Group in connection therewith shall not be deemed to be Revenue for the purposes of this Agreement. bet365 shall notify Empire as promptly as practicable after enactment of the NY Gaming Law related to the Online Casino/Table Games and/or Online Poker, as applicable, that it intends to launch the bet365 Online Casino/Table Games and/or bet365 Online Poker, as applicable, provided in no event shall such notice be provided later than within sixty (60) days of enactment of the Gaming Regulations of Online Casino/Table Games and/or Online Poker, as applicable.

3.4.1The bet365 Online Casino/Table Games and bet365 Online Poker shall be solely offered under the bet365 Brand and all bet365 Domain Names shall include such bet365 Brand. Notwithstanding the foregoing, if and as required by the NY Gaming Law, the bet365 Online Casino/Table Games and bet365 Online Poker shall include the Empire Brand or any other notice or disclosure indicating that the bet365 Online Casino/Table Games and bet365 Online Poker, as applicable, is utilizing the Operating License.

3.4.2To the extent the NY Gaming Law requires the bet365 Online Casino/Table Games and/or bet365 Online Poker to: (a) be co-branded with the Empire Brand (including as part of the bet365 Domain Names), then the Parties shall discuss in good faith a co-branding arrangement (provided, bet365 shall otherwise manage, control and administer all aspects of the bet365 Online Casino/Table Games and/or bet365 Online Poker as contemplated in this Agreement)

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

and bet365 shall be entitled to utilize the Empire Brand pursuant to Section 13.1 in order to comply with such Laws and the Parties shall work in good faith with the applicable Gaming Authority to minimize the impact on bet365 as a result of such co-branding (e.g., the Empire Brand shall be included as a second level domain name (after a “/” within the bet365 Domain Name)); or (b) be solely branded under an Empire Brand, then bet365 shall be entitled to utilize the Empire Brand pursuant to Section 13.1 to brand its Online Gaming Platform with the Empire Brand, but otherwise manage, control and administer the bet365 Online Casino/Table Games and/or bet365 Online Poker as contemplated in this Agreement. If the NY Gaming Law is subsequently amended to no longer require such Co-Branding, the bet365 Online Casino/Table Games and/or bet365 Online Poker, as applicable, shall be offered solely under a bet365 Brand, and bet365’s non-exclusive license and right to utilize the Empire Brand for co-branding pursuant to this Section 3.4.3 shall immediately and automatically terminate with respect to the applicable bet365 Gaming Service.

3.4.3To the extent an Empire Branded Online Sportsbook is offered in NY pursuant to Section 3.2.2 and bet365 is offering bet365 Online Casino/Table Games and/or bet365 Online Poker, then, at Empire’s request and subject to any relevant Third Party provider approval, such Empire Branded Online Sportsbook shall be configured to also include, as applicable, Online Casino/Table Games and/or Online Poker, which shall be managed, controlled and administered by bet365 under the Empire Brand as contemplated in Section 3.2.2 and, other than as specifically permitted by this Agreement, during the Term, Empire and the Operator shall not, directly or indirectly through any officer, director, employee, agent, owner, Affiliate or otherwise, in each case acting on behalf of Empire or the Operator, offer, or enter into any arrangement or agreement with a Third Party for offering of, Online Casino/Table Games and/or Online Poker in NY, including the licensing of any Empire Brand in connection with such Online Casino/Table Games and/or Online Poker. To the extent bet365 uses such good faith efforts, but is nevertheless unsuccessful in launching Casino/Table Games and/or Online Poker for whatever reason, Empire shall be free to contract with any Third Party for such Online Casino/Table Games and/or Online Poker that is not being offered by bet365 in NY.

3.5Operator Joinder. If, pursuant to the NY Gaming Law, Empire cannot obtain the Operating License for the Sportsbook Lounge, Online Sportsbook, Online Casino/Table Games or Online Poker, but another Affiliate of Empire can obtain such Operating License (i.e., Montreign), such Affiliate that obtains (or can obtain) the Operating License shall be the Operator for purposes of this Agreement and Empire shall cause such Affiliate to execute a joinder to this Agreement agreeing to be bound by all obligations applicable to the holder of the Operating License hereunder (and any reference in this Agreement to Operator shall be deemed to be a reference to such applicable Affiliate, unless the context requires otherwise).

3.6Gaming Approvals for Sportsbook.

3.6.1In the event a NY Gaming Law permitting Retail Sports Betting and/or an Online Sportsbook is enacted during the Term and, as a result of the enactment of such Law, bet365 will offer the bet365 Sportsbook Lounge Services pursuant to Section 5.1 and/or an Online Sportsbook pursuant to Section 3.2, each Transaction Party agrees to (or cause its appropriate Affiliate to) use commercially reasonable efforts to obtain all Governmental Approvals necessary

8

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

to consummate the transactions contemplated herein as soon as practicable following the enactment and effectiveness of such NY Gaming Law, including cooperating with all Governmental Entities in a timely fashion, complying with all filing deadlines and any requests of a Governmental Entity and, provided such application is consistent with the form applications required as of the Effective Date in connection with obtaining Gaming Approvals in NY, filing an initial application for each such Governmental Approval within 75 days following the first date that the NY Gaming Authorities formally accept applications for an Online Sportsbook under the NY Gaming. In connection therewith, the Parties shall work together to identify issues, if any and as applicable, which could affect the granting (or timing thereof) of any Gaming Approvals, including the Operating License or Service License. To the extent either Transaction Party identifies any such issues regarding the other Transaction Party or itself, a notice will be provided to the other Transaction Party. Upon the request of bet365, Empire shall, and shall cause the Operator to, use commercially reasonable efforts in assisting and helping bet365 in connection with securing such Gaming Approvals, including consulting with the relevant Gaming Authority.

3.6.2To the extent permitted by Law, each Transaction Party shall within five (5) Business Days provide the other Transaction Party with any notice, correspondence or other information received in connection with any Gaming Authority or Governmental Entity that reasonably could have a material adverse impact on the offering of Retail Sports Betting or an Online Sportsbook in NY. Each Transaction Party shall provide to the other Transaction Party copies of all Gaming Approvals received by it in connection with consummating the actions required by this Article 3 promptly after receipt thereof.

3.7Gaming Approvals for Online Casino/Table Games and Online Poker.

3.7.1In the event a NY Gaming Law permitting Online Casino/Table Games and Online Poker is enacted during the Term and, as a result of the enactment of such Law but subject always to Section 3.4, bet365 elects to offer Online Casino/Table Games or Online Poker, each Transaction Party agrees to (or cause its appropriate Affiliate to) use commercially reasonable efforts to obtain all Governmental Approvals necessary to consummate the transactions contemplated herein as soon as practicable following the enactment and effectiveness of such NY Gaming Law, including cooperating with all Governmental Entities in a timely fashion and complying with all filing deadlines and any requests of a Governmental Entity and, provided such application is consistent with the form applications required as of the Effective Date in connection with obtaining Gaming Approvals in NY, filing an initial application for each such Governmental Approval within 75 days following the first date that the NY Gaming Authorities formally accept applications for Online Casino/Table Games or Online Poker, as applicable, under the NY Gaming. In connection therewith, the Parties shall work together to identify issues, if any and as applicable, which could affect the granting (or timing thereof) of any Gaming Approvals, including the Operating License or Service License. To the extent either Transaction Party identifies any such issues regarding the other Transaction Party or itself, a notice will be provided to the other Transaction Party. Upon the request of bet365, Empire shall, and shall cause the Operator to, use commercially reasonable efforts in assisting and helping bet365 in connection with securing such Gaming Approvals, including consulting with the relevant Gaming Authority.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

3.7.2To the extent permitted by Law, each Transaction Party shall within five (5) Business Days provide the other Transaction Party with any notice, correspondence or other information received in connection with any Gaming Authority or Governmental Entity that reasonably could have a material adverse impact on the offering of Online Casino/Table Games or Online Poker in NY. Each Transaction Party shall provide to the other Transaction Party copies of all Gaming Approvals received by it in connection with consummating the actions required by this Article 3 promptly after receipt thereof.

ARTICLE 4OVERSIGHT COMMITTEE

4.1Establishment; Powers. The Parties shall form a committee of representatives from each Party to approve certain actions relating to this Agreement and the relationship between the Parties (this committee is referred to as the “Committee” and the individuals appointed to the Committee are referred to as the “OC Members”). The Committee agrees once it has sufficient information regarding the requirements of the NY Gaming Law, including applicable Gaming Regulations, to adopt an annual plan covering intended product developments for the Sportsbook Lounge or bet365 Gaming Service, as applicable (each, as adopted, an “Approved Plan”). Additionally, no Transaction Party shall take any of the following actions except if approved by the Committee:

4.1.1entry into any transaction relating to the Sportsbook Lounge, the Online Sportsbook, Online Casino/Table Games or Online Poker with Affiliates of a Transaction Party that are not on arms’ length terms;

4.1.2transfers or assignments of rights or obligations under this Agreement except as contemplated by Section 18.3;

4.1.3following the date upon which the Unrecouped Investment Costs have been reduced to zero, the incurrence of Costs that deviate from the amount incurred for such Costs in the previous year (i) by 25% for bet365 Labor Costs or Empire Labor Costs, as applicable, and (ii) by 25% for bet365 Marketing Costs or Empire Marketing Costs, as applicable, in each case unless such Costs (x) were not within the control of the Parties, including Emergency Expenditures, (y) resulted from modifications to the NY Gaming Law, or (z) were anticipated to be incurred in any previously Approved Plan.

4.1.4the execution, termination or amendment of material contracts related to the Sportsbook Lounge or bet365 Gaming Service that are entered into outside of the ordinary course of business and that could reasonably be expected to have a material impact on Revenues or Costs;

4.1.5the initiation, response to, or settling of material litigation with respect to the Sportsbook Lounge or bet365 Gaming Service that could reasonably be expected to materially increase Costs;

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

4.1.6a change in the branding of the Sportsbook Lounge or bet365 Gaming Service;

4.1.7the approval of an Additional Skin pursuant to Section 3.3.1(b); and

4.1.8any other material matters agreed to by the Parties, in writing, to be resolved by the Committee.

4.2Pro Rata Share and Percentage Threshold. The Committee shall have the right to review, analyze and amend the definition of “Pro Rata Share” and the scope of the bet365 Operational Costs to which it applies upon (a) the mutual agreement of the Parties, and (b) once every two (2) years following the Go-Live Date. Additionally, the Committee shall have the right to review, analyze and amend the percentage threshold for each of the applicable Cost’s deviation set forth in Section 4.1.2 upon (i) the mutual agreement of the Parties, and (ii) once every two (2) years following the reduction of the Unrecouped Investment Costs to zero.

4.3Appointment of OC Members. The number of OC Members shall be determined by the Committee from time to time, but shall all times be an even number and shall initially be four (4). bet365 shall be entitled to appoint two (2) OC Members (each, a “bet365 OC Member”), and Empire shall be entitled to appoint two (2) OC Members (each, an “Empire OC Member”). Each OC Member shall (i) be deemed a Representative of such Party for purposes of Section 14.1, and (ii) hold office until his or her successor shall have been appointed or until his or her earlier death, resignation or removal. Further in the event of (a) a Change of Control of Empire or the Operator to a Highly Competitive Business or Competitive Business, the OC Member appointed by Empire shall be an independent Third Party or (b) a Change of Control of bet365 to a Highly Competitive Business or Competitive Business, the OC Member appointed by bet365 shall be an independent Third Party.

4.4Vacancies. In the event of a vacancy in the office of any bet365 OC Member, a successor shall be appointed to hold office by bet365. In the event of a vacancy in the office of any Empire OC Member, a successor shall be appointed to hold office by Empire. In the event of an increase in the number of OC Members, each of bet365 and Empire shall be entitled to appoint an equal number of such new OC Members, who shall each be deemed a bet365 OC Member or Empire OC Member, as applicable. An OC Member so appointed shall hold office until his or her successor is duly appointed or until his earlier death, resignation or removal.

4.5Removal. An OC Member may be removed at any time upon delivery of a written instruction to the Committee by the Party appointing such OC Member; provided, however, that, (a) if an OC Member is deemed an Unsuitable Person, such OC Member shall be immediately removed and (b) in all cases, the vacancy of any OC Membership resulting from any OC Member so removed shall be filled in accordance with Section 4.3.

4.6Resignation. An OC Member may resign at any time by giving written notice to that effect to the Committee. Any such resignation shall take effect at the time of the receipt of that notice or any later effective time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any vacancy

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

caused by any such resignation or by the death of any OC Member or any vacancy for any other reason shall be filled as provided in Section 4.3, and any OC Member so elected to fill any such vacancy shall hold office until his successor is appointed or until his earlier death, resignation or removal.

4.7Meetings of the Committee. The Committee shall meet at such time and at such place as the Committee may designate. Meetings of the Committee shall be held on the call of either Party upon at least 24 hours written notice to the OC Members, or upon such shorter notice as may be approved by all of the OC Members. Any OC Member may waive such notice. A record shall be maintained of each meeting of the Committee. Reasonable efforts shall be made to hold Committee meeting during business hours in New York.

4.8Conduct of Meetings. Any meeting of the Committee may be held in person and by means of a conference, telephone or similar communication equipment by means of which all OC Members and other individuals participating in the meeting can hear each other, and such telephone or similar participation in a meeting shall constitute presence in person at the meeting.

4.9Quorum. One bet365 OC Member and one Empire OC Member then in office present in person shall constitute a quorum of the Committee for purposes of conducting business. At all times when the Committee is conducting business at a meeting of the Committee, a quorum of the Committee must be present at such meeting. If a quorum shall not be present at any meeting of the Committee, then the OC Members present at the meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

4.10Voting. Any decisions to be made by the Committee must be approved by the affirmative vote of at least one bet365 OC Member and one Empire OC Member then in office entitled to vote on the subject matter thereof. Each OC Member shall be entitled to one vote per issue presented at any duly convened meeting.

4.11Proxies. For purposes of determining a quorum with respect to a particular proposal, and for purposes of casting a vote for or against a particular proposal, an OC Member may be deemed to be present at a meeting and to vote if the OC Member has granted a written proxy (which shall include email) to another OC Member or another Person selected by such OC Member and employed by the Party approving such OC Member who is present at the meeting, authorizing the other OC Member or Person to attend and cast any vote at the meeting.

4.12Attendance and Waiver of Notice. Attendance of an OC Member at any meeting shall constitute a waiver of notice of such meeting, except where an OC Member attends a meeting for the express purpose of objecting to the transaction of any business at such meeting on the grounds that the meeting is not called or convened in accordance with the terms of this Agreement. Neither the business to be transacted at, nor the purpose of, any meeting of the Committee need be specified in the notice or waiver of notice of such meeting.

4.13Actions Without a Meeting. Notwithstanding any provision contained in this Agreement, any action of the Committee may be taken by written consent without a meeting. Any such action taken by the Committee without a meeting shall be effective only if the written consent

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

or consents are in writing, set forth the action so taken, and are signed by the requisite number of OC Members necessary to approve the action so taken.

4.14Compensation of OC Members. Unless approved by the Committee, the OC Members shall not be entitled to compensation, or any cost reimbursement, for serving on the Committee.

4.15Deadlocks. The OC Members recognize that their respective opinions may from time to time differ with respect to matters presented to the Committee, and further recognize that the OC Members may from time to time be unable to act because of a Deadlock. In the event of a Deadlock, each Party may request a meeting between senior executives of Empire and bet365 with the power and authority to resolve such Deadlock. Within five (5) days of such request, such senior executive shall meet either in person or by telephone or similar communication equipment to discuss and work in good faith to resolve such Deadlock. A “Deadlock” shall be deemed to exist if (i) during any 30-day period on three or more occasions, the Committee (1) fails to pass a resolution by the requisite vote required by this Agreement for or against a particular action that has been discussed and presented for resolution by the Committee, (2) the OC Members fails to hold a meeting (after proper notice and calling thereof) for approval of the same action, due to a lack of a quorum; provided that if one of the Party’s respective OC Members have caused such a failure to hold a meeting on two (2) or more consecutive occasions, such Party may not request a meeting of the senior executives in accordance with this Section 4.1.7(h) or (3) a combination thereof.

ARTICLE 5SPORTSBOOK ADMINISTRATION

5.1Administration of Sportsbook Lounge. Subject to any limitations imposed by applicable Gaming Laws and except as specifically set forth in this Agreement, following the Sportsbook Lounge Transition, the Sportsbook Lounge shall be operated under a bet365 Brand and bet365 shall (a) design and manage the Sportsbook Lounge Betting Platform including, updating, replacing and maintaining the bet365 Equipment associated with such Sportsbook Lounge Betting Platform from time to time, (b) provide trading, odd and price setting, data feeds, business intelligence and otherwise manage the Sportsbook Lounge risk, (c) advisory services regarding marketing the Sportsbook Lounge within the Catskills Casino, and (d) determining, where appropriate, inclusion of the Sportsbook Lounge within marketing of the bet365 Gaming Service (the “bet365 Sportsbook Lounge Services”). Notwithstanding such Sportsbook Lounge Transition to bet365, the Operator shall remain responsible for the day-to-day operations of the Sportsbook Lounge, including (i) any marketing of the Sportsbook Lounge other than in connection with the bet365 Gaming Service, (ii) hiring, training, supervising, discharging and establishing the policies and other terms of employment of all personnel as may be reasonably required for such operations, (iii) compliance with applicable NY Gaming Law, providing cashier obligations, including processing Retail Sports Betting, carrying out checks to verify the age and whether any Sportsbook Lounge bettor is excluded from play (including self-exclusion) and defending and settling any disputes of Sportsbook Lounge bettors, (iv) managing, in compliance with applicable Law, any complimentaries awarded to Sportsbook Lounge bettors; (v) subject to normal wear and tear, maintaining, repairing and generally keeping the Sportsbook Lounge clean and in good working

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

order, (vi) providing appropriate security and surveillance for the Sportsbook Lounge, including the hiring and supervision of security personnel, subject to applicable Law, (vii) arrange for cable or satellite television package, including premium sports content, (viii) providing food and beverage service to the Sportsbook Lounge and (ix) promptly providing bet365 with all information, reports and data as required by this Agreement (the “Empire Sportsbook Lounge Services”).

5.2Administration of bet365 Gaming Service.

5.2.1Subject to any limitations imposed by applicable Gaming Laws and except as specifically set forth in this Agreement, bet365 shall manage, administer and control all aspects of the bet365 Gaming Service, including (a) the development, operation, enhancements, upgrades, updates, fixes, additions, substitutions and replacements of all or any component thereof; (b) updating, replacing and maintaining the bet365 Equipment associated with the bet365 Gaming Service; (c) providing and maintaining any websites, mobile applications, and domain names; (d) determining the features and functionality associated with the bet365 Gaming Service; (e) marketing and promotion of the bet365 Gaming Service; (f) day-to-day management of the bet365 Players, including Verification Checks, fraud monitoring and control; (g) management of Player Incentives and Player-Related Costs; (h) customer service functions, including prompt resolution of any bet365 Player disputes; (i) providing the payment processing system and services appurtenant thereto, including payment of all bet365 Player withdrawals; (j) promptly providing to Empire all information, reports and data necessary for Empire to timely comply with all Gaming Laws and other Laws applicable to Empire or respond to any inquiries or investigations by Gaming Authorities in relation to the bet365 Gaming Service; and (k) except for the Empire Obligations, any other required function or service reasonably required or necessary to deliver or operate the bet365 Gaming Service in a manner consistent with generally accepted industry practices (the “bet365 Online Obligations”). bet365 shall comply with applicable Laws, including all applicable Gaming Laws, in performing such bet365 Obligations and shall in good faith consider all reasonable input of Empire with respect to the bet365 Online Obligations.

5.2.2bet365 will perform (or procure that a Third Party performs) the bet365 Obligations, including all network administration, application operations and technical and software support (including error corrections) and Enhancements for the bet365 Gaming Service and its Online Gaming Platform and ongoing maintenance, service and support for the bet365 Equipment in accordance with industry standards and the practices bet365 generally uses within its other online gaming businesses, all in accordance with applicable Gaming Laws. Subject to applicable Gaming Laws, bet365 will make commercially reasonable provision for backup and disaster recovery of the applicable bet365 Gaming Service. Notwithstanding the foregoing, Operator shall be responsible for providing those services to bet365 that are required to be performed by the holder of the Operating License under the NY Gaming Law.

5.2.3bet365 shall use commercially reasonable efforts to cause (a) the Go-Live Dates for the applicable bet365 Gaming Service as soon as possible after the Market Opening Date and (b) the bet365 Gaming Service to be competitive within NY.

5.3Subcontractors. Notwithstanding anything to the contrary in this Agreement, and subject to NY Gaming Law, bet365 shall be entitled to use contractors or subcontractors to perform

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IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

or assist with the bet365 Sportsbook Lounge Services and bet365 Online Obligations (each, a “Subcontractor”); provided, that bet365 (a) obtains the prior written consent of Empire, which shall not be unreasonably withheld, conditioned or delayed and may only be conditioned on reasonable concerns about compliance with applicable Gaming Laws or that such subcontractor is an Unsuitable Person and (b) shall remain primarily liable under all applicable provisions of this Agreement.

5.4Domain Names. bet365 will acquire, set up and maintain registration of the domain names (or designate an existing domain name or names that bet365 or one of its Affiliates already own) for use with the offering of the bet365 Gaming Service (collectively, the “bet365 Domain Names”). To the extent applicable, Empire will acquire, set up and maintain registration of the domain names (or designate an existing domain name or names that Empire or one of its Affiliates already own) for use with the offering of the Empire Branded Online Sportsbook (collectively, the “Empire Domain Names”).

5.5NY Provisioning. bet365 shall employ commercially reasonable testing methods to verify the operation of the bet365 Gaming Service, including any such methods mandated under applicable Gaming Laws. The Parties intend that the bet365 Gaming Service shall be developed or adapted and have satisfactorily passed any testing so as to conform to the requirements and specifications mandated by the NY Gaming Law.

5.6Empire Compliance Services.

5.6.1Solely to the extent required under the NY Gaming Law, the Operator will provide bet365 with, and be responsible for the regulatory oversight and services set forth in Schedule B hereto (the “Compliance Services”). Upon enactment of a NY Gaming Law, the Parties shall modify and amend the Compliance Services set forth on Schedule B to be in compliance with applicable Laws, including the NY Gaming Law. Notwithstanding the foregoing, if permitted by applicable Law, bet365 shall have the right to request that it assume any Compliance Service, and the Operator shall utilize its commercially reasonable judgment, taking into account all legal and regulatory risks, in determining whether to grant such consent. If such consent is granted, the Operator shall cooperate in the transition of such Compliance Service.

5.6.2Empire, or if applicable the Operator, shall designate or hire a senior executive dedicated to ensuring provisioning of the Compliance Services and to manage the relationship the Gaming Authority regarding the Sportsbook Lounge and bet365 Gaming Service, the sports leagues (if necessary or appropriate) and be the primary point of contact for bet365 with respect to its rights and obligations under this Agreement (the “Dedicated Empire Executive”).

5.7Insurance.

5.7.1Each of bet365 and the Operator shall be covered by insurance that covers claims which may arise out of or result from the operations or performance under this Agreement by such Transaction Party, whether such operations or performance be by such Transaction Party, its Affiliates or by any Subcontractor directly or indirectly employed by it, or for whose acts any of them may be liable.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

5.7.2In addition, Empire shall, at all times, keep and maintain (or cause Montreign to keep and maintain) in full force and effect customary and industry standard insurance policies and coverages (including public liability insurance) for a land based casino, which policies shall cover the Sportsbook Lounge, updated from time to time during the Term.

5.7.3For all policies, the insurance coverage shall be primary and not contributory. All general liability insurance shall be written on an ISO “on occurrence” form. bet365 and the Operator shall each deliver to the other upon execution of this Agreement and again on the Sportsbook Lounge Transition and on the Go-Live Date a certificate or certificates of insurance evidencing satisfactory coverage. All insurance shall be carried by an insurer with an A.M. Best rating of A-VIII or better. Compliance with this insurance requirement or the setting of the minimum required levels of insurance shall in no way limit such Transaction Party’s liability or indemnity obligations under the Agreement to the amount of insurance required.

5.7.4In the event of a casualty event with respect to the Sportsbook Lounge, the Parties shall discuss in good faith the use of the insurance proceeds received by the Operator in connection therewith (i.e., whether to reinvest such proceeds and restore the Sportsbook Lounge or include such proceeds as Revenue).

5.8Empire Players Club. bet365 shall use commercially reasonable efforts to create, by the Go-Live Date, functionality within the bet365 Gaming Service to permit bet365 Players to provide details of their Empire Players Club membership number through the bet365 Gaming Service. For any Empire Players Club membership numbers captured by the bet365 Gaming Service, bet365 shall generate corresponding bet365 Player transactional reports which document bet365 Player activity through the bet365 Betting Service, and, at such frequency as determined by the Parties, provide such data to Empire for Empire to use independently to reward Players in accordance with the terms and conditions of the Empire Players Club program. The Parties shall use their commercially reasonable efforts in connection with such integration. Notwithstanding the foregoing, as bet365’s technological capabilities further develop in the USA, both Parties agree to review the concept of an automated system that allows for the sharing of bet365 Player data and rewards points between the bet365 Gaming Service and Empire, including the Empire Players Club.

ARTICLE 6ADVOCACY

6.1Advocacy Efforts. Immediately following the Effective Date, Empire and bet365 shall engage in advocacy efforts in NY and in doing so will: (a) work diligently in good faith to permit the transactions contemplated in this Agreement, including and specifically permitting an Online Sportsbook for a state-wide offering in NY, allowing only one branded Skin (and utilizing any Domain Name) that the holder of the Operating License elects, Gaming Taxes of [***]% of gross gaming revenue or less and no requirement for specific personnel to be located in NY; (b) promptly and regularly, keep the other Party informed of its efforts with respect to such advocacy efforts (unless such disclosure would violate any confidentiality agreement to which such Party or its Affiliates is subject); and (c) keep the other Party generally informed of its understanding of the status of legislative initiatives (including draft bills and legislation) that may give rise to a NY Gaming Law for an Online Sportsbook. Each Party acknowledges and agrees that (i) the other

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

Party shall, in its sole discretion, determine the amount of resources it devotes to the advocacy effort, including the amount of money it spends, and (ii) the success of the advocacy effort is uncertain, and that failure of the enactment of a NY Gaming Law permitting the Operator to obtain an Operating License or allow bet365 to offer its Online Sportsbook as contemplated herein shall not result in a breach of this Agreement. Each Party will provide assistance with respect to such advocacy efforts as reasonably requested by the other Party.

ARTICLE 7REGULATORY COMPLIANCE

7.1Privileged Licenses.

7.1.1Each Transaction Party acknowledges that the other Transaction Party and its Affiliates conduct businesses that are subject to and exist because of privileged licenses issued by Gaming Authorities. Each Transaction Party acknowledges as well that such Gaming Authorities may revoke, suspend, limit or restrict any registrant, licensee or person found suitable for a Gaming Approval if associated with an Unsuitable Person or entity.

7.1.2No Transaction Party, or, to the best of its knowledge, none of its Affiliates, is a Federally Prohibited Person or Gaming Prohibited Person (each as hereinafter defined), and each Transaction Party is in compliance with all applicable orders, rules, regulations, and recommendations of the Office of Foreign Assets Control of the U.S. Department of the Treasury and any Laws relating to terrorism or money laundering including Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and regulations of the U.S. Treasury Department’s Office of Foreign Assets Control the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56) (the “USA PATRIOT Act”), and the Money Laundering Control Act (18 United States Code Sections 1956 and 1957). No Transaction Party will knowingly engage in a business relationship with a Federally Prohibited Person or Gaming Prohibited Person during the Term.

7.1.3In connection with their respective responsibilities and obligations under this Agreement, bet365 and the Operator shall comply, and cause their respective subcontractors to comply, with all applicable Laws related to anti-corruption, anti-money laundering, and gaming (as applicable in the NY), including those governing the providing of incentives, inducements, kickbacks, gratuities or bribes, including the U.S. Foreign Corrupt Practices Act of 1977 (FCPA) (15 U.S.C. §§ 78dd-l, et seq.) which preclude giving, offering or agreeing to give anything of value to foreign government officials or holders of and candidates for public office or political parties, their families and agents, directly or indirectly, in connection with obtaining or maintaining contracts or orders or obtaining other benefits.

7.2Gaming Compliance Modifications/Notification.

7.2.1The Parties agree to work together in good faith to address any issue not contemplated by this Agreement or any of the Schedules, while preserving the transactions contemplated hereunder and thereunder, following enactment of a NY Gaming Law (or the Gaming Regulations in the case of Retail Sports Betting). Subject to the terms and conditions of this

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

Agreement and applicable Law, each of the Parties shall use their respective commercially reasonable efforts to take or cause to be taken all actions and to do or cause to be done all things reasonably necessary, proper or advisable under applicable Law to make effective the transactions contemplated by this Agreement.

7.2.2Following enactment of a NY Gaming Law allowing the offering of an Online Sportsbook, Online Casino/Table Games and/or Online Poker, the Parties shall work together to monitor and assess such Law and any subsequent changes to such Law that affect the operation and promotion of the bet365 Gaming Service and will consult in good faith if any regulation or change in regulation materially affect the bet365 Gaming Service. To the extent that bet365 has a good faith concern that, as a result of unforeseen overly onerous provisions of the NY Gaming Law (provided that the requirement for in-person registration at multiple physical locations for an Online Sportsbook or multiple Skins will not be deemed to be an overly onerous provisions), it will not be commercially viable to operate the bet365 Gaming Service, then the Parties shall discuss in good faith and engage in advocacy efforts similar to those required by Article 6 to modify such NY Gaming Law. To the extent following such discussions or such advocacy efforts, if in bet365’s good faith opinion it will not be commercially viable to operate the bet365 Gaming Service, bet365 can terminate this Agreement pursuant to Section 16.2.4.

7.2.3During the Term and following receipt of such Gaming Approval or other Governmental Approval, each Transaction Party shall maintain and preserve all of its Gaming Approvals and other Governmental Approvals required in order to undertake or facilitate its activities under this Agreement, including, as applicable, its Operating License and Service License, and at all times ensure compliance with all applicable Gaming Laws, including the NY Gaming Law.

7.2.4During the Term and following receipt of the requisite Gaming Approvals, each Transaction Party shall inform the other Transaction Party within five (5) Business Days of receipt of any notice, correspondence or other information received by it or one of its Affiliates from such Gaming Authority or any other Governmental Entity, which reasonably could have a material adverse impact on maintaining such Gaming Approval. In addition, Empire shall inform bet365 within five (5) Business Days of receipt of any notice, correspondence or other information received by it or the Operator from any Gaming Authority or Governmental Entity in connection with the bet365 Gaming Service (including, for the avoidance of doubt, any such notice, correspondence or other information received in connection with the payment or imposition of Gaming Taxes).

7.2.5No Transaction Party shall be in breach of this Agreement with respect to any action or omission if taken in order to comply with applicable Law, including the NY Gaming Law. In addition, no Transaction Party shall require the other to act in any way that would cause the other Transaction Party to be in breach of applicable Laws, including the NY Gaming Law.

7.2.6bet365 and the Empire Group shall cooperate with any Governmental Entity that has proper jurisdiction over Retail Sports Betting or an Online Sportsbook under the NY Gaming Law, if there is any request for information or investigation in relation to such Online Sportsbook to the extent required by applicable Laws. In such event, the Party or its Affiliate that is subject to the request for information or investigation shall (providing that they are not bound by

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

a duty of confidentiality towards the Governmental Entity making such request or conducting such investigation) promptly give written notice to the other Party of such request or investigation, providing reasonable details.

7.2.7The Transaction Party shall cooperate with any Governmental Entity that has proper jurisdiction over the Sportsbook Lounge or bet365 Gaming Service under the NY Gaming Law or otherwise, if there is any bona fide request for information or investigation in relation to the bet365 Gaming Service to the extent required by applicable Laws. In such event, the Transaction Party that is subject to the request for information or investigation shall (provided that they are not bound by a duty of confidentiality towards the Governmental Entity making such request or conducting such investigation) promptly give written notice to the other party of such request or investigation, providing reasonable details.

7.3Compliance with Bribery Laws. In performing their obligations under this Agreement, no Transaction Party or any of its Affiliates shall engage in any activity, practice or conduct which would constitute a violation under any applicable Bribery Laws. Each Transaction Party and each of its Affiliates shall have in place during the Term reasonable procedures designed to prevent such party and its Affiliates from violating any Bribery Laws when engaging in activities in connection with this Agreement, including bribing another Person with the intention of obtaining or retaining business or an advantage in the conduct of business for itself or one of its Affiliates in violation of any Bribery Laws.

7.4Online Gaming Verification. bet365 shall implement Verification Checks with respect to the bet365 Gaming Service that meet industry standards that are compliant with the NY Gaming Law.

7.4.1bet365 shall develop, implement and maintain data security policies, protocols and systems, including firewalls, security patches, anti-virus software, and data encryption processes, designed to reasonably protect in accordance with industry standards all Customer Data and other data on the bet365 Gaming Service servers and systems against any data security breaches.

ARTICLE 8FACILITIES

8.1Equipment. To the extent the bet365 Equipment is required by the NY Gaming Law to be located within NY or if requested by bet365, the Operator agrees to provide space within the Catskill Casino, as applicable, to host bet365 Equipment necessary for operating the bet365 Gaming Service (the “Facility”). The cost of all improvements to all supporting systems, facilities, fixtures and other general infrastructure associated with the Facility (such as air conditioning and air filtering systems, fire protection and other environmental, health and safety systems, racks, electrical control panels and wiring, data and telecom lines with appropriate bandwidth, etc.), as well as expenses related to the ongoing servicing or supplying utilities (including, power, Internet connectivity and cooling) to the Facility (the “Facility Expenses”) shall be considered a Cost.

8.2License. If required by Section 8.1, subject to compliance with all applicable Laws, the Operator hereby grants bet365 a non-exclusive license with respect to the Facility to (a) access

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

and occupy the Facility and (b) install, operate, maintain and repair any bet365 Equipment therein (the “Equipment Room License”). No additional charge or fee shall be due to the Operator for the Equipment Room License.

8.3Equipment Room License Terms. As part of such Equipment Room License:

8.3.1bet365 shall have, as appurtenant to the Equipment Room License, non-exclusive rights to access common walkways necessary for access to the Facility.

8.3.2bet365 shall provide the Operator (and shall keep up to date) a list of the bet365’s employees, agents, subcontractors and contractors who will be entering the Facility on behalf of bet365 (“Authorized bet365 Personnel”).

8.3.3During the Term, bet365 and its Authorized bet365 Personnel can (a) use the bet365 Equipment, (b) install, operate, maintain and repair any bet365 Equipment within the Facility, and (c) have non-exclusive rights to access the Facility 24 hours a day, seven days a week utilizing common walkways within Catskill Casino, as necessary for access to the Facility.

8.3.4Authorized bet365 Personnel shall agree to adhere to the Operator’s reasonable policies regarding access to the Facility. Notwithstanding anything in this Section 8.3.4 to the contrary, bet365 may, free of charge, retain the bet365 Equipment in the Facility for up to 60 days after the expiration or earlier termination of this Agreement and retain access to the Facility by Authorized bet365 Personnel for the sole purpose of removing the bet365 Equipment. bet365’s access to the Facility for this purpose shall be subject to all of the terms and conditions of this Agreement.

8.3.5The Facility shall be operated subject to security protocols designed to maintain the security of the Facility in accordance with both NY Gaming Law and the Operator’s standard practices and procedures for its facilities. To the extent permitted by the NY Gaming Law, bet365 shall be permitted to setup, maintain and operate a backup data center if it chooses to do so in its sole discretion, all expenses of which shall be considered a Cost. Notwithstanding anything to the contrary in this Agreement, subject to NY Gaming Law, bet365 may implement and maintain on bet365 Equipment such physical, technical and administrative safeguards in connection with the bet365 Gaming Service as it deems necessary, in bet365’s sole and absolute discretion, to restrict access to Customer Data only to those with authorized access by bet365.

ARTICLE 9ACCOUNTS

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

9.1Player Accounts. Subject to the requirements of the NY Gaming Law, bet365 shall set-up and maintain the number, type, transfer and processing procedures (including process for disputed transfers), funds flow, ownership and other details with respect to the deposit accounts necessary to operate the bet365 Gaming Service consistent with the NY Gaming Law, including the creation of a bank account in accordance with the NY Gaming Law for Player’s deposits and withdraws (the “Player Accounts”).

9.2Security Interest. In no event shall any Transaction Party grant any security interest, lien or encumbrance in any of its right, title and interest in the Player Accounts, including any credits or proceeds thereto and all monies, checks and other instruments held or deposited therein credits and proceeds thereto.

ARTICLE 10REPORTS

10.1Gaming Taxes. Subject to the requirements of applicable Law, the Parties shall discuss in good faith and mutually determine who shall be responsible for: (a) remitting all NY Gaming Taxes to the applicable NY Governmental Entity, and for submitting to the applicable NY Governmental Entity the reports related to the NY Gaming Tax owed in connection with the Sportsbook Lounge and the bet365 Gaming Service; (b) remitting all Federal Gaming Taxes to the applicable Governmental Entity, and for submitting to the applicable Governmental Entity the reports related to the Federal Gaming Tax owed in connection with the Sportsbook Lounge and the bet365 Gaming Service; and (c) accounting for the Player Withholding Taxes as required by applicable Law in connection with the Sportsbook Lounge and bet365 Gaming Service. The Parties shall work together in good faith to respond and address any request of a Governmental Entity regarding the Gaming Tax owed in connection with the Sportsbook Lounge or the bet365 Gaming Service.

10.2Reporting. In furtherance of its obligations in this Agreement, but subject to its obligations as determined under Section 10.1, (a) the Operator shall comply with all applicable and material provisions of the Internal Revenue Code of 1986, as amended (the “Code”) and the applicable Tax Laws, including, if applicable, the prompt providing or filing, as applicable, of any CTRs, SARCs, W-2Gs, 1099 reports and any other forms, reports or information that may be required by the Code or under applicable Law with respect to the Sportsbook Lounge and the Retail Sports Betting conducted therein and (b) bet365 shall comply with all applicable and material provisions of the Code and the applicable Tax Laws, including, if applicable, the prompt providing or filing, as applicable, of any CTRs, SARCs, W-2Gs, 1099 reports and any other forms, reports or bet365 Player information that may be required by the Code or under applicable Law.

10.3Books and Records. The Operator shall prepare and maintain (in accordance with its then-current accounting practices, systems and procedures) accurate and complete books of accounts relating to the operations of the Sportsbook Lounge. bet365 shall prepare and maintain (in accordance with its then-current accounting practices, systems and procedures) accurate and complete books of accounts relating to the operations of the bet365 Gaming Service. Subject to any requirements imposed under applicable Gaming Laws, the accounting practices used by each Transaction Party to prepare and maintain such books and accounts shall be in conformity with

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

GAAP consistently applied, and the accounting systems and procedures so used by such Transaction Party shall not be inconsistent with applicable Law and, at a minimum, shall (a) include an adequate system of internal accounting controls; (b) permit the preparation of financial statements in accordance with GAAP; and (c) be susceptible to audit.

10.4Cooperation. Each Transaction Party agrees that it will use its commercial reasonable efforts to cooperate with, and provide financial information, including supporting documentation, to the other Transaction Party hereto, as is reasonably necessary for such other Transaction Party to cause the preparation of audited financial statements, or the preparation of any other Tax filing, or other report submitted to any Governmental Entity including the U.S. Securities and Exchange Commission. Further, the Parties will use their commercially reasonable efforts to coordinate the release of any public disclosure regarding the financial results of the Sportsbook Lounge or bet365 Gaming Service.

ARTICLE 11VENDOR AGREEMENTS

11.1Vendor Contracts.

11.1.1Solely when required by either (a) a Third Party providing services to the bet365 Gaming Service (a “Vendor”) as a result of the fact that the Operator holds the Operating License or (b) a Gaming Authority pursuant to applicable NY Gaming Law, the Operator shall be a co-signatory with bet365 to contracts associated with operation of the bet365 Gaming Service, and any amendments thereto (the “Vendor Contracts”).

11.1.2Each of bet365 and the Operator hereby covenants and agrees that it shall promptly provide such other Transaction Party a copy of any communication or notice, whether written or oral, delivered by it to a Vendor or received from a Vendor relating to the Vendor Contracts, and shall cooperate with such other Transaction Party with respect to communications with the Vendors.

11.1.3The Transaction Parties hereby covenant and agree that they shall not modify or terminate any Vendor Contract without the prior written consent of the other Transaction Party thereto, such consent not to be unreasonably withheld, conditioned or delayed; provided, however, in the event such Vendor is or may be an Unsuitable Person, or may cause any adverse consequence to the Operating License or Service License, as applicable, or any other regulatory license or permission maintained by the Transaction Parties or their respective Affiliates, the Transaction Parties party thereto shall have the right to terminate such Vendor Contract without the other Transaction Party’s consent.

11.1.4In the event a Vendor Contract will be terminated in accordance with Section 11.1.3, the terminating Transaction Party shall inform the other Transaction Party of that decision and the non-terminating Transaction Party shall promptly cooperate and use commercially reasonable efforts to effectuate such termination in a reasonable time and manner that permits an orderly transition of the services provided under such Vendor Contract to a new Vendor.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

11.1.5The Parties acknowledge and agree that (a) all amounts owed from a Vendor under the Vendor Contracts shall be considered Revenue and (b) all amounts owed to Vendor under the Vendor Contract shall be considered a Cost.

ARTICLE 12FEES & ACCOUNTING

12.1Statements.

12.1.1The Operator shall provide bet365 with a weekly gross revenue report for each gaming week at a time mutually agreed to by the Parties, but in accordance with the NY Gaming Law. Following the applicable Go-Live Date, bet365 shall provide Empire with a weekly gross revenue report for each gaming week within ten (10) hours following the completion of such gaming week (or such other period defined in the NY Gaming Law or Law).

12.1.2Within 30 days of the earlier of (a) the Go-Live Date of the bet365 Online Sportsbook, and (b) the date of the Sportsbook Lounge Transition, Empire shall submit to bet365 an invoice (the “Transition Date Invoice”) that describes in reasonable detail, and provides reasonable evidence of, the Reimbursed Lounge Costs and the Costs and Revenue prior to such date, that Empire seeks reimbursement of pursuant to Section 3.1.3.

12.1.3Within 30 days of the end of each calendar month (or such other period necessary to comply with NY Gaming Law or Law) the Operator shall provide bet365 with a monthly operating statement relating to the Sportsbook Lounge for the prior calendar month, setting forth in reasonable detail the Sportsbook Lounge GGR for such prior month and Gaming Taxes due and owing in connection therewith. Following the Sportsbook Lounge Transition, such statement shall include an invoice for any Costs incurred by a member of the Empire Group related to the Sportsbook Lounge for such prior calendar month, which invoice shall describe in reasonable detail, and provide reasonable evidence of, such Costs (an “Empire Sportsbook Lounge Invoice”).

12.1.4Following the applicable Go-Live Date (or such other period necessary to comply with NY Gaming Law or Law), within 30 days of the end of each calendar month, or termination of this Agreement for any reason, to the extent that any member of the Empire Group has incurred any Costs related to the bet365 Gaming Service for such prior calendar month, Empire shall provide bet365 an invoice (an “Empire Online Gaming Service Invoice,” and together with the Transition Date Invoice and the Empire Sportsbook Lounge Invoice, an “Invoice”) that describes in reasonable detail, and provides reasonable evidence, of such Costs.

12.1.5Within 30 days following receipt of the applicable monthly Invoice (or such other period necessary to comply with NY Gaming Law or Law), in each case following the earlier of the Sportsbook Lounge Transition or the Go-Live Date, bet365 shall provide Empire with a monthly operating statement relating to the Sportsbook Lounge and the bet365 Gaming Service for the prior calendar month (the “Monthly Statement”), setting forth in reasonable detail bet365’s calculation of Revenue and all Costs for the immediately preceding month, with reasonable specificity and evidence of the same, and detailing the transfer of funds as contemplated by Section 12.2 and Section 12.3.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

12.2Funding of Costs.

12.2.1All amounts for Reimbursed Lounge Costs on a Transition Date Invoice shall be paid by bet365 within 30 days of receipt of the Transition Date Invoice.

12.2.2Following the Sportsbook Lounge Transition Date, all Costs associated with the Sportsbook Lounge shall be a Cost and deducted from Revenue pursuant to Section 12.3.2; provided, however, if there is insufficient Revenue to pay such amounts pursuant to Section 12.3.2, bet365 shall be obligated to pay or reimburse, as applicable, such Shortfall and bet365 shall be able to recoup such Shortfall pursuant to Section 12.3.4.

12.2.3Following the applicable Go-Live Date, all Costs associated with the bet365 Gaming Service, including amounts set forth in an Empire Online Gaming Service Invoice, shall be funded out of Revenue pursuant to Section 12.3.2; provided, however, if there is insufficient Revenue to pay such amounts pursuant to Section 12.3.2, bet365 shall be obligated to pay or reimburse, as applicable, such Costs and such amount paid or reimbursed by bet365 shall be deemed a Shortfall and bet365 shall be able to recoup such Shortfall pursuant to Section 12.3.4.

12.2.4Notwithstanding anything herein to the contrary, (a) if any bet365 Operational Costs, bet365 Equipment or Acquisition Marketing Costs are not solely dedicated to the Sportsbook Lounge or bet365 Gaming Service (i.e., they also benefit an online gaming service offered by bet365 in another state within the USA), then bet365 shall only be entitled to recover its Pro Rata Share of such Costs, (b) in no event shall Costs include any advertising or marketing costs incurred by Empire or its Affiliates related to the Catskill Casino generally, regardless if such advertising or marketing also includes the Sportsbook Lounge; but Costs can include an amount, not to exceed $[***] per annum, incurred by Empire or its Affiliates for specific and direct marketing of the Sportsbook Lounge and (c) in no event shall Costs include any amounts owed to RW Services PTE Ltd in connection with use of the Empire Brand and Empire agrees it shall be solely responsible for payment of any such amounts.

12.3Retained Revenue. All Revenue received during any calendar month following the Sportsbook Lounge Transition or a Go-Live Date shall be distributed as follows:

12.3.1first, an amount necessary to satisfy all Gaming Taxes levied on the Sportsbook Lounge (following the Sportsbook Lounge Transition) or the bet365 Gaming Service shall be either paid to the applicable Governmental Entity to pay such Gaming Tax or to the applicable Transaction Party, which in turn will have an obligation to remit to the applicable Governmental Entity;

12.3.2second, to pay any Costs reimbursing Empire for any amounts set forth in the Transition Date Invoice with respect to the Lounge Operations Costs or the most current Empire Sportsbook Lounge Invoice or Empire Online Gaming Service Invoice;

12.3.3third, to reimburse bet365 for any Costs it funded during the previous month;

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

12.3.4fourth, to bet365 until bet365 has received an amount equal to its Unrecouped Shortfall;

12.3.5fifth, to bet365 until bet365 has received an amount equal to its Unrecouped Investment Costs;

12.3.6sixth, if a Common Stock Delta exists, then bet365 shall receive the Monthly Preferred Distribution until bet365 has received an amount equal to the Unrecouped Preferred Distribution;

12.3.7seventh, if bet365 is entitled to a NGR Shortfall Distribution, then bet365 shall receive the aggregate NGR Shortfall Distribution until bet365 has received an amount equal to the Unrecouped NGR Shortfall Distribution;

12.3.8eight, if a Capital Investment Catch-up exists, then bet365 shall receive the Capital Investment Catch-up Distribution until bet365 has received an amount equal to the Unrecouped Capital Investment Catch-up; and

12.3.9thereafter, the remaining amount shall be distributed 50% to bet365 and 50% to Empire (as applicable, such remaining amount, the “Profit Share”).

12.4Payment Method. To the extent a Party owes another Party any amounts pursuant to Sections 12.2 or 12.3, including as a result of a Party being in possession of Sportsbook Lounge GGR or Online Gaming Service GGR, such Party shall pay the other Party such owed amounts within 30 days of receipt of the Monthly Statement. All payments to Empire required under Section 12.2 or Section 12.3 shall be made by means of wire transfer in immediately available funds to an account as Empire may indicate in writing to pursuant to Section 18.9.

12.5Eligible Promotional Gaming Credits. To the extent NY State Law allows any Eligible Promotional Gaming Credits, the Parties agree such eligible bet365 Promotion Tax Deductions shall accrue towards the benefit of the Sportsbook Lounge and bet365 Gaming Service operations and therefore either increase Revenue or decrease Costs, such that the Operator is sharing such benefit with bet365 appropriately.

12.6Disputes. To the extent there is any dispute with respect to any Invoice, the Parties shall cause individuals within their finance departments to meet in good faith to attempt to resolve such dispute. If the Parties are unable to resolve such dispute, then either Party can exercise their rights under Section 12.7; provided, however, if there remains a dispute after exercising such rights, either Party can request, the cost and expense of which shall be deemed a Cost, an independent third party accountant to review the disputed Invoice and provide an opinion regarding the dispute in an attempt to resolve the issue.

12.7Right to Audit. Both Parties will keep and maintain accurate books of account and records at a business address in the USA covering all transactions relating to this Agreement. Each Party is entitled, at its sole cost and expense, to: (a) audit such books and records up to two (2) times each calendar year, upon at least fifteen (15) days prior written notice to the other Party pursuant

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

to Section 18.9, or at any time during a calendar year upon demand by any Gaming Authority, by sending an authorized representative, agent, attorney and/or accountant to the then current business address in the USA of the other Party where records are maintained; and (b) make or cause such authorized representative, agent, attorney or accountant to make copies and summaries of such books and records for use in auditing only (such books and records. and copies and summaries, will be deemed Confidential Information). Both Parties will retain and cause their Affiliates to retain) all such books of account and records for a minimum of seven (7) years following the calendar year to which they relate. If Empire discovers that bet365 over charged for Costs for any period or failed to accurately report Revenue under audit or bet365 discovers that Empire over charged for Costs for any period or failed to accurately report Revenue under audit (an “Audit Deficiency”), bet365 or Empire, as applicable, will promptly pay such Audit Deficiency to the other Party as may be necessary to comply with the distribution of Revenues in accordance with Section 12.3. If such Audit Deficiency is more than 5%, (i) the audited Party shall reimburse the auditing Party for all reasonable costs and expenses of such audit, and (ii) notwithstanding part (a) above, such audit that discovered the Audit Deficiency shall not be counted against the two (2) audit limit per calendar year for such auditing Party.

ARTICLE 13OWNERSHIP

13.1Operator Marks.

13.1.1To the extent permitted by the License Agreement between RW Services PTE Ltd and Montreign, dated as of March 31, 2017 (as may be amended, modified, supplemented or restated from time to time, the “Empire License Agreement”) Empire hereby grants (or shall cause the applicable member of the Empire Group to grant) to bet365 and its Affiliates a worldwide, revocable, royalty-free, non-sublicensable, non-exclusive and non-transferable license to reproduce, display, and use intellectual property owned by or licensed to Empire (the “Empire IP”) including, without limitation, the Empire Brands and Empire-provided artwork, materials and other content provided by Empire to bet365 under this Agreement solely in connection with (a) as required by this Agreement in order to offer the bet365 Online Sportsbook, the bet365 Casino/Table Games or bet365 Poker; (b) bet365’s obligations associated with Co-Branding and Section 3.4.2, if applicable, (c) bet365’s obligations with respect to customization, operation and maintenance of the Empire Branded Online Sportsbook and the offering of the Empire Branded Online Sportsbook in accordance with the provisions of this Agreement, if applicable, and (d) bet365’s rights and obligations under Section 14.5 and otherwise marketing and advertising the Sportsbook Lounge and bet365 Gaming Service.

13.1.2bet365 shall:

(a)with respect to the Empire IP, comply with the reasonable style guides, guidelines and/or policies, including any compliance items disclosed by Empire to bet365 in order to ensure compliance with the Empire License Agreement, that are provided by Empire in writing from time to time to bet365, reasonably in advance;

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

(b)acknowledge and agree that Empire (or the applicable member of Empire Group) is the owner or licensee of the Empire Brands and any additional intellectual property rights subsisting therein and that all goodwill arising from the use of the Empire Brands shall inure and is hereby assigned to Empire (or any of its Affiliates);

(c)not use the Empire Brands in a manner that is likely to prejudice any legal protection or validity of the Empire Brands, nor will it challenge Empire’s ownership of the Empire Brands or use the Empire Brands other than as expressly permitted under this Agreement;

(d)not use any name or mark, other than those included in the Empire Brands as permitted hereunder, which is identical to or confusingly similar to any name or mark included in the Empire Brands; and

(e)not make any application for a trade mark or a domain name for the Empire Brands or any colorable imitation thereof or that is confusingly similar thereto.

(f)Empire will be the registrant of, and to the extent permitted by Law, own all right, title and interest in and to any Empire Domain Names. bet365 shall not acquire any rights in the foregoing except as expressly granted under this Agreement and Empire expressly reserves all rights not so expressly granted.

13.1.3The Empire Group agrees not to use any Empire Brand for an Online Sportsbook within NY other than as contemplated by this Agreement.

13.2bet365 Marks.

13.2.1bet365 hereby grants (or shall cause the applicable Affiliate of bet365 to grant) to Empire a worldwide, royalty-free, non-sublicensable, non-exclusive and non-transferable license to reproduce, display, and use intellectual property owned by bet365 (the “bet365 IP”) including, without limitation, the bet365 Brands and bet365-provided artwork, New Content, Derivative Content, materials and other content provided by bet365 to Empire under this Agreement solely in connection with (a) Empire’s rights and obligations under Section 14.5 and otherwise marketing and advertising the Sportsbook Lounge and bet365 Gaming Service.

13.2.2Empire shall:

(a)with respect to the bet365 IP, comply with the reasonable style guides, guidelines and/or policies that are provided by bet365 in writing from time to time to Empire, reasonably in advance;

(b)acknowledge and agree that bet365 (or the applicable Affiliate of bet365) is the owner of the bet365 Brands and any additional intellectual property rights subsisting therein and that all goodwill arising from the use of the bet365 Brands shall inure and is hereby assigned to bet365 (or any of its Affiliates);

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

(c)not use the bet365 Brands in a manner that is likely to prejudice any legal protection or validity of the bet365 Brands, nor will it challenge bet365’s ownership of the bet365 Brands or use the bet365 Brands other than as expressly permitted under this Agreement;

(d)not use any name or mark, other than those included in the bet365 Brands as permitted hereunder, which is identical to or confusingly similar to any name or mark included in the bet365 Brands; and

(e)not make any application for a trade mark or a domain name for the bet365 Brands or any colorable imitation thereof or that is confusingly similar thereto.

(f)bet365 will be the registrant of, and to the extent permitted by Law, own all right, title and interest in and to any bet365 Domain Names. No member of the Empire Group shall acquire any rights in the foregoing except as expressly granted under this Agreement and bet365 expressly reserves all rights not so expressly granted.

13.2.3bet365 agrees not to use any bet365 Brand for an Online Sportsbook within NY other than as contemplated by this Agreement.

13.3bet365 Ownership.

13.3.1bet365 owns all right, title and interest in and to, or has a valid license to use, the bet365’s Online Gaming Platform, bet365 Gaming Service and bet365 Equipment, and other than the rights expressly granted under this Agreement, the Operator has no rights in and to the above. The Parties agree that there shall be no implied licenses under this Agreement and that each Party expressly reserves all rights not expressly granted to the other Party hereunder.

13.3.2bet365, at its sole cost and expense, may create, or may cause to be created, artwork or other creative content in original form (“New Content”) or content derived from existing content, including the bet365 Brands themselves and content derived from the display of the bet365 Brands (“Derivative Content”) for use in the bet365 Gaming Service. bet365 will own all right, title and interest in and to any New Content, any Derivative Content and any other content and material it contributes or develops for the bet365 Gaming Service. bet365 agrees that except as permitted in connection with Co-Branding or an Empire Branded Online Sportsbook, no New Content and no Derivative Content shall include any Empire IP, any colorable imitation thereof, or any mark, branding or other stylization that would be confusingly similar to the Empire IP. The Operator shall not acquire any rights in the foregoing except as expressly granted under this Agreement and bet365 expressly reserves all rights not so expressly granted.

13.3.3Except as expressly granted under this Agreement, no member of the Empire Group may reverse-engineer, decompile or disassemble the bet365’s Online Gaming Platform (or a part thereof) or any other intellectual property provided by bet365 under this Agreement. No member of the Empire Group may reproduce, display, perform, distribute, sell, modify or create derivative works based upon the bet365’s Online Gaming Platform (or a part thereof) or the bet365 Gaming Service. No member of the Empire Group may (a) permit any Persons to use the bet365’s Online Gaming Platform (or a part thereof) or bet365 Gaming Service except

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IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

as expressly stated hereunder or as otherwise agreed by the Parties in writing or (b) use the bet365’s Online Gaming Platform or bet365 Gaming Service in the operation of a service bureau.

13.4Customer Data.

13.4.1Each Party shall, to the extent permitted by applicable Law, own all information related to the bet365 Players and the members of the Empire Players Club, including personally identifiable information and rights thereto (“Customer Data”) and each Party shall provide the other Party with such Customer Data promptly upon its acquisition; provided, that during the Term the Parties shall only use, and cause their Affiliates to only use, the Customer Data in connection with (i) the promotion and marketing of the Catskills Casino, (ii) the operation, administration and promotion of the Sportsbook Lounge, the bet365 Gaming Service or the Empire Branded Online Sportsbook and (iii) their respective obligations hereunder. As soon as reasonably practicable following the Effective Date, Empire shall, and shall cause its Affiliates, to modify and maintain terms and conditions and privacy policies applicable to the members of the Empire Player Club in order for it to comply with this Section 13.4.1 and provide bet365 joint ownership of Customer Data. To the extent that pursuant to the NY Gaming Law or any other applicable Law, the Parties cannot jointly own the Customer Data, then the Party or its Affiliate that is the owner of the Customer Data pursuant to the NY Gaming Law (the “Owning Party”) shall confer any and all current and future rights such Owning Party has in the Customer Data to the other Party (the “Non-Owning Party”) as a perpetual, worldwide, non-exclusive, royalty-free, and transferable license, subject to the restriction that during the Term the Customer Data shall only be used in connection with (i) the promotion and marketing of the Catskills Casino, (ii) the operation, administration and promotion of the Sportsbook Lounge, the bet365 Gaming Service or the Empire Branded Online Sportsbook and (iii) their respective obligations hereunder. The Parties shall provide to the Operator any and all Customer Data that the Operator is required to maintain under applicable Gaming Laws; provided that nothing contained in this Section 13.4 shall limit the Parties from exploiting the Customer Data in any way as permitted by this Section 13.4 as long as such exploitation is permitted by applicable Law. Each Transaction Party shall use the Customer Data only as permitted under this Section 13.4 and shall (1) use good industry practices and protect it in compliance with all applicable Laws and (2) promptly notify the other Transaction Party of any unauthorized access to, or disclosure or use of Customer Data (a “Data Breach”) and assist the other Transaction Party in taking any remedial action reasonably requested in connection therewith.

13.4.2Subject to applicable Laws, bet365 shall be entitled to create, implement and amend the terms of use and privacy policies for the bet365 Gaming Service, which terms of use and privacy policies shall be subject to the prior written notice and approval of Empire, such approval not to be unreasonably withheld. Such use and privacy policy shall provide, as required by applicable Law, for assignment, transfer, or otherwise permission for the Parties to use Customer Data consistent with Section 13.4 and any other provisions of this Agreement and, if requested by a Transaction Party to comply with applicable Law, such privacy policy shall make disclosures or obtain consent to assign, transfer, or otherwise permit the Parties to use the Data.

13.4.3Each Transaction Party shall promptly investigate each Data Breach that it becomes aware of or has reason to suspect may have occurred and, in the case of an actual Data

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

Breach, shall reasonably cooperate with the other Transaction Party in connection with any independent investigation that the other Transaction Party may conduct with respect to such Data Breach. Each Transaction Party shall reasonably cooperate with the other Transaction Party in identifying any reasonable steps that should be implemented to limit, stop or otherwise remedy any actual or suspected Data Breach.

ARTICLE 14
ADDITIONAL COVENANTS

14.1Obligation of Confidentiality and Non-Use.

14.1.1Each Transaction Party receiving Confidential Information (in such capacity, “Recipient”) acknowledges and agrees that a duty is owed to the other Transaction Party disclosing Confidential Information (in such capacity, “Disclosing Party”) to maintain the confidentiality of Confidential Information (as hereafter defined) provided by the Disclosing Party hereunder. Subject to Section 14.1.3, Recipient shall take all reasonable steps to prevent disclosure or dissemination of the Disclosing Party’s Confidential Information to any Person or entity other than those employees, directors, officers, affiliates, managers, partners, members, stockholders, agents, advisors or representatives of Recipient (the “Representatives”) who have a need to know it in order to assist Recipient in performing its obligations or exercising its rights under this Agreement, and who have been made aware of and agreed to be bound by such confidentiality obligations. In addition, Recipient shall not, and shall cause its Representatives not to, use the Disclosing Party’s Confidential Information, or authorize others to use the Disclosing Party’s Confidential Information, for any purposes other than in connection with performing its obligations or exercising its rights hereunder. As used herein, “reasonable steps” means steps that a Transaction Party takes to protect its own, similarly confidential or proprietary information, which steps shall in no event be less than a reasonable standard of care. Subject to Section 14.4 below, this Section 14.1 shall survive the termination of this Agreement for a period of seven (7) years, except to the extent any Confidential Information constitutes a trade secret, in which case the confidentiality obligations contained herein shall continue in effect for so long as such trade secret remains a trade secret under applicable Law. For the avoidance of doubt, the confidentiality obligations under this Agreement constitute the entire agreement of the Transaction Parties with respect to the confidential treatment of Confidential Information and supersedes and preempts any prior understanding, agreements, or representations by and between the Transactions Parties, written or oral, that may have related to such subject matter.

14.1.2Definition of Confidential Information. “Confidential Information” means the terms of this Agreement and any information in any form emanating, directly or indirectly, from Disclosing Party, concerning or relating to Disclosing Party or the business operations of such entity, including proprietary technology and/or business plans, which information has been imparted to Recipient by Disclosing Party. “Confidential Information” shall include Customer Data, improvements, ideas, discoveries, inventions, prototypes, financial information, customer information, developments, methods, techniques, engineering, know-how, trade secrets, systems, documentation, drawings, renderings, sales and marketing plans, artwork, descriptions, component specifications, information of or relating to the project for which Recipient has received such

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

information, whether or not such project is susceptible to patent, copyright or any other form of protection and whether or not reduced to practice, technical or research information and software, including that in the development stage whether developed or being developed by Disclosing Party or third parties at the request of Disclosing Party,and all required disclosures to Gaming Authorities. All information disclosed by Disclosing Party shall be presumed to constitute Confidential Information and will be so regarded by the Recipient. “Confidential Information” does not include any information which (a) at the time of disclosure is generally known by the public or thereafter becomes public knowledge through no act or omission of or on behalf of the Recipient; (b) is disclosed to Recipient by third parties having a right to do so and who have not imposed upon the Recipient obligations of confidentiality in respect thereof; (c) is known to the Recipient, as can be demonstrated by the Recipient, prior to disclosure; or (d) is developed independently by the Recipient, as can be demonstrated by the Recipient, without reference to or reliance upon the Confidential Information.

14.1.3Certain Disclosures. Each Transaction Party agrees that it will not, without the prior written consent of the other Transaction Party, disclose the terms of this Agreement, except (a) as otherwise agreed to in writing by the Parties, or (b) to its Affiliates, officers, managers, members, general partners, employees, directors, agents, lender, advisors and contractors who (i) need to know such information in connection with the transactions contemplated by this Agreement, (ii) are instructed as to the confidential nature thereof and (iii) agree to be bound by the terms hereof. Notwithstanding anything herein to the contrary, either Transaction Party may disclose Confidential Information or the existence or termination of this Agreement and such information it reasonably deems necessary or advisable (1) to any Gaming Authority or pursuant to a NY Gaming Law, or (2) for purposes of its and its Affiliates’ compliance with any Laws (other than Gaming Laws, which is addressed in clause (1) above) to which it is subject, including any securities Laws. Such Transaction Party agrees to promptly notify the other Transaction Party of the existence, terms and circumstances surrounding such disclosure unless prohibited by Law and shall exercise its reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such information, and if such order or assurance is not obtained, the Transaction Party shall be permitted to disclose only such portion of the other Transaction Party’s non-public proprietary information that it is advised by opinion of counsel is required to be disclosed. Notwithstanding anything to the contrary contained herein, there shall be no restriction to the disclosure of any information that the Parties have mutually agreed to previously publicly disclose.

14.1.4Securities Compliance. Recipient hereby acknowledges that it is aware and that it will advise its Representatives that the federal and state securities Laws may prohibit any Person who has material, non-public information about a company from purchasing or selling securities of such company (including entering into hedge transactions involving such securities) or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities. Recipient acknowledges that Recipient may have access to material non-public information concerning the Disclosing Party. Accordingly, Recipient will not, and Recipient will take commercially reasonable steps necessary to ensure that its Representatives (and any Person acting on behalf of or in concert with Recipient or its Representatives) will not, trade in the securities of the Disclosing Party (including any securities convertible into such securities, or any other right to acquire such securities)

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

on the basis of, or if and while Recipient or its Representatives are in possession of, material non-public information regarding the Disclosing Party until such time as Disclosing Party has publicly disclosed such information. For the avoidance of doubt, however, neither Recipient nor its Representatives shall be prohibited from trading in securities in compliance with applicable securities Laws.

14.2Public Statements.

14.2.1Except with the prior written consent of the other Transaction Party, which may be withheld in its sole judgment except if requested by the other Transaction Party in order for it or its Affiliates to comply with any securities Law, each Transaction Party acknowledges that it shall not advertise, publish or otherwise disclose in any press release or other form of distribution: (i) its association with the other Transaction Party; or (ii) any aspects of this Agreement.

14.2.2Notwithstanding anything to the contrary herein, nothing in this Section 14.2 shall restrict in any respect the ability of a Transaction Party or any of its Affiliates to communicate with, make any statements to, or fully disclose any information to any Gaming Authority other than unsolicited remarks by Transaction Party or its Affiliates to a Gaming Authority (it being agreed and acknowledged that remarks made pursuant to a duty or other obligation to report to a Gaming Authority shall not be deemed “unsolicited” for purposes of this Section 14.2.2, which remarks are made in bad faith with the intent of circumventing the intent of this Agreement.

14.2.3This Section 14.2 shall survive the termination of this Agreement for any reason for a period of 5 years.

14.3Change of Control Transactions. Empire shall ensure that, in the event of a Change of Control of the Operator that results in a member of the Empire Group no longer holding the Operating License, this Agreement will be assigned or assumed by such Third Party purchaser. Further, if there is any change within the Empire Group with respect to who holds the Operating License, Empire shall cause that appropriate Affiliate to execute a joinder to this Agreement in accordance with Section 3.5. bet365 shall ensure that, in the event of a Change of Control of bet365 that results in bet365 no longer holding the applicable Gaming Approvals required to be held by it in accordance with this Agreement, this Agreement will be assigned or assumed by such Third Party purchaser.

14.4Non-Solicitation. During the Term and for a period of 12 months thereafter (the “Non-Solicitation Period”), neither Party shall directly or indirectly solicit any employee of the other Party that was employed by such other Party during the Non-Solicitation Period; provided, that, a Party may solicit for purposes of employment any Persons through general advertising or other general solicitation not targeted to employees of the other Party, and any offers of employment to, or hiring of, such Persons resulting from such a solicitation shall be permitted hereunder. This Section 14.4 shall survive the termination of this Agreement for any reason.

14.5Marketing; Cross-Promotion.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

14.5.1Empire shall (a) market and advertise the Sportsbook Lounge and the bet365 Gaming Service at the Catskills Casino and any Empire-controlled social media services relating to the Catskills Casino and (b) include a permanent link on rwcatskills.com website, the Catskills Casino website and mobile application to the bet365 Gaming Service. In addition, Empire shall, from time to time, as reasonably instructed by bet365 and consistent with Empire’s reasonable marketing practices, but in no event less frequently than one time per month, send e-mailers or other advertisements to Empire’s database on behalf of bet365 for the purpose of marketing the Sportsbook Lounge or the bet365 Gaming Service. Except as set forth in this Section 14.5.1, Empire shall not market or promote the bet365 Gaming Service without bet365’s consent; provided Empire can, at its sole cost and expense, market and promote the Empire Branded Gaming Service and such amounts shall not be considered a Cost.

14.5.2bet365 shall promote the Sportsbook Lounge and Catskills Casino through the bet365 Gaming Service in a manner agreed to be the Parties, which may include (a) each week, a promotion on the bet365 Gaming Service offering bet365 Players an incentive to visit the Catskills Casino subject to Empire providing bet365 with inventory such as hotel stay packages, Rewards Play, Crystal Life Spa treatments and RW Epicentre event tickets, and (b) each month within any scheduled e-mail communication to bet365 Players, advertisement of the Catskills Casino. Any advertisement of the bet365 Gaming Service shall, if feasible, practicable and commercially appropriate, include the Sportsbook Lounge and the Empire Brand (or reference to the Catskill Casino) to the extent such marketing or advertising is solely directed to residents of NY, as reasonably determined by bet365. The Transaction Parties agree all marketing or advertising that is not solely directed to residents of NY (or reasonably likely to include Persons outside of NY) shall only include the bet365 Brand.

14.5.3Empire shall use commercially reasonable efforts to cause the Resorts World Casino New York (“Resorts World Casino New York”) to:

(a)provide marketing support for the bet365 Gaming Service the same or similar to that provided by Empire under Section 14.8.1;

(b)in the event that the NY Gaming Law permits Players to register or manage their transactions with respect to a bet365 Gaming Service at Resorts World Casino New York, if requested by bet365, provide such registration and account management facilities within the Resorts World Casino New York (the “Registration Facilities”). The Parties shall collaborate and agree upon the method and manner of integration of the Registration Facilities with the bet365 Gaming Service. All expenses associated with the Registration Facilities shall be deemed a Cost; and

(c)in the event the NY Gaming Law permits Players to place wagers via terminal located with the Resorts World Casino New York, to provide such terminals in a manner mutually agreed to by the Parties (the “Gaming Terminals”). The Parties shall collaborate and agree upon the method and manner of integration of the Gaming Terminals with the bet365 Gaming Service. All expenses associated with the Gaming Terminals shall be deemed a Cost.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

(d)The Parties acknowledge and agree that Resorts World Casino New York is a separate legal entity from Empire and that it shall be remunerated for its obligations under this Section 14.8. The Parties agree to seek an exclusive agreement with Resorts World Casino New York and any costs related to such agreement shall be counted as Costs. Any transaction entered into with Resorts World Casino New York regarding the Sportsbook Lounge or bet365 Gaming Service, including as contemplated by this Section 14.8.3, shall require the consent of the Committee and a copy thereof shall be provided to each Party.

ARTICLE 15REPRESENTATIONS AND WARRANTIES

15.1Representations and Warranties of bet365. In order to induce Empire to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, bet365 hereby represents and warrants as of the date hereof to Empire as follows:

15.1.1Organization. bet365 is a limited liability company duly organized and validly existing under the Laws of Delaware.

15.1.2Authority and Validity. bet365 has the requisite power and authority to execute, deliver and perform its obligations under this Agreement. The execution and delivery by bet365 of, and the performance by bet365 of its obligations under this Agreement have been duly authorized by the requisite company, corporate, or other such organizational action on its part, including if necessary approval of the board of directors of bet365. This Agreement is the valid and binding obligation of bet365, enforceable against bet365 in accordance with its terms, except insofar as enforceability may be affected by Bankruptcy Laws, applicable Gaming Laws or by principles governing the availability of equitable remedies.

15.1.3Non-Contravention. The execution, delivery and performance by bet365 of this Agreement does not and will not (a) conflict with or violate any provision of bet365’s organizational documents, (b) result in any violation of or breach or default under or loss of rights under any contract or agreement to which bet365 is a party or by which it are bound, (c) violate any Law to which bet365 is subject, or (d) violate, conflict with or result in a default, right to accelerate or loss of rights under any order, judgment or decree to which bet365 is a party or by which it is bound or affected.

15.1.4No Consents. Except with respect to any applicable Gaming Approval, no material approval of, notice to, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to bet365 in connection with the execution, delivery and performance of this Agreement.

15.1.5No Litigation. Except as disclosed in writing to Empire on or before the execution of this Agreement, there is no pending or, to bet365’s actual knowledge, threatened Claims, lawsuits, governmental actions or other proceedings against bet365 or its assets before any court, agency or other judicial, administrative or other governmental body or arbitrator which could reasonably be expected to have a material adverse effect on the bet365 Gaming Service.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

15.2Representations and Warranties of Empire. In order to induce bet365 to enter into and perform its obligations under this Agreement and to consummate the transactions contemplated hereby, Empire hereby represents and warrants as of the date hereof to bet365 as follows:

15.2.1Organization. Empire is a corporation, duly organized and validly existing under the Laws of the State of Delaware.

15.2.2Authority and Validity. Empire has the requisite power and authority to execute, deliver and perform its obligations under this Agreement. The execution and delivery by Empire of, and the performance by Empire of its obligations under this Agreement have been duly authorized by the requisite action on its part, including, if necessary, approval of its board of directors. This Agreement is the valid and binding obligation of Empire, enforceable against Empire in accordance with its terms, except insofar as enforceability may be affected by Bankruptcy Laws, applicable Gaming Laws or by principles governing the availability of equitable remedies.

15.2.3Non-Contravention. The execution, delivery and performance by Empire of this Agreement and the Stock Purchase Agreement does not and will not (a) conflict with or violate any provision of any organizational documents of Empire or any controlled Affiliate, (b) result in any violation of or breach or default under or loss of rights under any contract or agreement to which Empire or any controlled Affiliate is a party or by which it is bound, (c) violate any Law to which Empire or any controlled Affiliate is subject, or (d) violate, conflict with or result in a default, right to accelerate or loss of rights under any order, judgment or decree to which Empire or any controlled Affiliate is a party or by which it is bound or affected.

15.2.4No Consents. Except with respect to any applicable Gaming Approval, no material approval of, notice to, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to Empire in connection with the execution, delivery and performance of this Agreement.

15.2.5No Litigation. Except as disclosed in writing to bet365 on or before the execution of this Agreement, there is no pending or, to Empire’s actual knowledge, threatened Claims, lawsuits, governmental actions or other proceedings against Empire or its assets before any court, agency or other judicial, administrative or other governmental body or arbitrator which could reasonably be expected to have a material adverse effect on the bet365 Gaming Service.

ARTICLE 16TERM AND TERMINATION

16.1Term. This Agreement comes into force on the Effective Date and subject to earlier termination pursuant to Section 16.2 or mutual written agreement of the Parties, shall continue in force until the earlier of (i) the 20th anniversary of the Go-Live Date and (ii) the termination of Empire’s Gaming Facility License Award (the “Initial Term”). Upon expiration of the Initial Term, this Agreement shall be automatically extended for successive five (5) year periods (each, a “Renewal Term”) unless a Party provides at least 12 months’ written notice to the other Party of its election not to renew this Agreement prior to the end of the Initial Term or any Renewal Term.

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

16.2Termination.

16.2.1Either Party can terminate this entire Agreement upon written notice to the other Party:

(a)if a NY Gaming Law authorizing Online Sportsbooks has not been enacted in NY prior to [***], provided that notice of termination pursuant to this Section 16.2.1(a) is delivered prior to [***]; provided, however, if the process for enactment of a NY Gaming Law is an amendment to the Constitution of NY, such date shall be extended to [***], provided that notice of termination pursuant to this Section 16.2.1(a) is delivered prior to [***];

(b)subject to the notice and cure requirements of Section 16.5, upon a material breach of this Agreement by the other Party;

(c)in the event the other Party is an Unsuitable Person, provided, such terminating Party has utilized commercially reasonable efforts to cooperate with the other Party in an attempt to remedy the issue or issues causing such Party to be an Unsuitable Person, which commercially reasonable efforts shall include providing a 30 day advance notice of termination and an ability to discuss such determination with the terminating Party; provided that in the event that the use of such commercially reasonable efforts would, in the reasonable opinion of such Party, be detrimental to the Party that has determined that the other Party is an Unsuitable Person, such Party may terminate this Agreement in accordance with this Section 16.2.1(c) without taking such efforts;

(d)in the event the other Party is Bankrupt;

(e)any Gaming Authority in NY disapproves of this Agreement, and the Parties, acting together in good faith, are not able, without materially detrimentally frustrating the commercial intent of this Agreement, to amend the Agreement so that the applicable Gaming Authority no longer disapproves of this Agreement;

(f)if a Law is enacted that prohibits offering or conducting an Online Sportsbook in NY, includingthe NY Gaming Law as it relates to Online Sportsbooks sun setting without renewal; and

(g)if a Federal Online Gaming Law preempts the NY Gaming Law(s) such that operation of an Online Sportsbook through a state license is no longer required.

16.2.2bet365 can terminate this Agreement upon written notice to Empire upon a Change of Control of Empire or the Operator to a Highly Competitive Business.

16.2.3Empire can terminate this Agreement upon written notice to bet365 upon a Change of Control of bet365 to a Highly Competitive Business.

16.2.4bet365 can terminate this Agreement upon written notice to Empire pursuant to Section 7.2.2 provided that following such termination, during a period of eighteen (18)

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

months following such termination, neither bet365 nor any of its Affiliates may, directly or indirectly, offer Online Gaming Services in NY.

16.3Survival. Upon termination of this entire Agreement all rights and obligations of the Parties under this Agreement shall terminate, other than this Section 16.3, Section 8.3.4, Article 13, Article 14 (other than Sections 14.3 and 14.5), Article 16, Article 18, or otherwise specifically set forth herein, provided that all amounts owed to a Party for the period prior to such termination are paid to such Party as contemplated herein.

16.4Exclusive Remedy. Notwithstanding anything herein to the contrary, other than in connection with a termination of this Agreement pursuant to Sections 16.2.1(b) or 16.2.1(d)and except as otherwise expressly provided herein, no Transaction Party may seek damages upon exercising its rights to termination of this Agreement pursuant to this Article 16. Except as limited by Section 18.16, the right of termination as a result of Sections 16.2.1(b) or 16.2.1(d) does not prejudice or limit the rights of the aggrieved Transaction Party to claim damages it may have suffered as a result thereof.

16.5Cure Rights. No Transaction Party shall be entitled to recover damages or terminate this Agreement pursuant to Section 16.2 by reason of any breach by another Transaction Party of its obligations hereunder, unless the breaching Transaction Party fails to remedy such breach within (a) 10 days following receipt of the non-breaching Transaction Party’s notice thereof with respect to any breaches of a monetary obligation, and (b) 180 days following receipt of the non-breaching Transaction Party’s notice thereof with respect to any other breaches (or, with respect to clause (b), if such cure cannot reasonably be accomplished within such 180-day period, the breaching Transaction Party shall not in good faith have commenced such cure within such 180-day period and shall not thereafter proceed diligently to completion, but in no event for a period greater than 240 days). The foregoing cure period will not apply to any representations or warranties hereunder, to breaches incapable of being cured, fraud or willful misconduct, or to an application for injunctive relief. Chronic and repetitive breaches of the same kind and character shall not be curable. The non-breaching Transaction Party shall use commercially reasonable efforts during any cure period to mitigate damages and assist the breaching Transaction Party in curing such breach.

16.6Limitation. The Transaction Parties acknowledge that any dispute arising under this Agreement will be limited to the Persons that are parties to this Agreement and, except to the extent reasonably necessary in connection with an action to seek injunctive relief resulting from actions by such Person that result in a breach of this Agreement, no Transaction Party shall (a) commence any lawsuit, arbitration or otherwise seek to impose any liability whatsoever against any Person in its capacity as an officer, director, shareholder, member, employee or agent of a Transaction Party or (b) permit any Person claiming through such Party to assert a claim or impose any liability against any Person in its capacity as an officer, director, shareholder, member, employee or agent of a Transaction Party as to any matter or thing arising out of or relating to this Agreement or any alleged breach or default by Transaction Party hereto or thereto.

16.7Specific Performance. If any Transaction Party defaults on any provision in this Agreement, the other non-defaulting Transaction Party, at its option, either may (a) in accordance with Section 16.2.1(b) terminate this Agreement and pursue its actual damages or (b) pursue and

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

obtain specific performance of such defaulting Transaction Party’s obligations hereunder (without the necessity of proving irreparable harm or posting a bond or other security).

16.8Offset. To the extent a notice of a material breach of this Agreement by one Party to the other Party (the “Breaching Party”) is delivered at any time after termination of the Guaranty Side Letter, then, an amount equal to the next $[***] of the Profit Share such Breaching Party is entitled to under Section 12.3.9, shall be held (including taking into account the last sentence of this Section 16.8) by such Breaching Party and not distributed to its holders of Equity Securities or otherwise used by the Breaching Party for any business purpose until such breach is cured. Further, if the non-breaching Party owes the Breaching Party any Profit Share amount pursuant to Section 12.4, it can withhold delivering such amount until the earlier of (a) it has withheld $[***] under this Section 16.8 or (b) the Breaching Party has cured such material breach.

ARTICLE 17INDEMNIFICATION

17.1Indemnification of bet365. Subject to Section 18.16, Empire and the Operator, on a joint and several basis, hereby agree to indemnify and hold harmless, to the fullest extent permitted by Law, bet365 and its Affiliates and their respective officers, directors, shareholders, members, managers, employees and agents, from, against and in respect of any and all liabilities, judgments, injunctions, charges, orders, decrees, rulings, damages, dues, assessments, losses, fines (other than Gaming Fines included in the definition of Costs), penalties, injuries, deficiencies, demands, fees, costs, amounts paid in settlement or indemnification (including reasonable and documented attorneys’ and expert witness fees, costs and disbursements in connection with investigating, defending or settling any Action or threatened Action), and other expenses (collectively, “Claims”), in any instance arising out of any Action brought by a Third Party, including any regulatory enforcement action, or notice of violation from a Governmental Entity, including a Gaming Authority, related to or arising or resulting from (each, an “Empire Third-Party Claim”):

17.1.1any claim brought with respect to the operation of the Catskills Casino generally, including as related to any threat to, loss or impairment of life or personal injury to any patrons of the Catskills Casino as a result of foreign or domestic terrorism;

17.1.2any breach or default in performance by Empire or the Operator of any representation, warranty, covenant or obligation contained in this Agreement;

17.1.3any claim brought on the basis that the Empire IP that is incorporated in the Sportsbook Lounge or bet365 Gaming Service pursuant to the terms of this Agreement infringes the intellectual property rights of a Third Party;

17.1.4any violation of any Law by Empire or the Operator, including the NY Online Gaming Law or failure to remit any NY Gaming Taxes related to the Sportsbook Lounge or the bet365 Gaming Service payable by Empire or the Operator other than to the extent caused by any acts or omissions of bet365 or its Affiliates in violation of this Agreement;

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

17.1.5except to the extent caused by any acts or omissions of bet365 or its Affiliates in violation of this Agreement, bet365’s Gaming Approvals or the Operating License being suspended, revoked, cancelled, not renewed or terminated due to the act or omission of Empire, the Operator or their Affiliates; or

17.1.6any claim related to any Data Beach in which the Customer Data is accessed, used or disclosed in an unauthorized manner while controlled by and in the possession of Empire, the Operator or their Affiliates.

17.2Indemnification of Empire and the Operator. Subject to Section 18.16, bet365 hereby agrees to indemnify and hold harmless, to the fullest extent permitted by Law, Empire, the Operator and their Affiliates and their respective officers, directors, shareholders, members, managers, employees and agents from, against and in respect of any and all Claims, in any instance arising out of any Action brought by a Third Party, including any regulatory enforcement action, or notice of violation from a Governmental Entity, including a Gaming Authority, related to or arising or resulting from (each, a “bet365 Third-Party Claim”):

17.2.1any breach or default in performance by the Operator of any representation, warranty, covenant or agreement contained in this Agreement;

17.2.2any claim brought on the basis that the bet365 Brand or the bet365’s Online Gaming Platform or, following the Sportsbook Lounge Transition, the Sportsbook Lounge Betting Platform that is incorporated in the Sportsbook Lounge or the bet365 Gaming Service pursuant to the terms of this Agreement infringes the intellectual property rights of a Third Party;

17.2.3any violation of any Law by bet365, including the NY Online Gaming Law or, to the extent bet365 is obligated to remit such NY Gaming Tax directly to the applicable Governmental Authority, failure to remit any NY Gaming Taxes related to the Sportsbook Lounge or the bet365 Gaming Service payable by bet365 other than to the extent caused by any acts or omissions of Empire or its Affiliates in violation of this Agreement,;

17.2.4except to the extent caused by any acts or omissions of a member of the Empire Group in violation of this Agreement, Empire or the Operator’s Gaming Approvals or the Operating License being suspended, revoked, cancelled, not renewed or terminated due to the act or omission of bet365;

17.2.5any claim related to any Data Beach in which the Customer Data is accessed, used or disclosed in an unauthorized manner while controlled by and in the possession of bet365 or its Affiliates.

17.3Third Party Claims. If any Third Party shall notify the Party possessing a right to indemnification under this Article 17 (the “Indemnified Party”) with respect to any matter which may give rise to a Third-Party Claim, then the Indemnified Party shall promptly notify the other Party (the “Indemnifying Party”) in writing (the “Third Party Claim Notice”) describing the Third-Party Claim in reasonable detail. The timely delivery of such written notice by the Indemnified Party to the Indemnifying Party shall not relieve any liability on the part of the Indemnifying Party

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

under this Article 17 with respect to such Third-Party Claim except, and only to the extent, the Indemnifying Party suffers material prejudice by reason of such failure. The Indemnifying Party shall have the right, at its option, to assume the defense of any such Third-Party Claim with counsel approved by the Indemnified Party (which approval shall not be unreasonably withheld, conditioned or delayed); provided however, if the Indemnified Party reasonably and in good faith determines that an adverse outcome of a Third Party Claim may preclude or materially delay, impede, impair, threaten or jeopardize any Gaming Approval or such Indemnified Party’s Affiliates’ application for or ability to obtain or retain any Gaming Approval, such Indemnified Party shall have the right to defend such Third Party Claim pursuant to Section 17.3.7. If the Indemnifying Party elects in writing within 20 days of receipt of the Third-Party Claim to assume the defense of any such Third-Party Claim then:

17.3.1notwithstanding anything to the contrary contained in this Agreement, the Indemnifying Party shall not be required to pay or otherwise indemnify the Indemnified Party against any attorneys’ fees incurred on behalf of the Indemnified Party in connection with such Third Party Claim following the Indemnifying Party’s election to assume the defense of such Third Party Claim; provided, that the Indemnified Party may have counsel participate in the defense at the Indemnified Party’s own expense;

17.3.2the Indemnified Party shall make available to the Indemnifying Party all books, records, and other documents and materials that are under the direct or indirect control of the Indemnified Party or any of the Indemnified Party representatives and that the Indemnifying Party considers necessary or desirable for the defense of such Third Party Claim;

17.3.3the Indemnified Party shall execute such documents and take such other actions as the Indemnifying Party may reasonably request for the purpose of facilitating the defense of, or any settlement, compromise, or adjustment relating to, such Third Party Claim;

17.3.4the Indemnified Party shall otherwise fully cooperate, without additional consideration, as reasonably requested by the Indemnifying Party in the defense of such Third Party Claim;

17.3.5without the consent of the Indemnifying Party, the Indemnified Party shall not admit any liability with respect to such Third Party Claim; and

17.3.6the Indemnifying Party shall have the exclusive right to settle, adjust, or compromise such Third Party Claim, on such terms as it may deem appropriate, without the consent or approval of the Indemnified Party or any other Person; provided, that any settlement that does not include as an unconditional term a release by the claimant to the Indemnified Party from all liability in respect to such claim or that contains any ongoing requirement or restriction of the Indemnified Party, requires the written consent of the Indemnified Party, which consent shall not be unreasonably withheld.

17.3.7If the Indemnifying Party elects not to assume the defense of such Third Party Claim, then the Indemnified Party shall proceed diligently to defend such Third Party Claim with the assistance of counsel reasonably satisfactory to the Indemnifying Party; provided, however,

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Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

that the Indemnified Party shall not settle, adjust, or compromise such Third Party Claim, or admit any liability with respect to such Third Party Claim, without the prior written consent of the Indemnifying Party, which consent shall not be unreasonably withheld.

ARTICLE 18MISCELLANEOUS

18.1Independent Contractors. The Parties are acting as independent contractors. Nothing contained in this Agreement shall create or be construed as creating a partnership, joint venture or agency relationship. Neither Party shall have the authority to bind the other Party in any respect.

18.2No Third Party Beneficiaries. Except as specifically set forth herein, this Agreement shall not confer any rights or remedies upon any Person other than the Parties and their respective successors and permitted assigns.

18.3Succession and Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Except as contemplated by Section 3.5, no Party may assign this Agreement or any of its rights, interests or obligations hereunder or delegate its responsibilities or obligations without the prior written approval of the other Party, which may be withheld in its sole and absolute discretion; provided, (a) pursuant to Section 3.5, Empire shall be obligated to assign those rights and obligation in this Agreement to the Affiliate eligible to obtain the Operating License (i.e., the Operator), without the need for such prior written approval, provided, if such Affiliate is a Highly Competitive Business following a Change of Control of Empire or Operator, bet365 shall have a termination right pursuant to Section 16.2.2, or (b) subject to bet365’s termination right in Section 16.2.2 and Empire’s termination right in Section 16.2.3, this Agreement shall be assigned in connection with a Change of Control of bet365, Empire or the Operator; provided that in the case of any such assignment, such assignee, prior to the assignment, obtains all necessary Gaming Approvals to comply with its obligations under this Agreement.

18.4Governing Law. THE LAWS OF THE STATE OF NEW YORK, EXCLUSIVE OF ANY CONFLICTS OF LAW PRINCIPLES THAT COULD REQUIRE THE APPLICATION OF ANY OTHER LAW, SHALL GOVERN THIS AGREEMENT FOR ALL PURPOSES. EACH OF THE PARTIES HEREBY (A) SUBMITS TO THE JURISDICTION OF THE PERMITTED COURT FOR PURPOSES OF ENFORCING THIS AGREEMENT IN THE MANNER PROVIDED HEREIN, AND (B) WAIVES AND AGREES NOT TO ASSERT (BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE) IN ANY SUIT, ACTION, PROCEEDING OR DISPUTE PROPERLY BROUGHT OR MAINTAINED BEFORE THE PERMITTED COURT IN ACCORDANCE WITH THIS AGREEMENT, ANY CLAIM THAT (I) SUCH PARTY IS NOT SUBJECT PERSONALLY TO THE JURISDICTION OF THE PERMITTED COURT, (II) SUCH PARTY IS IMMUNE FROM EXTRATERRITORIAL INJUNCTIVE RELIEF, (III) SUCH SUIT, ACTION, PROCEEDING OR DISPUTE MAY NOT BE BROUGHT OR MAINTAINED IN THE PERMITTED COURT, OR SHOULD BE DISMISSED ON THE GROUNDS OF FORUM NON CONVENIENS, OR SHOULD BE TRANSFERRED TO ANY COURT OTHER THAN THE PERMITTED COURT, OR (IV) THAT THIS AGREEMENT OR THE SUBJECT MATTER HEREOF MAY NOT BE ENFORCED IN OR BY THE PERMITTED COURT.

41

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

18.5Waiver of Jury Trial. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY TO THIS AGREEMENT HEREBY WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND ACTION OR CAUSE OF ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER SOUNDING IN TORT OR CONTRACT OR OTHERWISE.

18.6Amendment and Waiver. No modification, amendment, or waiver of any provision of this Agreement will be effective unless such modification, amendment, or waiver is approved in writing by each Party. Any failure by either Party, at any time, to enforce or require the other Party’s compliance with any of the terms and conditions of this Agreement shall not constitute a waiver of such terms and conditions, nor limit the right of the non-defaulting Party to avail itself of any and all remedies it may have. The remedies provided for in this Agreement shall be cumulative with all other remedies at law or in equity. The Parties acknowledge that since the NY Gaming Law for Online Gaming Services (or the Gaming Regulations for Retail Sports Betting) has not yet been enacted, once such legislation or regulation is enacted, the Parties may be required to commence in good faith discussions to modify certain parts of this Agreement as necessary to ensure compliance with such legislation, provided that any changes shall result in substantially the same economic benefits and burdens between the Parties as originally contemplated by this Agreement.

18.7Entire Agreement. This Agreement and the Stock Purchase Agreement constitute the entire agreement of the Parties with respect to the subject matter herein and supersedes and preempts any prior understandings, agreements, or representations by or between the Parties, written or oral, that may have related to the subject matter of this Agreement in any way.

18.8Counterparts; Facsimile; Electronic and Digital Signatures. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, and all such counterparts together shall constitute one and the same instrument and may be sufficiently evidenced by one counterpart. Each Party may rely upon the facsimile signature of the other. In addition, at all times while the Agreement is in force, each Party expressly agrees to the use and acceptance of signatures by digital or other electronic means. In addition, each Party agrees (except with respect to documents required to be signed in the presence of a third party or documents having an additional qualifying requirement in addition to the signature) that the use of a message which represents the document and is transformed by a digital signature, constitutes a sufficient signing of record. Subject to the foregoing restrictions, each Party further agrees that a digital or other electronic signature will be accorded the full legal force and effect of a handwritten signature under the law governing the Agreement. Execution of this Agreement at different times and places by the Parties shall not affect the validity thereof.

18.9Notices. Unless otherwise specified in this Agreement, all notices, demands, elections, requests or other communications that any Party may desire or be required to give hereunder must be in writing and must be given (a) by hand delivery, (b) by a recognized overnight courier service providing confirmation of delivery overnight courier, or (c) by Portable Document

42

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

Format (PDF), to the addresses set forth below or at such other address as the Parties may specify by notice given to the other Parties in accordance with this Section 18.9. A notice sent by overnight courier shall be deemed given on the next Business Day after the day said notice is delivered to the overnight courier. A notice sent by hand delivery or by PDF shall be deemed given on the day sent (provided such PDF document is electronically confirmed received and is followed by delivery pursuant to (a) or (b) above).

If to Empire:

Empire Resorts, Inc.

c/o Monticello Casino and Raceway

204 State Route 17B, P.O. Box 5014

Monticello, NY 12701

Attention: Nanette L. Horner

E-mail: nhorner@emprireresorts.com

with copies to:

Sidley Austin LLP

1999 Avenue of the Stars

Los Angeles, CA 90067

Attention: Kenneth J. Baronsky

E-mail: kbaronsky@sidley.com

If to bet365:

bet365 House

Media Way

Stoke-on-Trent

Staffordshire

ST1 5SZ

England

Attn: Ash Averill, Legal Counsel, with a copy to Legal Notices

Email: ash.averill@bet365.com; legalnotices@bet365.com

With a copy to:

Brownstein Hyatt Farber Schreck, LLP

410 17th Street, Suite 2200

Denver, CO 80202

Attn: Elizabeth Dickson Paulsen

Email: epaulsen@bhfs.com

18.10Expenses. Except as otherwise expressly provided in this Agreement, each Party will bear its own costs and expenses incurred in connection with the preparation, execution and

43

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

performance of this Agreement, including all fees and expenses of agents, representatives, financial advisors, legal counsel and accountants.

18.11Joint Preparation of Agreement. The Parties and their respective counsel have participated jointly in the negotiation and drafting of this Agreement. Each of the Parties acknowledges that it is sophisticated in business matters of the type contemplated hereby and has been advised by experienced counsel and, to the extent it has deemed necessary, other advisers in connection with the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the Parties, and no presumption or burden of proof will arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement.

18.12Headings. Sections and other headings contained in this Agreement are for reference purposes only and are not intended to describe, interpret, define or limit the scope or extent of this Agreement or any provision hereof.

18.13Severability. Any portion of this Agreement that is determined by a court of competent jurisdiction to be invalid, illegal or incapable of being enforced by any rule of Law or public policy, all other terms, conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any Transaction Party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible to the fullest extent permitted by applicable Law and in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.

18.14Attorneys’ Fees. In the event of any breach or action to compel compliance with this Agreement, the prevailing Party shall be entitled to recover all costs and expenses, including its reasonable and documented attorneys’ fees.

18.15Further Assurances. In case any further action is necessary to carry out the purposes of this Agreement, each Party will take such further action (including the execution and delivery of further instruments and documents) as the other Party reasonably may request, all at the sole cost and expense of the requesting Party (unless the requesting Party is entitled to indemnification therefore under this Agreement).

18.16No Consequential Damages. Other than in connection with (a) fraud or willful misconduct, (b) breach of Section 3.1 or Section 3.2, the result of which is that bet365 is not given its right with respect to the Sportsbook Lounge Transition or operating the bet365 Gaming Service, or (c) breach of Article 13 or Section 14.3 and each Party’s obligations under Article 16, notwithstanding any other provision of this Agreement to the contrary, no Party shall be liable to any other Party for losses with respect to mental or emotional distress, exemplary, consequential, incidental, special damages, lost profits, diminution in value, damage to reputation or the like, including lost profits, even if such Party has been advised of the possibility of such damages.

44

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions denoted with “[***]”

18.17Interpretation. Each and every reference to share prices, shares of Common Stock, the Equity Stake or shares of the Equity Stake in this Agreement shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

18.18Guaranty. Contemporaneously with the execution of this Agreement, bet365 Group Limited (“Guarantor”) shall execute and deliver to Empire a side letter pursuant to which Guarantor shall guaranty, to the extent permitted by applicable Gaming Law, the payment obligations and indemnification obligations under Article 17 of bet365 under this Agreement (the “Guaranty Side Letter”). bet365 and Guarantor shall have the right to terminate the Guaranty Side Letter upon the 5^th anniversary on the date of which each Party starts receiving the Profit Share.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

EMPIRE RESORTS, INC. By: /s/ Ryan Eller__ Name: Ryan Eller Title: President and Chief Executive Officer HILLSIDE (NEW YORK) LLC By: /s/ Simon Betteley                                         Name: Simon Betteley Title: President

45

Schedule A

Defined Terms

The following terms shall have the following meanings for all purposes of this Agreement. Such meanings shall be equally applicable to both the singular and the plural forms of the terms herein defined.

“30-Day VWAP” means, for any Equity Securities, the volume weighted average price for such securities for the trailing thirty (30) Trading Days prior to the relevant date on the Nasdaq Capital Market (or, if the Nasdaq Capital Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) as reported by Bloomberg L.P (or its successor) or, if not available, by another authoritative source mutually agreed by the Parties from 9:30 a.m. New York time on the Trading Day that is thirty (30) Trading Days preceding such date to 4:00 p.m. New York time on the last Trading Date immediately preceding such date.

“Additional Skin” means, if pursuant to the NY Gaming Law, more than one Skin can utilize an Operating License, any Skin made available under such Operating License that is in addition to the Skin allocated to bet365 under this Agreement pursuant to Section 3.2.

“Action” means any action, arbitration, audit, claim, demand, proceeding, hearing, investigation, litigation or suit (whether civil, criminal, administrative, judicial or investigative, whether formal or informal, whether public or private) commenced, brought, conducted or heard by or before, or otherwise involving, any Governmental Entity or court or similar body or arbitrator.

“Acquisition Marketing” means the marketing and advertising of the bet365 Gaming Service to acquire, retain and maximize the lifetime value of Players, including all tactics, strategies, methodologies, activities, or systems employed for that purpose, which includes performance based user acquisition through affiliate arrangements, ad networks and social media platforms, mass media advertising, stadium perimeter board advertising and sponsorship.

“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such Person. For purposes of this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by reason of management authority, by the ability to appoint directors, by contract, or otherwise. For purposes of this Agreement, no Party shall be deemed an Affiliate of the other Party.

“Agreement” has the meaning set forth in the preamble of this Agreement.

“Approved Plan” means the annual plan regarding anticipated technological improvements and advances, new products and services for the bet365 Gaming Service, as updated, presented to and approved by the OC Members pursuant to Section 4.1.

“Audit Deficiency” has the meaning set forth in Section 12.6.

“Authorized bet365 Personnel” has the meaning set forth in Section 8.3.2.

“Bankrupt” or “Bankruptcy” means with respect to any Person, that

(i)    such Person (A) makes a general assignment for the benefit of creditors, (B) files a voluntary bankruptcy petition, (C) becomes the subject of an order for relief or is declared insolvent in any Governmental Entity bankruptcy or insolvency proceedings, (D) files a petition or answer seeking a reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any Law, (E) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against such Person in a proceeding of the type described in subclauses (A) through (D) of this clause (i), or (F) seeks, consents to, or acquiesces in the appointment of a trustee, receiver, or liquidator of such Person or of all or any substantial part of such Person’s properties, or

(ii)    a proceeding seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any Law has been commenced against such Person and 120 days have expired without dismissal thereof or with respect to which, without such Person’s consent or acquiescence, a trustee, receiver, or liquidator of such Person or of all or any substantial part of such Person’s properties has been appointed and 90 days have expired without the appointment having been vacated or stayed, or 90 days have expired after the date of expiration of a stay, if the appointment has not previously been vacated.

“Bankruptcy Laws” means any applicable bankruptcy, insolvency, reorganization, moratorium or similar Laws affecting creditors’ rights generally.

“bet365” has the meaning set forth in the preamble of this Agreement.

“bet365 Brand” means the “bet365” Brand or such other Brand that bet365 or its controlled Affiliates own or have the right to use that has national recognition.

“bet365 Domain Names” has the meaning set forth in Section 5.3.

“bet365 Equipment” means any physical assets that the bet365 or its Affiliates directly or indirectly acquires, installs or maintains from time to time in order to offer the bet365 Sportsbook Lounge Services or the bet365 Gaming Service, including any equipment of any Third Party provider of content or services thereto.

“bet365 Equity Holder” has the meaning set forth in Section 2.1.

“bet365 Gaming Service” means the bet365 Online Sportsbook and, if applicable, the bet365 Online Casino/Table Games, bet365 Online Poker and Empire Branded Online Sportsbook, which may include Online Casino/Table Games and Online Poker integrated into bet365’s Online Gaming Platform as contemplated by this Agreement.

“bet365 IP” has the meaning set forth in Section 13.2.1.

“bet365 OC Member” has the meaning set forth in Section 5.2.1.

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“bet365 Obligations” means individually, or collectively, as applicable, the bet365 Sportsbook Lounge Services or bet365 Online Obligations.

“bet365 Online Casino/Table Games” means the Online Casino/Table Games offered by bet365 in accordance with Section 3.4 of this Agreement

“bet365 Online Obligations” has the meaning set forth in Section 5.2.1.

“bet365 Online Poker” means Online Poker offered by bet365 in accordance with Section 3.4 of this Agreement.

“bet365 Online Sportsbook” means the Online Sportsbook offered by bet365 in accordance with Section 3.2 of this Agreement.

“bet365 Operational Costs” means, subject to Section 12.2.4, all incremental out of pocket costs incurred by bet365 or its Affiliates in connection with the bet365 Obligations, including (a) compensation on a time (at Rate Card Rate) basis for all employees (including temporary and permanent employees) of bet365 or its Affiliates that dedicate time to providing the bet365 Obligations (excluding executive officers of bet365), including customer support, operations, Acquisition Marketing, trading and risk management, developers, back-office services (i.e., legal, accounting, compliance) (all such costs, “bet365 Labor Costs”), (b) the rent and utilities of utilized office space of where such employees provide such services, (c) costs incurred in connection with the technology and information technology owned or developed by bet365 or its Affiliates, (d) Player Incentives in connection with the bet365 Gaming Service, (e) promotional losses (i.e., payouts that are not funded by Player contributions) associated with the bet365 Gaming Service, (f) Player-Related Costs; (g) any marketing costs incurred in connection with Section 14.8.2 and any Acquisition Marketing (collectively, “bets365 Marketing Costs”); (h) fees or royalties paid to any sports league, whether required by Law or otherwise; (vi) with respect to a Vendor, as contemplated by Article 11, (i) Third Party Content Costs; and (j) any amounts set forth in this Agreement as Costs to be paid by bet365 or its Affiliates (i.e., provisioning for backup and disaster recovery and working capital). Notwithstanding the foregoing, in no event shall costs associated with generally updating or upgrading bet365’s Online Gaming Platform be included unless made to comply with the NY Gaming Law or Laws in the USA.

“bet365 Labor Costs” has the meaning set forth in the definition of bet365 Operational Costs.

“bet365 Marketing Costs” has the meaning set forth in the definition of bet365 Operational Costs.

“bet365 Player” means a Person who has entered into standard terms of use agreement as required by this Agreement to play or engage in a bet365 Gaming Service.

“bet365 Promotional Tax Deduction Sharing Ratio” means for any period, a percentage determined by dividing: (i) Eligible Promotional Gaming Credits wagered by in the Sportsbook Lounge or on the bet365 Gaming Service during such period; by (ii) the sum of the promotional

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gaming credits wagered during such period by (a) in the Sportsbook Lounge or on the bet365 Gaming Service, (b) in any Additional Skin offered under the Operating License (other than the Empire Branded Online Sportsbook), and (c) by the Operator with respect to its casino, hotel and resort operations and with respect to its Online Gaming Services.

“bet365 Promotional Tax Deductions” means for any period, an amount equal to the total reduction in Gaming Tax liability actually realized by the Operator for such period as a result of Eligible Promotional Gaming Credits issued through any of its operations, including its land-based casino operations and any (including its own or another branded offering) Online Gaming Service utilizing its Operating License for such period multiplied by the bet365 Promotional Tax Deduction Sharing Ratio.

“bet 365 Sportsbook Lounge Services” has the meaning set forth in Section 5.1.

“bet365 Third-Party Claim” has the meaning set forth in Section 17.2.

“Brands” means any trademark, service marks, names, corporate names, trade names, domain names, logos, slogans, trade dress, and other similar designations of source or origin, together with the goodwill symbolized by any of the forgoing that in each case (a) are owned by a Party or its Affiliates or (b) such Party or its Affiliates has the right to use.

“Breaching Party” has the meaning set forth in Section 16.8.

“Bribery Laws” means the Foreign Corrupt Practices Act of 1977 (15 U.S.C. §§ 78dd-1, et seq.), or any other applicable anti-corruption legislation in any foreign jurisdiction, including the UK Bribery Act 2010.

“Broader Skin Scenario” means the case where there are [***] or more Skins for Online Sportsbooks are permitted to be operated in NY pursuant to the NY Gaming Law.

“Business Day” means any day in which banks are generally open for business in New York, New York.    

“Capital Investment Catch-up” has the meaning set forth in Section 3.3.4.

“Capital Investment Catch-up Distribution” means an amount equal to 50% of the Capital Investment Catch-up.

“Catskill Casino” has the meaning set forth in the Recitals of this Agreement.

“Change of Control” means, with respect to any Person, (i) a transfer, directly or indirectly, of all or substantially all of the assets of such Person, or (ii) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, whether through acquisition, purchase, assignment, conveyance, tender, tender offer, exchange, merger, consolidation, business combination, reorganization, recapitalization, spin-off, scheme of arrangement, reorganization, recapitalization or reclassification or otherwise in any manner

4    

whatsoever, of more than 50% of the Equity Securities of such Person entitled to vote in the election of members of the board of directors or similar body of such Person.

“Claims” has the meaning set forth in Section 17.1.

“Co-Branding” has the meaning set forth in Section 3.2.2.

“Code” has the meaning set forth in Section 10.2.

“Common Stock” has the meaning set forth in Section 2.1.

“Common Stock Delta” means:

(a)in the event there has not been a Change of Control of Empire or a Listing Failure prior to the Common Stock Trigger Date, the positive difference between (A) $20.00 and (B) the 30-Day VWAP of the Common Stock as of the Common Stock Trigger Date;

(b)in the event there has been a Listing Failure prior to the Common Stock Trigger Date, the positive difference between (i) $20.00 and (ii) the Common Stock Fair Market Value; and

(c)in the event there has been a Change of Control of Empire prior to the Common Stock Trigger Date, the positive difference between (x) $20.00 and (y) the Per Share CoC Value derived from the consideration paid by the Third Party in such Change of Control transaction.

“Common Stock Fair Market Value” means the fair market value of a share of the Equity Stake of Empire as of the Common Stock Trigger Date as determined by a nationally recognized independent investment bank mutually agreed upon by the Parties; provided, if the Parties cannot agree on such investment banker, each Party shall select the investment banking firm from the following firms by each removing one of following firms (the order of which Party removes first being determined randomly by lot): Morgan Stanley; JPMorgan and Credit Suisse. The remaining firm shall be the investment banker selected. The costs of the investment bank shall be borne by the Parties equally.

“Common Stock Trigger Date” means the thirtieth (30^th) day following Empire’s filing of its first Quarterly Report on Form 10-Q or Annual Report on Form 10-K (whichever is filed first) following the date on which bet365’s Unrecouped Investment equals zero or the date on which Empire is or, if no longer is required to file reports with Securities and Exchange Commission under Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, would have been required to make such filing.

“Competitive Business” means, (a) in the case of Empire or Operator, a Third Party and such Third Party’s Affiliates, other than an entity that is an Affiliate of Tan Sri Kim Kok Thay, that receives at least 1%, but less than 50% of its revenue from land-based casino operations and (b) in the case of bet365, a Third Party and such Third Party’s Affiliates that receives at least 1%, but less than 50% of its revenue from on-line gaming operations.

“Compliance Services” has the meaning set forth in Section 5.6.1.

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“Costs” means, without duplication, the following actual reasonable and verifiable expenses:

(a)    all costs and expenses incurred by such Party to a Governmental Entity to obtain, renew and maintain the requisite Gaming Approvals to (i) operate the Sportsbook Lounge or (ii) to offer the bet365 Gaming Service, including any out-of-pocket costs and expenses incurred by such Party in connection with the Operating License or Service License, such as reimbursement of investigation costs of the Gaming Authorities, but specifically excluding any Gaming Approvals that a member of the Empire Group is required to obtain, maintain or renewal to own or operate the Catskills Casino;

(b)    provided such expenses are not related to the gross negligence of the Transaction Party incurring such cost, any costs, fees, assessments, fines or penalties incurred for any reporting, investigation, certification or other regulatory requirements under NY Gaming Law or imposed by the applicable Gaming Authority relating solely to the operation of the Sportsbook Lounge or the bet365 Gaming Service (a “Gaming Fine”) but specifically excluding any Gaming Fines that a member of the Empire Group is required to pay in connection with its Gaming Approvals to own or operate the Catskills Casino;

(c)    all costs associated with procuring all bet365 Equipment and all Facility Expenses;

(d)    all costs incurred by either Party in connection with Registration Facilities and Gaming Terminals and all costs related to the agreement with Resorts World Casino New York in accordance with Section 14.8.3;

(e)     all bet365 Operational Costs; and

(f)    all Empire Operational Costs.

“Committee” has the meaning set forth in Section 4.1.

“Confidential Information” has the meaning set forth in Section 14.1.2.

“Customer Data” has the meaning set forth in Section 13.4.1.

“Data Breach” has the meaning set forth in Section 13.4.

“Deadlock” has the meaning set forth in Section 4.14.

“Dedicated Empire Executive” has the meaning set forth in Section 5.6.2.

“Derivative Content” has the meaning set forth in Section 13.3.2.

“Disclosing Party” has the meaning set forth in Section 14.1.1.

“Effective Date” has the meaning set forth in the preamble of this Agreement.

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“Eligible Market” means The New York Stock Exchange, the NYSE American, the Nasdaq Global Select Market, the Nasdaq Global Market or the Nasdaq Capital Market.

“Eligible Promotional Gaming Credit” means any promotional gaming credit that is wagered in the Catskills Casino through Retail Sports Betting or Online Gaming Services of the Operator which is available as a deduction from gross revenue pursuant to the NY Gaming Law.

“Emergency Expenditure” means payments required to be made (i) to avoid or minimize the imminent threat of any (A) loss or impairment of life or of personal injury, (B) violation of Law or infringement of Third Party intellectual property rights, or (C) security breach or unavailability or substantial impairment of the operation of the Sportsbook Lounge or the bet365 Gaming Service, (ii) to obtain, retain or renew any Governmental Approval required in order to offer or conduct the Retail Sports Betting or Online Sportsbook, or (iii) to prevent an unforeseeable breach of any Third Party agreement applicable to Sportsbook Lounge or bet365 Gaming Service.

“Empire” has the meaning set forth in the preamble of this Agreement

“Empire Brand” means the “Empire” Brand or such other Brand that Empire or its controlled Affiliates own or have the right to use that has national recognition.

“Empire Branded Online Sportsbook” has the meaning set forth in Section 3.3.2.

“Empire Domain Names” has the meaning set forth in Section 5.3.

“Empire Group” means Empire and any of its Affiliates, including the Operator.

“Empire IP” has the meaning set forth in Section 13.1.1.

“Empire Labor Costs” has the meaning set forth in the definition of Empire Operational Costs.

“Empire License Agreement” has the meaning set forth in Section 13.1.1.

“Empire Marketing Costs” has the meaning set forth in the definition of Empire Operational Costs.

“Empire OC Member” has the meaning set forth in Section 4.2.

“Empire Online Gaming Service Invoice” has the meaning set forth in Section 12.1.2.

“Empire Operational Costs” means all incremental out of pocket costs incurred by a member of the Empire Group in connection with complying with its obligations under this Agreement, including (a) providing the Compliance Services, (b) compensation on a time (at Rate Card Rate) basis for all employees (including temporary and permanent employees) of the Operator who are hired in connection with providing the Empire Sportsbook Lounge Services or Compliance Services and dedicate their time to providing such services (excluding executive officers of the Operator and the Dedicated Empire Executive) (all such costs, “Empire Labor Costs”), (c) Player

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Incentives in connection with the Sportsbook Lounge, (d) promotional losses (i.e., payouts that are not funded by Player contributions) associated with the Sportsbook Lounge, (e) Player-Related Costs, (f) any marketing costs incurred in connection with Section 14.5.1 (subject to Section 12.2.4) (“Empire Marketing Costs”), (g) fees or royalties paid to any sports league, whether required by Law or otherwise, (h) with respect to a Vendor, as contemplated by Article 11 and (i) any other amounts set forth in this Agreement as Costs to be paid by a member of the Empire Group.

“Empire Players Club” means the membership rewards club offered by the Catskills Casino identified as the “Players Club”.

“Empire Sportsbook Lounge Invoice” has the meaning set forth in Section 12.1.2.

“Empire Sportsbook Lounge Services” has the meaning set forth in Section 5.1.

“Empire Third-Party Claim” has the meaning set forth in Section 17.1.

“Enhancements” means improvements, enhancements, new releases, upgrades, updates, fixes, additions, substitutions and replacements from time to time made regarding the bet365’s Online Gaming Platform, including those that any Third Party supplying components of bet365’s Online Gaming Platform markets or makes available to its customers from time to time to correct deficiencies in or improvements of such components.

“Equipment Room License” has the meaning set forth in Section 8.2.

“Equity Securities” means, with respect to any Person, the shares of capital stock of (or other ownership or profit interests in) such Person, the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or the warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

“Equity Stake” has the meaning set forth in Section 2.1.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Facility” has the meaning set forth in Section 8.1.

“Facility Expenses” has the meaning set forth in Section 8.1.

“Federal Gaming Tax” means, for any given period, the USA federal excise tax and any other USA taxes (with the exception of income taxes) assessed based on Retail Sports Betting or Online Gaming Service revenues from operations from time-to-time and any replacement or charge in lieu of the foregoing on in lieu of an increase thereof.

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“Federal Online Gaming Law” means a USA federal Law that establishes the statutory framework, including authorizing the creation of necessary rules and regulations, which permits and governs the offering of any Online Sportsbook on an interstate level.

“Federally Prohibited Person” means any person: (1) listed in the annex to, or otherwise subject to the provisions of, Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transaction with Persons Who Commit, Threaten to Commit, or Support Terrorism (the “Executive Order”) and/or a person who is identified as or affiliated with a person designated as a terrorist, or associated with terrorism or money laundering pursuant to regulations promulgated in connection with the USA PATRIOT Act; (2) that is owned or controlled by, or acting for or on behalf of, any person that is listed in the annex to, or is otherwise subject to the provisions of, the Executive Order; (3) with whom a regulated lender is prohibited from dealing or otherwise engaging in any transaction by any terrorism or money laundering law, including the Executive Order; (4) who commits, threatens, or conspires to commit or supports “terrorism” as defined in the Executive order; (5) that is named as a “specially designated national and blocked person” on the most current list published by the U.S. Treasury Department Office of Foreign Assets Control at its official website, http://www.treas.gov.ofac/tllsdn.pdf or at any replacement website or other replacement official publication of such list; and (6) who is an Affiliate of or affiliated with a person listed above.

“Force Majeure” means any event which cannot be controlled, foreseen or prevented by using commercially reasonable efforts of a Party, and which materially and adversely affects and delays the performance of such Party of all or any portion of its obligations under this Agreement. Such an event includes unforeseen and unpreventable viruses or attacks to the network or any components of the bet365 Gaming Service or bet365’s Online Gaming Platform that are out of bet365’s control notwithstanding commercially reasonable security precautions and controls on the part of bet365, malfunctioning network, equipment or software or other disruptions in service, war, insurrection or civil disorder, military operations or terrorism, national or local emergency, acts or omissions of Governmental Entity, acts of God and natural disasters, fire, explosion, flood, theft or malicious damages, strike, lockout, similar industrial disputes, and third-party injunctions generally impacting the internet gaming industry in NY. For purposes of this definition, anything within the control of an Affiliate of a Party shall be deemed to be within the control of such Party.

“GAAP” means generally accepted accounting principles in the USA as then in effect.

“Gaming Approvals” means any and all required approvals, authorizations, licenses, permits, consents, findings of suitability, registrations, clearances, exemptions and waivers of or from any Gaming Authority, including those relating to the offering or conduct of gaming and gambling activities, or the use of gaming devices, equipment, supplies and associated equipment in the operation of a casino or other gaming enterprise (including Online Sportsbook) or the receipt or participation in revenues or revenues directly or indirectly derived therefrom.

“Gaming Authority” means, collectively, those international, federal, state, local, foreign and other governmental, regulatory and administrative authorities, agencies, commissions, boards, bodies and officials responsible for or involved in the regulation of gaming or gaming activities or

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the ownership of an interest in any Person that conducts gaming in any jurisdiction, including, within NY.

“Gaming Fine” has the meaning set forth in the definition of Costs.

“Gaming Laws” means those Laws pursuant to which any Gaming Authority possesses regulatory, licensing or permit authority over gaming within any jurisdiction, including the NY Gaming Law.

“Gaming Prohibited Person” means: (1) a person who is identified by any Gaming Authority as unsuitable to be associated with a gaming facility; (2) a person who has been denied an Gaming Approval in any jurisdiction; or (3) a person who has been subject to a suspension or revocation of a Gaming Approval in any jurisdiction.

“Gaming Regulations” means any applicable regulations (whether interim or final) promulgated by a Governmental Entity in NY pursuant to, or under authority granted by, the NY Gaming Law.

“Gaming Tax” means the gaming taxes levied on Internet gaming revenues as specified in the NY Gaming Law, as well as any other taxes or fees that may be imposed by any Governmental Entity on Retail Sports Betting or Online Sportsbook gaming revenues, including the federal excise tax, but specifically excluding any federal, State, local, county or non-USA income, payroll, employment, severance, stamp, business tax, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum, estimated or other similar tax or duties.

“Gaming Terminals” has the meaning set forth in Section 14.5.3(b).

“Guaranty Side Letter” has the means set forth Section 18.18.

“Guarantor” has the means set forth Section 18.18.

“Governmental Approvals” means, as applicable, all required approvals, authorizations, licenses, permits, consents, findings of suitability, registrations, exemptions and waivers of or from any Governmental Entity, including any Gaming Approvals.

“Governmental Entity” means any federal, state, local or foreign government or any provincial, departmental or other political subdivision thereof, or any entity, body or authority having or asserting executive, legislative, judicial, regulatory, administrative or other governmental functions or any court, department, commission, board, bureau, agency, instrumentality or administrative body of any of the foregoing, including any Gaming Authority.

“Go-Live Date” means the date upon which the bet365 Gaming Service, as applicable, is first offered to Players pursuant to this Agreement and the NY Gaming Law.

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“Highly Competitive Business” means, (a) in the case of Empire or Operator, a Third Party and such Third Party’s Affiliates, other than an entity that is an Affiliate of Tan Sri Kim Kok Thay, that receives at least 50% of its revenue from land-based casino operations and (b) in the case of bet365, a Third Party and such Third Party’s Affiliates that receives at least 50% of its revenue from on-line gaming operations.

“Indemnified Party” has the meaning set forth in Section 17.3.

“Indemnifying Party” has the meaning set forth in Section 17.3.

“Initial Term” has the meaning set forth in Section 16.1.

“Internet” means the international computer network of interoperable packet switched data networks, including the world-wide web, without regard to the means (or nature of the device) by which a user accesses the same.

“Invoice” has the meaning set forth in Section 12.1.2.

“Investment Cost” means all Costs incurred by bet365 or its Affiliates (a) associated with the Sportsbook Lounge prior to the Sportsbook Lounge Transition and shall include the Reimbursed Lounge Costs, and (b) associated with the bet365 Gaming Services prior to the applicable Go-Live Date,

“Law” means all applicable federal, state and local laws, statutes, regulations, codes, rules and ordinances including gaming, anti- corruption, environmental and labor laws, Occupational Safety and Health Administration (OSHA) regulations, the Telephone Consumer Protection Act (TCPA) together with regulations adopted by the Federal Communications Commission and Title III of the Americans with Disabilities Act.

“Listing Failure” means (i) the failure of the Common Stock to be registered pursuant to Section 12(b) or 12(g) of the Exchange Act or Empire taking action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, or (ii) the failure of the Common Stock to be listed or designated for quotation (as applicable) on an Eligible Market or Empire taking action designed to, or which to its knowledge is likely to have the effect of, terminating the listing or designation for quotation of the Common Stock on an Eligible Market.

“Limited Skin Scenario” means the case where there are [***] or fewer Skins permitted to be operated in NY pursuant to the NY Gaming Law.

“Lounge Buildout Costs” has the meaning set forth in Section 3.1.3.

“Lounge Operational Costs” has the meaning set forth in Section 3.1.3.

“Market Opening Date” means the first date on which the NY Gaming Law authorizes a Person who then holds an Operating License in NY to engage in the operation, management, administration and making available of an Online Sportsbook to Players.

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“Minimum Access Threshold” means, (a) in the case of a Limited Skin Scenario, $[***] per Additional Skin or (b) Broader Skin Scenario, $[***] per Additional Skin.

“Minimum NRG Threshold” means, (a) in a Limited Skin Scenario, a revenue share of [***]% of the Net Gaming Revenue paid to Empire for such Additional Skin or (b) in a Broader Skin Scenario, a revenue share of [***]% of the Net Gaming Revenue paid to Empire for such Additional Skin.

“Monthly Preferred Distribution” means an amount equal to the Preferred Distribution divided by 36.

“Monthly Statement” has the meaning set forth in Section 12.1.5.

“Montreign” has the meaning set forth in the Recitals of this Agreement.

“Net Gaming Revenue” means the applicable gross gaming revenue minus (a) all applicable Gaming Taxes minus (b) Player Incentives (not to exceed [***]% of gross gaming revenue), minus (c) chargebacks.

“New Content” has the meaning set forth in Section 13.3.2.

“NGR Shortfall Distribution” means an amount equal to 50% of the difference between (a) in a Limited Skin Scenario, [***]% and the applicable revenue share paid to Empire and considered Revenue for such Additional Skin, and (b) in a Broader Skin Scenario, [***]% and the applicable revenue share paid to Empire and considered Revenue for such Additional Skin.

“Non-Owning Party” has the meaning set forth in Section 13.4.1.

“Non-Solicitation Period” has the meaning set forth in Section 14.4.

“NY” has the meaning set forth in the Recitals of this Agreement.

“NY Gaming Law” means a Law in NY that establishes the statutory framework, including authorizing the creation of necessary rules and regulations, which permits or governs the offering of, as applicable, (i) a Retail Sports Betting or (ii) an Online Sportsbook on an intrastate basis to the residents of such State. Following enactment of a NY Gaming Law, such definition shall also include all Gaming Regulations promulgated thereunder.

“NY Gaming Tax” means, for any given period, all taxes, fees, assessments and levies assessed based on Sportsbook Lounge GGR or Online Gaming Service GGR (as specified in the NY Gaming Law) payable to a NY Governmental Entity.

“NY Governmental Entities” means exclusively those Governmental Entities with authority from, and jurisdiction exclusively within, NY.

“OC Members” has the meaning set forth in Section 4.1.

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“Online Casino/Table Games” means an Online Gaming Service whereby Players play (i) casino-style games of chance that are the types of games played in casinos (i.e., roulette, baccarat, blackjack, bingo, craps, big six wheel, keno, slot machines, mini-baccarat, red dog, pai gow, and sic bo, or variations thereof) or (ii) non peer-to-peer simulated table games (i.e., blackjack, roulette, craps or variations thereof), in each case.

“Online Gaming Platform” means one or more online, interactive-software products to conduct, support and maintain an Online Gaming Service, including, (i) software games and applications, (ii) anti-money laundering, “know-your-customer” and problem-gaming functionality, (iii) player account, back-end registration and payment/cashier-system functions and components, (iv) responsible gaming controls, (v) back-office tools and (vi) affiliate, loyalty and bonus systems, each as updated, modified or enhanced from time to time.

“Online Gaming Service” means, as permitted by the NY Gaming Law, interactive online gaming service offered or conducted via the Internet, mobile or other remote or electronic device or data network, whereby Players play games in which such participant stakes goods of monetary value and can win money or goods of monetary value, but specifically does not include any free play / play-for-fun social games or subscription based games.

“Online Poker” means an Online Gaming Service whereby Players participate in peer-to-peer games such as poker and bingo.

“Online Sportsbook” means an Online Gaming Service whereby Players are permitted to wager on events, activities or items similar to what is permitted with respect to Retail Sports Betting.

“Online Gaming Service GGR” means the total gross gaming revenues derived from the offering or conduct of the bet365 Gaming Service (i.e., the total of all sums wagered by Players of the bet365 Gaming Service less the total of all sums actually paid out as winnings to such Players).

“Operating License” means all necessary Gaming Approvals that permit the Operator to operate, manage, administer and make available an Online Sportsbook to Players.

“Operator” means the member of the Empire Group that obtains the Operating License.

“Owning Party” has the meaning set forth in Section 13.4.1.

“Party” and “Parties” have the meanings set forth in the preamble of this Agreement.

“Per Share CoC Value” means the fair market value of a share of the Equity Stake at the closing of such Change of Control transaction (i.e., a per share of Equity Stake valuation). Such fair market value shall be determined as follows, as applicable: (i) the amount of cash on a per Equity Stake basis paid in such Change of Control transaction to a holder of the Equity Stake; (ii) the fair market value of any Equity Securities on a per Equity Stake basis received by a holder of share of the Equity Stake, which fair market value shall be determined as of the Common Stock Trigger Date; (iii) a combination of (i) and (ii); or (iv) in the event no consideration is received by a holder of an Equity Stake, the Common Stock Fair Market Value. To the extent Equity Securities

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are received as part of the consideration paid by the Third Party in such Change of Control transaction, the fair market value of such Equity Securities for purpose of this definition shall be equal to the 30-Day VWAP for such Equity Securities or, if no 30-Day VWAP is reported, the fair market value agreed to by Empire and the Third Party in such Change of Control transaction.

“Permitted Court” means any federal court located in New York, New York.

“Person” means any individual, partnership, corporation, limited liability company, association, joint stock company, trust, joint venture, unincorporated organization, Governmental Entity.

“Players” means those Persons who are permitted, in accordance with the NY Gaming Law, to participate in Retail Sports Betting, Online Gaming Services, including Persons physically present in a jurisdiction other than the applicable NY which participate in such Online Gaming Services as a part of a common player pool to the extent permitted by such NY Gaming Law.

“Player Accounts” has the meaning set forth in Section 9.1.

“Player Incentives” means, subject to receipt of required Gaming Approvals, any sign-up bonuses, retention bonuses, cash credits, free-play, awarded to bet365 Players or patrons participating in Retail Sports Betting within the Sportsbook Lounge, as applicable, at no cost to such Players’ loyalty points or other inducements offered to Players to be redeemed for goods or cash in their player account for future plays on or withdrawal from the bet365 Gaming Service or Retail Sports Betting within the Sportsbook Lounge, as applicable.

“Player Withholding Tax” means any Tax that must be deducted and withheld upon settlement of the winnings to any Retail Sport Betting bettor or any bet365 Players pursuant to applicable Law.

“Player-Related Costs” means any of the following amounts related to the bet365 Gaming Service or the Sportsbook Lounge, as applicable: (i) defending and settling any Player complaints or claims, including refunds and associated costs and fees as a result thereof; (ii) payment processing, charge-backs and associated costs and fees (including credit card processing fees), (iii) Verification Checks and (iv) geo-location fees.

“Preferred Distribution” means an amount equal to 50% of the Common Stock Delta multiplied by the number of shares of the Equity State held by bet365 or its Affiliate on the Common Stock Trigger Date; provided that in the event that bet365 has sold or transfer any portion of the Equity State to a Third Party prior to the Common Stock Trigger Date, the Preferred Distribution shall be deemed to be $0.

“Pro Rata Share” means comparing the Online Gaming Service GGR as officially reported by bet365 to the applicable Gaming Authority as compared to the aggregate gross gaming revenue for online sportsbooks offered or operated by bet365 or its Affiliates throughout the US as officially reported by bet365 or its Affiliates to the applicable Gaming Authority in such other States within the US.

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“Rate Card Rate” means a daily rate equal to the total compensation paid to an employee or independent contractor of the applicable Transaction Party or its Affiliate, including gross salary/compensation, bonuses and other disbursements, plus the actual cost incurred by such Transaction Party or its Affiliate for any other employee benefits provided such employee (i.e., health, dental or disability insurance) determined on a daily basis (based on a 5 day work week).

“Recipient” has the meaning set forth in Section 14.1.1.

“Registration Facilities” has the meaning set forth in Section 14.5.3(a).

“Reimbursed Lounge Costs” has the meaning set forth in Section 3.1.3.

“Renewal Term” has the meaning set forth in Section 16.1.

“Representatives” has the meaning set forth in Section 14.1.1.

“Retail Sports Betting” means the wagering on events, including any individual performance in any sport or athletic event, e-sports, motor or horse/dog racing or any other events permitted under the Operating License, in which such participant stakes goods of monetary value and can win money or goods of monetary value, provided such wagering and payout on any winnings are all preformed within a physical location, as compared to over the Internet, mobile or other remote or electronic device.

“Resorts World Casino New York” has the meaning set forth in Section 14.5.

“Revenue” means the following: (a) all Sportsbook Lounge GGR; (b) all Online Gaming Service GGR, (c) all consideration paid to any member of the Empire Group or bet365 in connection with an Additional Skin, including any cash capital investments paid as part a Strategic Capital Investment that shall be considered Revenue in accordance with Section 3.3.4, and (d) any amounts paid by a Vendor, as contemplated by Article 11, (e) as contemplated by Section 3.3.3, and (f) as contemplated by Section 5.7.4.

“Profit Share” has the meaning set forth in Section 12.3.9.

“Second Closing Shares” has the meaning set forth in the Stock Purchase Agreement.

“Service License” means any and all necessary Gaming Approvals that will permit bet365 to provide online business-to-business services, directly or indirectly, to a holder of an Operating License, for the offering of a bet365 Gaming Service.

“Shortfall” means any Costs incurred during a month that, as a result of insufficient Revenue, cannot be funded or reimbursed pursuant to Section 12.3.6.

“Skin” means an Online Gaming Service that is identified by a specific Brand (i.e., branding an Online Sportsbook) and is permitted to operate under an Online Gaming Platform that is different from the other branded Online Gaming Services on the same Operating License.

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“Sportsbook Lounge” has the meaning set forth in Section 3.1.1.

“Sportsbook Lounge Betting Platform” has the meaning set forth in Section 3.1.2.

“Sportsbook Lounge GGR” means total gross gaming revenues derived from the Sportsbook Lounge (i.e., the total of all sums wagered in the Sportsbook Lounge less the total of all sums actually paid out as winnings on such wagers).

“Sportsbook Lounge Transition” has the meaning set forth in Section 3.1.2.

“Stock Purchase Agreement” has the meaning set forth in Section 2.1.

“Strategic Capital Investment” has the meaning set forth in Section 3.3.3.

“Subcontractor” has the meaning set forth in Section 5.3.

“Tangible Net Worth” means a Peron’s total assets excluding all intangible assets (i.e. goodwill, trademarks, patents, copyrights, organizational expense, and similar intangible items, but including leaseholds and leasehold improvements) less total debt, determined in accordance with GAAP.

“Tax” means all taxes (including income, profit, franchise, sales, use, real property, personal property, ad valorem, excise, employment, social security and wage withholding taxes) and installments and estimated taxes, assessments, deficiencies, levies, imposts, duties, withholdings, or other similar charges of every kind, character and description and any interest, penalties or additions to tax imposed thereon or in connection therewith.

“Term” means the period starting on the Effective Date and ending on the termination of this Agreement in accordance with the terms set forth herein.

“Third Party” means any Person who is not a Party or such Party’s Affiliate, officer, manager, employee, general partner or director.

“Third Party Claim” means a bet365 Third-Party Claim or an Empire Third-Party Claim, as the context may require.

“Third Party Claim Notice” has the meaning set forth in Section 17.3.

“Third Party Content Costs” means any costs or fees owed to a Third Party in respect of the underlying licenses for, or the provision of, products or services for inclusion in the bet365 Gaming Service, including data/results, business intelligence software, streaming and, if applicable, content for other Online Gaming Services (i.e., casino or poker).

“Trading Day” means, as applicable, with respect to all price or trading volume determinations relating to any Equity Securities, any day on which such Equity Securities are traded on the Nasdaq Capital Market, or, if the Nasdaq Capital Market is not the principal trading market for such Equity Securities, then on the principal securities exchange or securities market on which

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such Equity Securities are then traded, provided that “Trading Day” shall not include any day on which such Equity Securities are scheduled to trade on such exchange or market for less than 4.5 hours or any day that such Equity Securities are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the bet365.

“Transaction Party” means bet365, on the one hand, and Empire or the Operator, individually or collectively, as applicable, on the other hand.

“Transition Date Invoice” has the meaning set forth in Section 12.1.2.

“Unrecouped Capital Investment Catch-up” means the Capital Investment Catch-up reduced by the payments made to bet365 pursuant to Section 12.3.8.

“Unrecouped Investment Costs” means the amount of all Investment Costs reduced by the payments made to bet365 pursuant to Section 12.3.2.

“Unrecouped NGR Shortfall Distribution” means the NGR Shortfall Distribution reduced by the payments made to bet365 pursuant to Section 12.3.7.

“Unrecouped Preferred Distribution” means the amount of the Preferred Distribution reduced by the payments made to bet365 pursuant to Section 12.3.6.

“Unrecouped Shortfall” means the amount of all Shortfalls reduced by the payments made to bet365 pursuant to Section 12.3.4.

“Unsuitable Person” means a Person who (a) is a Gaming Prohibited Person, (b) causes a Party or any of its Affiliates to lose or to be threatened with the loss of any Gaming Approvals, or (c) is deemed likely, in the sole and absolute discretion of a Party based on verifiable information or information received from the Gaming Authorities or other reliable sources such as background checks, credit searches and searches of the public records, to (i) preclude or materially delay, impede, impair, threaten or jeopardize any Gaming Approval or such Party’s Affiliates’ application for or ability to obtain or retain any Gaming Approval, or (ii) result in the imposition of materially burdensome terms and conditions on any Gaming Approval.

“USA” means the United States of America, including any state, territory or possession thereof.

“USA PATRIOT Act” has the meaning set forth in Section 7.1.2.

“Vendor” has the meaning set forth in Section 11.1.

“Vendor Contracts” shall have the meaning set forth in Section 11.1.

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“Verification Checks” means the checks carried out in order to attempt to verify the age, identity, location, of a potential bet365 Player in accordance with applicable Laws, including whether such Player is excluded from play (including self-exclusion).

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Schedule B

Compliance Services

The Operator shall be responsible for:

• Filing all reports and returns with the Gaming Authorities required of a holder of an Operating License with respect to the Sportsbook Lounge or bet365 Gaming Service, including, Sportsbook Lounge GGR or Online Gaming Service GGR (including any applicable deductions for Eligible Promotional Gaming Credits to the extent permitted by NY Online Gaming Law), accounting and financial reports, customer activity and disputes reports, and reports regarding fraud and collusion;

• Subject to Section 10.1, remitting all Gaming Tax and fees or royalties paid to any sports league, as required by Law, associated with the bet365 Gaming Service;

• Accepting Player deposits and processing withdrawals at the casino cashier cage (as required by the Gaming Regulations) and issuing casino checks for withdrawals;

• Providing all reasonable access to and use of Empire “key employees” (as defined under NY Online Gaming Law) to support bet365’s applications for, and maintenance of, Governmental Approvals required under NY Online Gaming Law;

• Be responsible for regulatory liaison for:

1.    Reporting and management of customer activity and disputes;

2. Reporting and management of service issues, e.g., advertising, fraud and collusion, underage, geo-location, responsible gaming, excluded individuals and self-excluded individuals;

3.    Integrity of customer data, privacy and protection;

4. Filing all Currency Transaction Reports (“CTRs”) and Suspicious Activity Reports-Casinos (“SARCs”);

5.    Reporting of customers taxable winnings;

6.    Responding to Gaming Authority data requests;

7. Filing of release notes to Gaming Authorities prior to changes to the gaming system being installed;

8.    Management and payment of fines; and

9.    Accounting and financial reporting functions.

• Maintenance of required bank accounts and reporting software including payment of fees.

• Internal audit functions and cooperation with external auditors.

• Review and approve and compliance with internal controls.

• All other items as the NY Gaming Law requires the Operator to provide in connection with an Online Sportsbook.

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EX-10.74

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

Date of Issuance: March 15, 2018

EMPIRE RESORTS, INC.

Common Stock Warrant

Empire Resorts, Inc. (the “Company”), for value received, hereby certifies that Monticello Harness Horsemen’s Association (the “Registered Holder”), is entitled, subject to the terms of this Common Stock Warrant (the “Warrant”) set forth below, to purchase from the Company, at any time after the Date of Issuance (the “Commencement Date”) and on or before seven (7) years from the Closing, as defined in the Securities Acquisition Agreement, dated November 3, 2014 (the “Agreement”), by and between the Company and the Registered Holder (the “Expiration Date”), up to Sixty Thousand (60,000) shares of Common Stock of the Company (the “Warrant Stock”), par value $0.01 per share (the “Common Stock”), at a per share exercise price (the “Exercise Price”) equal to $81.50 per share (subject to adjustment as set forth in Section 2).

1.    Exercise.

(a)    Method of Exercise. This Warrant may be exercised by the Registered Holder, in whole or in part, by delivering the form appended hereto as Exhibit A duly executed by such Registered Holder (the “Exercise Notice”), at the principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date of such exercise, accompanied by payment in full of the Exercise Price payable with respect to the number of shares of Warrant Stock purchased upon such exercise. The Exercise Price must be paid by cash, check or wire transfer in immediately available funds for the Warrant Stock being purchased by the Registered Holder, except as provided in Section 1(c).    

(b)    Effective Time of Exercise. Each exercise of this Warrant shall be deemed to have been effected immediately prior to the close of business on the day on which the Exercise Notice has been delivered to the Company (the “Exercise Date”) as provided in this Section 1. At such time, the person or persons in whose name or names any certificates for Warrant Stock shall be issuable upon such exercise as provided in Section 1(d) below shall be deemed to have become the holder or holders of record of the Warrant Stock represented by such certificates.

(c)    Broker-Assisted Cashless Exercise. Notwithstanding any provisions herein to the contrary, in lieu of exercising this Warrant in the manner set forth in Section 1(a), the Registered Holder may elect to exercise this Warrant, or a portion hereof, and to pay for the Warrant Stock by way of a broker-assisted cashless exercise (a “Broker-Assisted Cashless Exercise”).

(d)     Delivery to Holder. As soon as practicable after the exercise of this Warrant in whole or in part, and in any event within three (3) business days thereafter (the “Warrant Stock Delivery Date”), the Company will cause to be issued in the name of, and delivered to, the Registered Holder, or as such Registered Holder (upon payment by such Registered Holder of any applicable transfer taxes) may direct:

(i)    a certificate or certificates for the number of shares of Warrant Stock to which such Registered Holder shall be entitled, and

(ii)    in case such exercise is in part only, a new warrant or warrants of like tenor, calling in the aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (giving effect to any adjustment therein) to the number of such shares called for on the face of this Warrant minus the number of such shares surrendered for exercise as provided in Section 1(a).

2.     Adjustments. The Exercise Price and the number of shares purchasable hereunder are subject to adjustment from time to time as follows:

(a)          Reclassification, etc. If the Company at any time while this Warrant, or any portion thereof, remains outstanding and unexpired shall, by reclassification of securities or otherwise, change any of the securities as to which purchase rights under this Warrant exist into the same or a different number of securities of any other class or classes, this Warrant shall thereafter represent the right to acquire such number and kind of securities as would have been issuable as the result of such change with respect to the securities which were subject to the purchase rights under this Warrant immediately prior to such reclassification or other change and the Exercise Price therefor shall be appropriately adjusted, all subject to further adjustment as provided in this Section 2.

(b)          Split, Subdivision or Combination of Warrant Stock. If the Company at any time while this Warrant, or any portion thereof, remains outstanding and unexpired shall split, subdivide or combine the securities as to which purchase rights under this Warrant exist, into a different number of securities of the same class, the Exercise Price for such securities shall be proportionately decreased in the case of a split or subdivision or proportionately increased in the case of a combination and number increased or decreased proportionally.

(d)          Certificate as to Adjustments. Upon the occurrence of each adjustment or readjustment pursuant to this Section 2, the Company at its expense shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of this Warrant a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Company shall, upon the written request, at any time, of any such holder, furnish or cause to be furnished to such holder a like certificate setting forth: (i) such adjustments and readjustments; (ii) the Exercise Price at the time in effect; and (iii) the number of shares and the amount, if any, of other property which at the time would be received upon the exercise of the Warrant.

3.    Transfers.

(a)    Unregistered Security. The holder of this Warrant acknowledges that this Warrant has not been registered under the Securities Act and agrees not to sell, pledge, distribute, offer for sale, transfer or otherwise dispose of this Warrant or any Warrant Stock (or Common Stock) issued upon its exercise in the absence of (i) an effective registration statement under the Securities Act as to this Warrant or such Warrant Stock and registration or qualification of this Warrant or such Warrant Stock (or Common Stock) under any applicable U.S. federal or state securities law then in effect or (ii) an opinion of counsel, reasonably satisfactory to the Company, that such registration and qualification are not required.

(b)    Transferability. This Warrant and all rights hereunder are not transferable.

(c)    Warrant Register. The Company will maintain a register containing the names and addresses of the Registered Holder of this Warrant. Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder of this Warrant as the absolute owner hereof for all purposes. The Registered Holder may change such Registered Holder’s address as shown on the warrant register by written notice to the Company requesting such change.

(d)          Compliance with Securities Laws.

(i)          The Warrant and the Warrant Stock are characterized as “restricted securities” under the Securities Act inasmuch as they are being acquired from the Company in a transaction not involving a public offering, and that under the Securities Act and applicable regulations thereunder, such securities may be resold without registration under the Securities Act only in certain limited circumstances. In this connection, the Holder represents that it is familiar with the Securities and Exchange Commission (“SEC”) Rule 144, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. The Company is under no obligation to register any of the securities sold hereunder. No public market now exists for this Warrant and it is uncertain whether a public market will ever exist for this Warrant.

(ii)          This Warrant and all certificates for the Warrant Stock issued upon exercise hereof shall be stamped or imprinted with a legend in substantially the following form (in addition to any legend required by state securities laws):

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR SATISFACTORY ASSURANCES TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED WITH RESPECT TO SUCH SALE, OFFER, PLEDGE OR HYPOTHECATION.”

4.    Termination. This Warrant (and the right to purchase securities upon exercise hereof) shall terminate at 5:00 p.m., Eastern Time, on the Expiration Date.

5.    Reservation of Stock. The Company covenants that at all times it will have authorized, reserve and keep available, solely for the issuance and delivery upon the exercise of this Warrant, such shares of Warrant Stock and other stock, securities and property, as from time to time shall be issuable upon the exercise of this Warrant. The Company covenants that all Warrant Stock that may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the shares of Warrant Stock upon the exercise of the purchase rights under this Warrant by the Registered Holder. The Company will take all such reasonable action as may be necessary to assure that such Warrant Stock may be issued as provided herein without violation of any applicable law or regulation. In no event shall the Company be obligated to cash settle the Warrant.

6.    Replacement of Warrants. Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.

7.    Notices. Any notice required or permitted by this Warrant shall be in writing and shall be deemed duly given upon receipt, when delivered personally or by courier, overnight delivery service, confirmed facsimile or electronic mail, or 48 hours after being deposited in the regular mail as certified or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Registered Holder, to the address of the Registered Holder most recently furnished in writing to the Company and (b) if to the Company, to the address set forth on the signature page of this Warrant or as subsequently modified by written notice to the Registered Holder.

8.    No Rights as Stockholder. Until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise any rights by virtue hereof as a stockholder of the Company.

9.    No Fractional Shares. No fractional shares of Common Stock will be issued in connection with any exercise hereunder. In lieu of any fractional shares which would otherwise be issuable, the Company shall round the amount of Warrant Stock issuable to the nearest whole share.

10.    Consent, Amendment or Waiver. Any term of this Warrant may be amended or waived upon written consent of the Company and the Registered Holders of a majority of the Warrant Stock issuable upon the issued and outstanding Warrants.

11.    Headings. The headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision of this Warrant.

12.    Governing Law. This Warrant and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect to principles of conflicts of law.

13.    Counterparts. This Warrant may be executed in counterparts, and each such counterpart shall be deemed an original for all purposes.

IN WITNESS WHEREOF, the parties have executed this Warrant as of the date first above written.

EMPIRE RESORTS, INC.

By: /s/ Ryan Eller________________________

Name: Ryan Eller

Title: President and Chief Executive Officer

(A)

Exhibit A

WARRANT EXERCISE FORM

[To be executed only upon exercise of Warrant]

To EMPIRE RESORTS, INC.:

The undersigned registered holder of the within Warrant hereby irrevocably exercises the Warrant with respect to ________________________ Warrant Stock, at an exercise price per share of $[ ], and requests that the certificates for such Warrant Stock be issued in the name of, and delivered to:

______________________________________

______________________________________

______________________________________

______________________________________

The undersigned is hereby making payment for the Warrant Stock in the following manner: [check one]

[ ]    by cash in accordance with Section 1(a) of the Warrant

[ ]    via cashless exercise in accordance with Section 1(c) of the Warrant in the following manner:

______________________________________________________________________________

______________________________________________________________________________

______________________________________________________________________________

The undersigned hereby represents and warrants that it is, and has been since its acquisition of the Warrant, the record and beneficial owner of the Warrant.

Dated: _______________    

________________________________________

Print or Type Name

________________________________________

(Signature must conform in all respects to name of holder as specified on the face of Warrant)

________________________________________

(Street Address)

________________________________________

(City) (State) (Zip Code)

Exhibit B

ASSIGNMENT FORM

[To be executed only upon transfer of Warrant]

For value received, the undersigned registered holder of the within Warrant hereby sells, assigns and transfers unto _____________________ [include name and addresses] the rights represented by the Warrant to purchase __________ shares of Common Stock of EMPIRE RESORTS, INC. to which the Warrant relates, and appoints _____________________ Attorney to make such transfer on the books of EMPIRE RESORTS, INC. maintained for the purpose, with full power of substitution in the premises.

Dated:         ________________________________________

(Signature must conform in all respects

to name of holder as specified on the

face of Warrant)

________________________________________

(Street Address)

________________________________________

(City) (State) (Zip Code)

Signed in the presence of:

________________________________________

(Signature of Transferee)

________________________________________

(Street Address)

________________________________________

(City) (State) (Zip Code)

Signed in the presence of:

EX-21.1

Exhibit 21.1

List of Subsidiaries of Empire Resorts, Inc.:

Name	State of Incorporation/Formation
Alpha Monticello, Inc.	Delaware
Alpha Casino Management Inc.	Delaware
Monticello Raceway Management, Inc.	New York
Montreign Holding Company, LLC	New York
Montreign Operating Company, LLC	New York
Empire Resorts Real Estate I, LLC	New York
Empire Resorts Real Estate II, LLC	New York

EX-23.1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

• Registration Statement (Form S-3 No. 333-214119) of Empire Resorts, Inc.,

• Registration Statement (Form S-8 No. 333-215484) pertaining to the Empire Resorts, Inc. Executive Deferred Compensation Plan, and

• Registration Statement (Form S-8 No. 333-208791) pertaining to the Empire Resorts, Inc. 2015 Equity Incentive Plan;

of our reports dated March 15, 2019, with respect to the consolidated financial statements and schedule of Empire Resorts, Inc. and subsidiaries and the effectiveness of internal control over financial reporting of Empire Resorts, Inc. and subsidiaries included in this Annual Report (Form 10-K) of Empire Resorts, Inc. for the year ended December 31, 2018.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

March 15, 2019

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 annual report on Form 10-K 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: March 15, 2019	/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 annual report on Form 10-K 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: March 15, 2019	/s/ Jamie M. Sanko
	Jamie M. Sanko
	Chief Accounting Officer (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. §1350), the undersigned, Ryan Eller, Chief Executive Officer of Empire Resorts, Inc., a Delaware corporation (the “Company”), and Jamie M. Sanko, Chief Accounting Officer of the Company, do hereby certify, to his and her knowledge, that:

The Annual Report Form 10-K for the year ended December 31, 2018 of the Company (the “Report”) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Ryan Eller
March 15, 2019	Ryan Eller
	Chief Executive Officer (Principal Executive Officer)
By:	/s/ Jamie M. Sanko
March 15, 2019	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 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.

XML

Document and Entity Information - USD ($)	12 Months Ended
	Dec. 31, 2018	Mar. 15, 2019	Jun. 29, 2018
Document and Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Entity Registrant Name	EMPIRE RESORTS INC
Entity Central Index Key	0000906780
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding		34,423,250
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Public Float			$ 71,753,062

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 28,338	$ 10,380
Restricted cash	373	693
Accounts receivable, net	5,965	1,273
Inventories	936	174
Prepaid expenses and other current assets	8,026	3,376
Total current assets	43,638	15,896
Property and equipment, net	697,679	26,863
Capitalized Development Projects costs	5,724	566,797
Restricted cash and investments for Development Projects	21,039	136,431
Intangible assets	45,216	51,000
Cash collateral for deposit bond	0	35,000
Other assets	33,130	251
Total assets	846,426	832,238
Current liabilities:
Accounts payable	9,894	2,686
Current portion of long-term debt	48,004	14,588
Accrued Development Projects costs	4,922	71,713
Accrued expenses and other current liabilities	33,678	7,320
Total current liabilities	96,498	96,306
Long-term loan, related party, net of debt issuance costs	30,954	0
Long-term debt, net of current portion	495,693	455,148
Other long-term liabilities	11,442	9,463
Total liabilities	634,587	560,917
Stockholders’ equity:
Common stock	344	326
Additional paid-in capital	651,623	572,342
Accumulated other comprehensive loss	(219)	(315)
Accumulated deficit	(439,910)	(301,032)
Total stockholders’ equity	211,839	271,321
Total liabilities and stockholders’ equity	846,426	832,238
Series B
Stockholders’ equity:
Preferred stock	1	0
Series F
Stockholders’ equity:
Preferred stock	$ 0	$ 0

XML

Consolidated Balance Sheets (Parenthetical)	Dec. 31, 2018 $ / shares shares
Common stock, par value (usd per share) | $ / shares	$ 0.01
Common stock, shares authorized (in shares)	150,000,000
Common stock, shares issued (shares)	34,403,250
Common stock, shares outstanding (shares)	34,403,250
Series B
Preferred stock, par value (usd per share) | $ / shares	$ 0.01
Preferred stock, per share liquidation value (usd per share) | $ / shares	$ 29
Preferred stock, shares authorized (in shares)	5,000,000
Preferred stock, shares issued (shares)	44,258
Preferred stock, shares outstanding (in shares)	44,258
Series F
Preferred stock, per share liquidation value (usd per share) | $ / shares	$ 20
Preferred stock, shares issued (shares)	0
Preferred stock, shares outstanding (in shares)	0
Preferred stock, redemption (usd per share) | $ / shares	$ 20

XML

Consolidated Statements Of Stockholders' Equity/(Deficit) - USD ($) $ in Thousands	Total	Series F	Preferred Stock Series B	Preferred Stock Series F	Common Stock	Additional paid-in capital	Additional paid-in capital Series F	Other Comprehensive Loss	Accumulated deficit
Balances, shares, beginning balance at Dec. 31, 2015			44,000	0	9,561,000
Balances, beginning balance at Dec. 31, 2015	$ (1,459)		$ 0	$ 0	$ 96	$ 228,512		$ 0	$ (230,067)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends paid on Series B Preferred Stock	(295)								(295)
Kien Huat note conversion, shares					1,332,000
Kien Huat note conversion	17,426				$ 14	17,412
Stock Grant to Horseman, shares					20,139,000
Stock Grant to Horsemen	$ 286,003				$ 201	285,802
Options exercised, shares	18,000
Stock-based compensation	$ 2,122					2,122
Stock issued for legal settlement, shares					124,000
Stock issued for legal settlement	34				$ (1)	35
Net loss	(24,197)								(24,197)
Balances, shares, endings balance at Dec. 31, 2016			44,000	0	31,156,000
Balances, ending balance at Dec. 31, 2016	279,566		$ 0	$ 0	$ 312	533,813		0	(254,559)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends paid on Series B Preferred Stock	(129)								(129)
Kien Huat note conversion, shares					1,380,000
Kien Huat note conversion	$ 35,889				$ 14	35,875
Options exercised, shares	2,000				2,000
Options and Option Matching Rights exercised	$ 16					16
Restricted stock forfeited for tax payment, shares					(12,000)
Restricted stock forfeited for tax payment	(275)					(275)
Stock-based compensation	2,155					2,155
Stock issued for legal settlement, shares					34,000
Stock issued for legal settlement	758					758
Comprehensive loss	(315)							(315)
Net loss	(46,344)								(46,344)
Balances, shares, endings balance at Dec. 31, 2017			44,000	0	32,560,000
Balances, ending balance at Dec. 31, 2017	271,321		$ 0	$ 0	$ 326	572,342		(315)	(301,032)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(26,233)
Balances, ending balance at Mar. 31, 2018	248,979
Balances, shares, beginning balance at Dec. 31, 2017			44,000	0	32,560,000
Balances, beginning balance at Dec. 31, 2017	271,321		$ 0	$ 0	$ 326	572,342		(315)	(301,032)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(63,230)
Balances, ending balance at Jun. 30, 2018	212,593
Balances, shares, beginning balance at Dec. 31, 2017			44,000	0	32,560,000
Balances, beginning balance at Dec. 31, 2017	271,321		$ 0	$ 0	$ 326	572,342		(315)	(301,032)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(97,122)
Balances, ending balance at Sep. 30, 2018	179,672
Balances, shares, beginning balance at Dec. 31, 2017			44,000	0	32,560,000
Balances, beginning balance at Dec. 31, 2017	271,321		$ 0	$ 0	$ 326	572,342		(315)	(301,032)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Dividends paid on Series B Preferred Stock	(128)								(128)
Kien Huat note conversion	96							96
Stock Grant to Horseman, shares					200,000
Stock Grant to Horsemen	4,720				$ 2	4,718
Stock issuance, shares					1,686,000
Stock issued	$ 30,568	$ 43,003		$ 1	$ 16	30,552	$ 43,002
Options exercised, shares	1,700				3,000
Options and Option Matching Rights exercised	$ 50					50
Stock-based compensation	1,926					1,926
Stock issued for legal settlement, shares					(46,000)
Stock issued for legal settlement	(967)					(967)
Net loss	(138,696)								(138,696)
Balances, shares, endings balance at Dec. 31, 2018			44,000	0	34,403,000
Balances, ending balance at Dec. 31, 2018	211,839		$ 0	$ 1	$ 344	$ 651,623		$ (219)	$ (439,910)
Balances, beginning balance at Mar. 31, 2018	248,979
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(36,997)
Balances, ending balance at Jun. 30, 2018	212,593
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(33,892)
Balances, ending balance at Sep. 30, 2018	$ 179,672

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Revenues:
Gross revenues	$ 194,845	$ 69,893	$ 70,301
Less: Promotional allowances	0	(4,042)	(2,847)
Net revenues	194,845	65,851	67,454
Operating costs and expenses:
Selling, general and administrative	68,518	18,498	22,414
Development Projects	12,574	21,558	12,970
Amortization of gaming license	5,784	0	0
Depreciation	28,993	1,517	1,341
Total operating costs and expenses	283,909	95,768	91,137
Loss from operations	(89,064)	(29,917)	(23,683)
Other expense	(561)	0	0
Interest expense	(49,835)	(19,269)	(524)
Interest income	873	2,842	10
Loss before income taxes	(138,587)	(46,344)	(24,197)
Income tax provision		0	0
Net loss	(138,696)	(46,344)	(24,197)
Dividends on preferred stock	(128)	(128)	(168)
Net loss applicable to common stockholders	$ (138,824)	$ (46,472)	$ (24,365)
Weighted average common shares outstanding, basic (shares)	32,882	30,981	28,221
Weighted average common shares outstanding, diluted (shares)	32,882	30,981	28,221
Loss per common share, basic (usd per share)	$ (4.22)	$ (1.50)	$ (0.86)
Loss per common share, diluted (usd per share)	$ (4.22)	$ (1.50)	$ (0.86)
Unrealized gain (loss) on Interest Rate Cap	$ (96)	$ 315	$ 0
Comprehensive loss	(138,600)	(46,659)	(24,197)
Gaming
Revenues:
Gross revenues	156,546	60,540	59,633
Operating costs and expenses:
Cost of goods and services sold	126,186	44,486	44,238
Racing
Revenues:
Gross revenues	5,335	5,820	5,957
Operating costs and expenses:
Cost of goods and services sold	8,049	5,229	5,174
Food and beverage
Revenues:
Gross revenues	20,056	2,560	3,571
Operating costs and expenses:
Cost of goods and services sold	25,453	4,221	4,732
Room
Revenues:
Gross revenues	7,345	0	0
Operating costs and expenses:
Cost of goods and services sold	8,161	0	0
Other
Revenues:
Gross revenues	5,563	973	1,140
Operating costs and expenses:
Other	$ 191	$ 259	$ 268

XML

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows provided by (used in) operating activities:
Net loss	$ (138,696,000)	$ (46,344,000)	$ (24,197,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	28,993,000	1,517,000	1,341,000
Amortization of gaming license	5,784,000	0	0
Amortization of debt issuance costs	4,645,000	2,091,000	105,000
Provision / (Recovery) for doubtful accounts	(21,000)	0	0
Non-cash interest expense	1,203,000	3,846,000	231,000
Loss on disposal of property and equipment	10,000	42,000	5,000
Stock-based compensation	7,748,000	2,755,000	2,722,000
Changes in operating assets and liabilities:
Inventories	(762,000)	0	0
Accounts receivable	(4,672,000)	(352,000)	235,000
Prepaid expenses and other current assets	(4,650,000)	785,000	506,000
Accounts payable	7,208,000	418,000	1,024,000
Accrued expenses and other current liabilities	26,512,000	938,000	4,839,000
Net cash used in operating activities	(66,698,000)	(34,304,000)	(13,189,000)
Cash flows provided by (used in) investing activities:
Purchase of property and equipment	(1,012,000)	(2,007,000)	(1,974,000)
Capitalized Development Projects costs	(204,524,000)	(300,277,000)	(157,305,000)
Refund/(payment) of cash collateral for deposit bond	35,000,000	(20,000,000)	(15,000,000)
License fee payment for the Casino	0	0	(51,000,000)
Net change in investments for Development Projects	94,450,000	(94,449,000)	0
Other	(3,000)	11,000	0
Net cash used in investing activities	(76,089,000)	(416,722,000)	(225,279,000)
Cash flows provided by (used in) financing activities:
Proceeds from related party long-term loan	30,000,000	0	0
Proceeds from related party equity contribution	0	32,000,000	0
Proceeds from issuance of common stock	0	0	286,003,000
Series F Preferred Stock issuance	11,880,000	0	0
Series E Preferred Stock and dividend redemption	0	0	(30,711,000)
Series B Preferred Stock dividend payment	(128,000)	(128,000)	(263,000)
Proceeds from exercise of stock options and option matching rights	50,000	16,000	54,000
Payment of debt issuance costs and Interest Rate Cap fees	(598,000)	(23,877,000)	(1,278,000)
Other payments	(968,000)	(275,000)	(88,000)
Net cash provided by financing activities	139,482,000	465,607,000	253,717,000
Net (decrease)/ increase in cash, cash equivalents and restricted cash	(3,305,000)	14,581,000	15,249,000
Cash, cash equivalents and restricted cash, beginning of year	53,055,000	38,474,000	23,225,000
Cash, cash equivalents and restricted cash, end of year	49,750,000	53,055,000	38,474,000
Supplemental disclosures of cash flow information:
Interest paid	43,121,000	38,755,000	407,000
Non-cash investing and financing activities:
Conversion of long-term loan, related party into equity	0	35,875,000	17,426,000
Project development costs included in accrued expenses	4,922,000	71,713,000	40,783,000
Term Loan Facility, Term B Loan [Member]
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt	0	441,871,000	0
Term Loan Facility, Term A Loan [Member]
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt	70,000,000	0	0
Revolving Credit Agreement [Member]
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt	15,000,000	0	0
Term Loan Facility, Term Loans [Member]
Cash flows provided by (used in) financing activities:
Principal payments on long-term debt	(8,625,000)	0	0
Equipment Loans [Member]
Cash flows provided by (used in) financing activities:
Principal payments on long-term debt	(10,711,000)	0	0
Bangkok Bank Loan [Member]
Cash flows provided by (used in) financing activities:
Proceeds from issuance of debt	4,000,000	16,000,000	0
bet365 [Member]
Cash flows provided by (used in) financing activities:
Proceeds from issuance of common stock	$ 29,582,000	$ 0	$ 0

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Organization and Nature of Business

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature of Business

Organization and Nature of Business

Basis for Presentation

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 is located at the approximately 1,700-acre site of a four-season destination resort ("Destination Resort") in Sullivan County, New York, approximately 90 miles from New York City. The Destination Resort in which Resorts World Catskills is located also includes a 101-room lifestyle hotel ("The Alder"), adjacent to the Casino. The Alder is owned and operated by Empire Resorts Real Estate II, LLC ("ERREII"), a wholly-owned subsidiary of Montreign Operating. Empire Resorts I, LLC ("ERREI"), which is a wholly-owned subsidiary of Montreign Operating, is developing a golf course (the "Golf Course" and, together with the Casino and The Alder, the "Development Projects") at the Destination Resort.

    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. The Company recently announced that VGM operations and food and beverage service at Monticello Casino and Raceway will cease on or about April 23, 2019. 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 its races to offsite pari-mutuel wagering facilities.

The gaming market in the northeastern United States is seasonal in nature. Peak gaming activities occur during the months of May through September. Although winter weather may affect our patrons' ability to reach our facilities, we expect that the availability of the overnight accommodations at the Casino and The Alder will mitigate the adverse affects of winter weather on our gaming operations.

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 flow from operations, borrowings from banks and proceeds from the issuance of debt and equity securities. The Company anticipates that its current cash and cash generated from operations, as well as the remaining net proceeds of the Term Loan Facility and equity financing available under the 2018 Kien Huat Preferred Stock Commitment Letter, which are discussed in Note I, will be sufficient to meet our working capital requirements, the expected costs of the Development Projects and our anticipated debt service requirements for the next 12 months. 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” of this Annual Report on Form 10‑K for a discussion of the risks related to our liquidity and capital structure.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Principles of consolidation

The consolidated financial statements include Empire’s accounts and their wholly-owned subsidiaries. All inter-company balances and transactions are eliminated in consolidation.

Estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from estimates.

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 years ended December 31, 2017 and 2016 have not been adjusted to reflect the impact of the ASC Topic 606. This approach does not significantly impact the comparability of the 2018, 2017 and 2016 amounts. The promotional allowances recorded in 2017 and 2016 are no longer presented separately in 2018 under ASC Topic 606. The adoption of the provisions of ASC 606 resulted in an increase of $54,000 to both “Accrued expenses and other current 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.

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 current liabilities” in our consolidated balance sheets.

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 are recognized as collected, due to uncertainty of receipt and timing of payments.

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 condensed consolidated statements of operations.

Complimentary food and beverage revenues, and complimentary room revenues for the years ended December 31, 2018 and 2017, respectively, were as follows:

	Year ended December 31,
	2018	2017
	(in thousands)
Complimentary food and beverage revenues	$10,837	$1,000
Complimentary room revenues	3,455	—

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 deferred revenue liability under ASC 606 was approximately $2.1 million at December 31, 2018. The Company's liability for its loyalty point performance obligations was $1.5 million at December 31, 2017. Loyalty points are generally earned and redeemed continuously over time.    

The retail value amounts included in promotional allowances for the years ended December 31, 2017 and 2016 were as follows:

	Year ended December 31,
	2017	2016
	(in thousands)
Food and beverage	$1,000	$1,486
Non-subsidized free play	2,718	978
Players Club awards	324	383
Total retail value of promotional allowances	$4,042	$2,847

The estimated cost of providing complimentary food, beverages and other items for the years ended December 31, 2017, and 2016 were as follows:

	Year ended December 31,
	2017	2016
	(in thousands)
Food and beverage	$1,750	$2,080
Non-subsidized free play	1,603	577
Players Club awards	324	383
Total cost of promotional allowances	$3,677	$3,040

Cash and cash equivalents

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.

Restricted cash and cash equivalents

The Company has several types of restricted cash accounts. These restrictions are in accordance with the NYSGC regulations. In addition, at December 31, 2018, the Company had restricted cash and cash equivalents of $21 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:

	December 31, 2018	December 31, 2017	December 31, 2016
	(in thousands)
Cash and cash equivalents	$28,338	$10,380	$11,012
Restricted cash	373	693	1,078
Restricted cash and cash equivalents for Development Projects	21,039	41,982	26,384
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$49,750	$53,055	$38,474

The Company has three types of restricted cash accounts.

Approximately $223,000 of cash is held in reserve in accordance with NYSGC regulations as of December 31, 2018 as listed below. The Company granted the NYSGC a security interest in the segregated cash account used to deposit NYSGC’s share of net win in accordance with the NYSGC Rules and Regulations. Under New York State Racing, Pari-Mutuel Wagering and Breeding Law, MRMI is obliged to withhold a certain percentage of certain types of racing and pari-mutuel wagers towards the establishment of a pool of money, the use of which is restricted to the funding of approved capital improvements. Periodically during the year, MRMI petitions the NYSGC to certify that the noted expenditures are eligible for reimbursement from the capital improvement fund. The balance in this account was approximately $18,000 and $25,000 at December 31, 2018 and 2017, respectively. In April 2005, the New York law governing VGM operations was modified to provide an increase in the revenues retained by the VGM operator. A portion of that increase was designated as a reimbursement of marketing expenses incurred by the VGM operator. The amount of revenues directed toward this reimbursement is deposited in a bank account under the control of the NYSGC and the VGM operator. The funds are transferred from this account to the VGM operator upon the approval by NYSGC officials of the reimbursement requests submitted by the VGM operator. The balance in this account was approximately $205,000 and $343,000 at December 31, 2018 and 2017, respectively.

In addition to the NYSGC restricted cash balances listed above, the Company established an account to segregate amounts collected and payable to Monticello Harness Horsemen’s Association (the “MHHA”) and pursuant to its contract. The balance in this account was approximately $150,000 and $324,000 at December 31, 2018 and 2017, respectively.

Restricted cash, cash equivalents and investments for Development Projects

Restricted cash and cash equivalents for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At December 31, 2018, restricted cash and cash equivalents for Development Projects of $21.0 million was comprised entirely of cash and cash equivalent balances. At December 31, 2017, restricted cash, cash equivalents and investments for Development Projects balance of $136.4 millionwas comprised of cash balances of approximately $11.2 million, cash equivalents of approximately $30.7 million and short-term investments maturing within one year of approximately $94.5 million. At December 31, 2017, short-term marketable securities 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 marketable securities 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 collectability 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 collectability. 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 $150,000 and $171,000, as of December 31, 2018 and 2017, respectively.

Property and equipment

Property and equipment is stated at cost less accumulated depreciation. The Company provides for depreciation on property and equipment used by applying the straight-line method over the following estimated useful lives:

Assets	Estimated Useful Lives
Vehicles	5-10 years
Furniture, fixtures and equipment	5-10 years
Land improvements	5-20 years
Building improvements	5-40 years
Buildings	40 years

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 ceased for the Casino when it was substantially complete. Capitalization will cease for the other Development Projects substantially complete or if development activity is suspended for an extended period of time.

The Company capitalized $12.3 million and $29.1 million of interest charges for the year ended December 31, 2018 and 2017, respectively. The Company did not recognize any capitalized interest charges for the fiscal year ended December 31, 2016.

Debt issuance costs

Debt issuance costs are amortized using the effective interest method over the term of the related debt. The amortization is included within interest expense and is included as a component of the capitalized interest costs.

Impairment of long-lived assets and other financial assets

The Company periodically reviews the carrying value of its long-lived assets in relation to historical results, as well as management’s best estimate of future trends, events and overall business climate. If such reviews indicate an issue as to whether the carrying value of such assets may not be recoverable, the Company will then estimate the future cash flows generated by such assets (undiscounted and without interest charges). If such future cash flows are insufficient to recover the carrying amount of the assets, then impairment is triggered and the carrying value of any impaired assets would then be reduced to fair value.

The Company also reviews its financial assets (i.e. non-derivative financial assets) for impairment, if it becomes probable that the commitment will not result in the receipt of proceeds from the issuance of securities.

Other long-term liabilities

The difference between our cash payments and straight-line rent on our land leases of $8.1 million and $8.3 million at December 31, 2018 and 2017, respectively, is included in other long-term liabilities. In addition, the Company has accrued a liability-classified guaranty of approximately $2.3 million related to compensation due the Horsemen under the MHHA Agreement. At December 31, 2018, the Company has also recorded a derivative liability in the form of a put option of approximately $0.9 million, related to the bet365 equity transaction.

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 years ended December 31, 2018, 2017 and 2016 were the same.

The following table shows the approximate number of common stock equivalents outstanding at December 31, 2018, 2017 and 2016 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 years ended December 31, 2018, 2017 and 2016, because their inclusion would have been anti-dilutive:

	Outstanding at December 31,
	2018	2017	2016
Unvested Restricted stock	37,000	139,000	216,000
Warrants	193,000	133,000	133,000
Restricted stock units ("RSUs")	196,000	73,000	—
Option Matching Rights	—	3,000	21,000
Options	—	13,000	34,000
Total	426,000	361,000	404,000

On August 19, 2009, the Company entered into an investment agreement (the "2009 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 2009 Investment Agreement, or the first 200,000 options or warrants granted to directors or officers as of the final closing date under the 2009 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.” On January 24, 2018, Kien Huat exercised its option to purchase 1,666 shares of common stock due to an option exercise. 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 $0.7 million 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 $143,000 and $251,000 at December 31, 2018 and 2017, respectively, and is presented at fair value as "Other Assets" on the 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 December 31, 2018 and 2017, accumulated other comprehensive loss of $0.2 million and $0.3 million, respectively consisted solely of the fair value adjustment relating to the Interest Rate Cap.

Derivative Liability and Asset

The Company’s Collaboration Agreement with bet365 (see Note I) along with the related Common Stock Purchase Agreement contained an initial put option that met the definition of a derivative instrument and a freestanding contingent forward instrument. The Company classified the initial put option as a long-term liability on its consolidated balance sheet. Also, because, bet365 has or will be obligated to purchase shares of the Company’s common stock at a strike price less than the expected equity value once bet365’s Online Sportsbook Services is approved in New York State, we have classified the freestanding contingent forward instrument as a long-term asset in the Consolidated Balance Sheet. The derivative liability and the contingent forward asset were initially recorded at fair value upon the effective date of the Collaboration Agreement and will be subsequently remeasured to fair value at each reporting date. Changes in the fair value of the derivative liability and long-term asset will be recognized as a component of "other income (expense), net" in the consolidated statement of operations.

Fair Value of Financial Assets and Liabilities

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, long-term debt, contingent forward contracts, derivative instruments,and a guaranty liability. 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:

	December 31, 2018		December 31, 2017
	Carrying Amount	Fair Value	Carrying Amount		Fair Value	Level of Fair Value Hierarchy
Assets:	(in thousands)
Cash and cash equivalents	$28,338	$28,338	$10,380		$10,380	Level 1
Restricted cash	373	373	693		693	Level 1
Interest Rate Cap	143	143	251		251	Level 2
Restricted cash, cash equivalents and investments for Development Projects:
Cash and cash equivalents	21,039	21,039	41,982		41,982	Level 1
Short-term investments	—	—	94,449		94,209	Level 2
Other assets:
Non-derivative financial asset - Series F Preferred Stock, redeemable	31,122	31,122	—		—	Level 2
Contingent forward contract - bet365	1,865	1,865	—		—	Level 3
Liabilities:
Term B Loan, net of discount	440,803	440,660	443,161		449,749	Level 2
Term A Loan	64,750	64,750	—		—	Level 2
Bangkok Bank Loan	20,000	20,000	16,000		16,000	Level 3
Revolving Credit Facility	15,000	15,000	—		—	Level 2
Long-term loan, related party, net of debt issuance costs	30,954	30,954	—		—	Level 3
Equipment loans	20,384	20,384	31,095		31,095	Level 3
Guaranty liability - MHHA agreement	2,300	2,300	—	—		Level 2
Derivative liability - bet365	879	879	—		—	Level 3

The fair value of cash and cash equivalents and restricted cash are based on the fair values of identical assets in active markets. The Company used a third party to complete the valuation of its Interest Rate Cap, which is considered a Level 2 asset and is measured at fair value on a recurring basis using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows for the Interest Rate Cap. At December 31, 2017, the estimated fair value of the Company's investments in marketable securities was $94.2 million and the carrying value was approximately $94.5 million. At December 31, 2018 and 2017, the estimated fair value of the Company's outstanding Term B Loan was approximately $440.7 million and $449.7 million and the carrying value before unamortized discounts was approximately $446.6 million and $450.0 million, respectively. The fair value of the Bangkok Bank Loan, the related party loan and the equipment loans approximate carrying value, due to the short-term nature of these agreements. The fair value of the non-derivative financial assets - Series F Preferred Stock, redeemable was valued using a Black Scholes put option model.

Valuation of Derivative Liability and Contingent Forward Contract

The fair value of the derivative liabilities and asset recognized in connection with the Company’s Collaboration Agreement with bet365 (see Note I) was determined based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The derivative liability for the initial put option was recorded in "Other long-term liabilities" on the consolidated balance sheet. The contingent forward contract was recorded net of the contingent put option in "Other assets" on the consolidated balance sheet. The fair value of the derivative liabilities and asset was determined using a Monte Carlo simulation valuation approach with the following assumptions:

	Derivative Liability - bet365	Contingent forward contract - bet365
Equity value	$29.48	$29.48
Strike price	$20.00	$20.00
Expected term	3.46 years	3.13 years
Volatility	61%	62%
Risk-free rate	2.9%	2.9%
Dividend yield	—%	—%

The following table provides a roll forward of the aggregate fair values of the Company’s derivative liabilities and asset, for which fair value is determined using Level 3 inputs (in thousands):

	Derivative Liability - bet365	Contingent forward contract -bet365
Balance as of December 31, 2017	$0	$0
Initial fair value of derivative (liability) asset in connection with Collaboration Agreement	$(879)	$1,865
Change in fair value	$0	$0
Balance as of December 31, 2018	$(879)	$1,865

Valuation of Non-Derivative Liability

The fair value of the guaranty liability recognized in connection with the Company’s agreement with MHHA (see Note J) was determined based on significant inputs that are observable and quoted prices in active markets for similar liabilities, which represents a Level 2 measurement within the fair value hierarchy. The fair value of the derivative liability was determined using a Black Scholes valuation approach with the following assumptions:

	Guaranty Liability - MHHA Horsemen
Equity value	$10.13
Strike price	$27.50
Expected term	6.11 years
Volatility	68%
Risk-free rate	2.6%
Dividend yield	—%

During the years ended December 31, 2018, 2017, and 2016, there were no transfers between Level 1, Level 2 and Level 3.

Advertising

The Company records in selling, general and administrative expense the costs of general advertising, promotion and marketing programs at the time those costs are incurred. Advertising expense was approximately $11.0 million, $1.4 million and $1.1 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Stock-based compensation

The cost of all share-based awards to employees, including grants of restricted stock and restricted stock units, is recognized in the financial statements based on the fair value of the awards at grant date. 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 December 31, 2018, there was approximately $2.2 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 2.5 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.

The Company paid $51 million to the NYSGC on February 25, 2016 for its Gaming Facility License. The term of the Gaming Facility License is 10 years and the amortization commenced on the date the Casino opened to the public in February 2018. Beginning in February 2018, the Company recognized amortization of $5.8 million on a straight line basis and will continue amortize approximately $6.3 million annually over the next seven years 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.

Segment Reporting

The Company maintains discrete financial information for each of its operating companies, which is used by the Chief Executive Officer (the "CEO") as the basis for allocating resources. Each company has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics as all of the companies provide similar resort services and shares similar processes for delivering services. Our companies have a high degree of similarity in the workforces and target similar patron groups. Accordingly, based on these economic and operational similarities and the way the CEO monitors and makes decisions, the Company has concluded that its operating segments may be aggregated and that it has one reportable segment.

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"). "). This ASU will require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (“ROU”) 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 adopted the standard on January 1, 2019 and will apply the package of practical expedients available to it upon adoption.  The Company expects that the most significant impact on our consolidated balance sheets will be the recognition of ROU assets and lease liabilities for operating leases that exist at the date of adoption, with the most material of such leases being ground leases.

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

12 Months Ended

Dec. 31, 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 until December 31, 2017. Under this program, the Company received 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 at December 31, 2017. During the year ended December 31, 2018, the Company received refunds for real estate taxes paid of approximately $0.8 million for the years ended December 31, 2016 and 2017. The amounts of the unreceived real estate tax credits and state income tax receivables were included in prepaid expenses and other current assets on the accompanying consolidated balance sheet at December 31, 2018 and 2017, and were approximately $3.4 million and $0.8 million, respectively.

Prepaid supplies is comprised of $0.6 million of uniforms, $0.4 million of linens and $0.4 million of gaming chips. Included in prepaid gaming expenses are $0.6 million 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 December 31, 2018 and 2017:

	12/31/2018	12/31/2017
	(in thousands)
Receivable from New York State	$3,422	$814
Prepaid real estate taxes	284	443
Prepaid insurance	392	327
Prepaid advertising	23	—
Prepaid supplies	1,528	—
Prepaid gaming expenses	773	74
Prepaid maintenance contracts	657	476
Development escrow and refundable security deposit	572	780
Prepaid other	375	462
Total prepaid expenses and other current assets	$8,026	$3,376

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Property and Equipment

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and equipment are comprised of the following at December 31, 2018 and 2017:

	12/31/2018		12/31/2017
	(in thousands)
Land	$770		$770
Land improvements	2,382		1,759
Buildings	622,043		4,727
Building improvements	103,621		29,874
Furniture, fixtures and equipment	10,954		5,551
Construction in Progress	2,784		77
	742,554		42,758
Less: Accumulated depreciation	(44,875	)	(15,895	)
	$697,679		$26,863

The $699.8 million increase in gross 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 year ended December 31, 2018. Construction of the Casino and The Alder was substantially completed on January 1, 2019. At December 31, 2018, $5.7 million remains classified as capitalized Project Development costs reflecting the ongoing construction of the Golf Course Project and The Alder.

Depreciation expense was approximately $29.0 million, $1.5 million and $1.3 million for years ended December 31, 2018, 2017 and 2016, respectively.

The VGMs at MRMI 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

12 Months Ended

Dec. 31, 2018

Project Development Costs [Abstract]

Development Projects Costs

Development Projects Costs

Capitalized Project Development Costs

At December 31, 2018 and 2017, total Capitalized Project Development costs incurred were approximately $5.7 million and $566.8 million, respectively. Total Capitalized Development Project costs at December 31, 2018 consisted of $4.2 million of construction costs, site development, contractor insurance, general conditions, architectural fees, construction manager fees, and approximately $1.5 million of professional service fees such as legal fees 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, construction manager fees, and approximately $6.6 million of professional service fees such legal and accounting fees and is reflected on the balance sheet as Capitalized Development Project costs. The full opening of the Casino and The Alder occurred on January 1, 2019.

In September 2018, ERREI entered into a standard contractor agreement for 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.

In fiscal 2018, total Development Projects costs incurred were approximately $150.2 million, of which $137.6 million was capitalized and $12.6 million was expensed. Development Project expenses consisted of $10.4 million of land lease costs, $0.4 million of real estate taxes, $0.5 million of insurance expense, $0.3 million in consultants and other professional service fees, $0.2 million in legal fees and $1.2 million of pre-opening expenses, including salary and related benefits as well as marketing expenses.

In 2017, total Development Projects costs incurred were approximately $392.2 million, of which $370.7 million was capitalized and $21.6 million was expensed. Development Project costs consisted of $10.7 million of land lease costs and rents, $4.9 million of salary and related benefits, $2.0 million of bank charges, $0.9 million of marketing expenses, $0.6 million of real estate taxes, $0.6 million of insurance expense, $0.6 million in consultants and other professional service fees, $0.3 million in legal fees and approximately $0.5 million of pre-opening expenses, including travel, relocation, recruiting and other start-up costs.

In 2016, Development Project costs consisted of $10.4 million of land lease costs and rents, $0.4 million of real estate taxes, $0.5 million of insurance expense, $0.3 million in consultants and other professional service fees, $0.2 million in legal fees and approximately $1.2 million of pre-opening expenses, including salary and related benefits, as well as marketing expenses.

Cash Collateral for Deposit Bond

In February 2016 and June 2017, the Company deposited $15 million and $20 million, respectively, in performance bonds to guaranty 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 which would trigger the return of the deposited funds to the Company. On January 4, 2018, the NYSGC confirmed that the Company met such minimum capital investment criteria as required by the Gaming Act and $35 million was returned to the Company and deposited into a lender-controlled account for use towards the expenses of the Development Projects.

Restricted Cash, Cash Equivalents and Investments for Development Projects

At December 31, 2018, $20.1 million of restricted cash and cash equivalents for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At December 31, 2017, $136.4 million of restricted cash, cash equivalents and investments for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. This consisted of cash and cash equivalents totaling $41.9 million and short-term marketable securities totaling $94.5 million, which were comprised of commercial paper and U. S. Treasury Notes with maturities of less than one year.

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Accrued Expenses and Other Current Liabilities

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Accrued Development Projects costs at December 31, 2018 and 2017 were $4.9 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 were used to pay the accrued Development Project costs.

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

	12/31/2018	12/31/2017
	(in thousands)
Liability for horseracing purses	$868	$886
Accrued payroll	8,142	1,715
Accrued marketing	5,298	52
Accrued interest expense	5,033	14
Accrued redeemable points and deferred revenues	2,202	271
Liability to NYSGC	2,816	1,507
Liability for local progressive jackpot	2,560	1,110
Accrued premium game leases	1,288	—
Accrued professional fees	2,337	744
Federal tax withholding payable	561	81
Accrued other	2,573	940
Total accrued expenses and other current liabilities	$33,678	$7,320

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Long-Term Debt

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Long-term Debt

Long-term debt, other than related party debt, consisted of the following at December 31, 2018 and 2017:

	12/31/2018		12/31/2017
	(in thousands)
Term B Loan (net of unamortized discount)	$440,803		$443,161
Term A Loan	64,750		—
Bangkok Bank Loan	20,000		16,000
Revolving Credit Facility	15,000		—
Equipment loans	20,384		31,095
Total long-term debt	560,937		490,256
Debt issuance costs	(17,240	)	(20,520	)
Total long-term debt, net	543,697		469,736
Less: Current portion of long-term debt	(48,004	)	(14,588	)
Long-term debt, net of current portion	$495,693		$455,148

Term Loan Agreement

On January 24, 2017 (the "Closing Date"), Montreign Operating entered into the Building Term Loan Agreement (the “Original 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. On May 26, 2017, the parties entered into the first amendment to the Term Loan Agreement and certain ancillary agreements (the “Amended Term Loan Agreement” and, together with the Original Term Loan Agreement, the “Term Loan Agreement”). The Amended Term Loan Agreement increased the aggregate principal amount of the Term B Loan issued under the Original Term Loan Agreement by $35 million on substantially the same terms and conditions as the Original Term Loan Agreement, which terms are discussed below. In the aggregate, the Term Loan Agreement provided Montreign Operating with loans in principal amount of $520 million (the “Term Loan Facility”). All of the borrowings under the Term Loan Agreement were used to fund the costs of the Development Projects.

The Term Loan Facility consists of $70 million of Term A loans (the “Term A Loan”) and $450 million of Term B loans (the “Term B Loan”). The Term B Loan made pursuant to the Original Term Loan Agreement was priced at 98.12% of the principal amount and borrowed in full on January 24, 2017. The incremental $35 million principal amount of the Term B Loan made pursuant to the Amended Term Loan Agreement was priced at 99.75% of the principal amount and borrowed in full on May 26, 2017. The unamortized discount that has been netted against the outstanding Term B Loan balance was $5.8 million and $6.8 million at December 31, 2018 and 2017, respectively. In addition, the Term A Loan is fully drawn in accordance with the Term Loan Agreement, which required Montreign Operating 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.

As required by the Term Loan Agreement, proceeds of the Term Loan Facility were used to pay fees and expenses related to the financing and fund various lender-controlled accounts. The Company further funded these lender-controlled accounts with approximately $9.9 million in December 2017 pursuant to the Term Loan Agreement from the proceeds of the Bangkok Bank Loan, which is discussed below. On March 1, 2018 and March 23, 2018, the Company contributed approximately $2.7 million and $0.9 million, respectively, to an interest reserve fund under the Term Loan Agreement. These contributions reflect the additional interest to be paid on the Term Loan Facility as a result of the Company's deferral of the completion of 15 VIP suites at the Casino from March 1, 2018 to March 23, 2018 and a further deferral to March 30, 2018. Additionally, in May 2018, the Company contributed approximately $0.5 million to the lender controlled accounts as a result of the payment for additional construction change orders. All funds held in these lender-controlled accounts are used to pay the expenses of the Development Projects. In order to access the funds held in these lender-controlled accounts, Montreign Operating was required to satisfy the applicable disbursement conditions set forth in the Term Loan Agreement and ancillary agreements, such as providing evidence that the withdrawn funds are used for permitted purposes in connection with the Development Projects.

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. Interest accrues on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a LIBOR floor of 1%) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. At December 31, 2018, the interest rate on the Term A Loan was 7.68% and the interest rate on the Term B Loan was 10.96%. 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 2.5% per annum for the period from the Closing Date through March 24, 2018 and 5.0% per annum thereafter until July 24, 2018, when the Term A Loan was drawn in full.

The Company is making principal payments under the Term A Loan and the Term B Loan at the end of each calendar quarter, which repayment began 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, through the quarter ending March 31, 2019, and quarterly installments of approximately $2.6 million thereafter. The Company repaid approximately $5.3 million and $3.4 million on the Term A Loan and Term B Loan, respectively, during the year ended December 31, 2018. As of December 31, 2018 and 2017, $440.8 million and $443.2 million principal was outstanding (net of original issue discount) under the Term B Loan, respectively, and $64.8 million and no principal amount was outstanding under the Term A Loan, respectively.

In the event that the Term B Loan is prepaid or repaid in whole or in part for any reason other than as a result of scheduled amortization and certain other exceptions, Montreign Operating is required to pay prepayment premiums based on a make-whole provision if the prepayment occurs between the Closing Date (but excluding) and the 30th-month anniversary following the Closing Date, a 2% premium if the prepayment occurs between the 30th Month and (but excluding) the 42nd-month anniversary of the Closing Date and a 1% premium if the prepayment occurs between the 42nd Month and (but excluding) the 54th-month anniversary of the Closing Date.

The Term Loan Agreement contains representations and warranties, customary events of default, and affirmative, negative and financial covenants. Mandatory prepayments of the Term Loan Facility will be required upon the occurrence of certain events, including sales of certain assets and casualty events. In addition, the Term Loan Agreement restricts the Project Parties (as defined below) from incurring additional indebtedness except for, among other things, obligations pursuant to hedging agreements required under the Term Loan Agreement, capital lease obligations and purchase money indebtedness (including FF&E financing) in an amount not exceeding $40 million, subordinated indebtedness so long as the proceeds are applied pursuant to the terms of the Term Loan Agreement and other indebtedness not exceeding $10 million. Also, the Project Parties may not make any dividend or other distribution, redeem or otherwise acquire any equity securities or subordinated indebtedness. Moreover, the Project Parties are restricted from entering into advisory, management or consulting agreements with an affiliate of any Project Party, 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.

Additional affirmative, negative and financial covenants under the Term Loan Agreement include that the Company maintain compliance with a maximum first lien leverage ratio not to exceed 5.00:1.00, a minimum interest coverage ratio not to fall below 2.00:1.00 and a consolidated capital expenditure covenant not to exceed $10.5 million of eligible expenses in any calendar year. In addition, the Company is allowed to add back pro forma EBITDA in the amount of $108.4 million, $77.5 million and $39.4 million in each of the first three testing quarters, respectively. 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 (June 30, 2019), which is the date on which at least 95% of all rooms in the hotel are open to the public. This occurred on January 1, 2019. As of December 31, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

The Term Loan Facility is guaranteed by Montreign Operating, ERREI and ERREII (together, 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.

Obligations under the Term 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, breach of the affirmative or negative covenants, revocation of a gaming license for seven consecutive business days, and a Change in Control (as such term is defined in the Term Loan Agreement) of Montreign Operating.

Revolving Credit Agreement

On January 24, 2017, Montreign Operating entered into a Revolving Credit Agreement (as amended, the “Revolving Credit Agreement”) among Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent. The Revolving Credit Agreement 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) (the “Revolving Credit Facility”), the proceeds of which may be used for working capital needs, capital expenditures and other general corporate purposes following the opening of specified Casino amenities to the public. Concurrently with the Term Loan Amendment, on May 24, 2017, Montreign Operating amended the Revolving Credit Agreement to, among other things, permit Montreign Operating to increase the aggregate principal amount of the Term B Loan under the Term Loan Amendment. On December 7, 2017, Montreign Operating entered into a Second Amendment to the Revolving Credit Agreement (the "Second Revolving Credit Amendment"). The Second Revolving Credit Amendment enables Montreign Operating to borrow up to $15 million (but not obtain a letter of credit) under the Revolving Credit Facility with a narrowed scope of amenities at the opening of the Casino, subject to the receipt of NYSGC approval to open the Casino to the public. On February 5, 2018, Montreign Operating received a certificate from the NYSGC to commence gaming operations at the Casino. The Revolving Credit Facility will mature on January 24, 2022.

At December 31, 2018 and 2017, $15.0 million and $0, respectively, had been drawn down on the Revolving Credit Facility. More specifically, the Company drew $9.0 million on January 23, 2018, $4.0 million on February 9, 2018 and $2.0 million on June 29, 2018. 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 December 31, 2018, the interest rate on borrowings under the Revolving Credit Facility was 7.71%.

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, the incurrence of certain additional indebtedness, subject to certain exceptions and reinvestment rights. As of December 31, 2018, the Company was in compliance with all applicable covenant requirements under the Term Loan Facility.

Obligations under the Revolving Credit 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, breach of the affirmative or negative covenants, revocation of a gaming license for seven consecutive business days, and a Change in Control (as such term is defined in the Term Loan Agreement) of Montreign Operating.

Bangkok Bank Loan Agreement

On December 28, 2017, the Company entered into a Delayed Draw Term Loan Credit Agreement (the “Bangkok Bank Loan Agreement”), with Bangkok Bank PCL, New York Branch (“Bangkok Bank”), as lender, and MRMI, 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 “Bangkok Bank Loan”). The Bangkok Bank Loan Agreement 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 Company borrowed $16 million at the closing of the Bangkok Bank Loan. Of this amount, the Company contributed approximately $9.9 million to Montreign Operating pursuant to the terms of the Term Loan Agreement, as discussed above. On August 30, 2018, the Company borrowed $2 million and, on November 7, 2018, the Company borrowed the remaining $2 million under the Bank of Bangkok Loan. At December 31, 2018, the Bank of Bangkok loan was fully drawn.

The Bangkok Bank Loan matures on December 28, 2019. The maturity of the Bangkok Bank Loan may be extended in the sole discretion of Bangkok Bank for additional one-year periods with other terms and conditions to be agreed by the Company and Bangkok Bank. Any such extension of the Bangkok Bank Loan maturity will be subject to a 1% extension fee.

Interest accrues on outstanding borrowings under the Bangkok Bank Loan Agreement at a rate equal to LIBOR plus 6.25%, or an alternate base rate plus 5.25% per annum. In addition, the Company paid 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 was paid on the last business day of each quarter beginning on March 31, 2018. The Bangkok Bank Loan may be prepaid in whole or in part without premium or penalty, subject to the payment of a 2.0% prepayment fee. At December 31, 2018, the interest rate on borrowings under the Bangkok Bank Loan was 8.77%.

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 covenants, negative covenants 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. The Company is in compliance with the covenant terms as of December 31, 2018.

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 December 31, 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 amount financed was $31.1 million and the terms of these agreements run between six and 36 months. The balances outstanding at December 31, 2018 and 2017, was $20.4 million and $31.1 million, respectively. The stated interest rates for these loans are between zero and eight 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.

The following table lists the annual principal repayments due for the Company's long term debt, other than Related Party Debt, as of December 31, 2018:

Year ending December 31,	Totals
	(in thousands)
2019	$48,004
2020	20,690
2021	15,815
2022	53,625
2023	428,625
Totals	$566,759

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Long-Term Loans, Related Party

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Long-Term Loans, Related Party

Long-Term Loans, Related Party

Subsidiary Revolving Loan Agreement

On November 30, 2018, Empire entered into a Revolving Loan Agreement (the “Sub Revolving Loan Agreement”) with Montreign Operating. The Sub Revolving Loan Agreement provides for loans (in the aggregate, the “Sub Revolving Loan”) to Montreign Operating in an aggregate principal amount of up to $10 million (the “Subsidiary Loan Amount”). Interest will accrue on outstanding borrowings at a rate of 7% per annum and will be payable beginning on the last day of each calendar quarter beginning on March 31, 2019. Of that interest, 1% will be payable in cash and 6% will accrue and remain outstanding until paid in full (and continue to bear interest). The Sub Revolving Loan, together with interest accrued and yet unpaid, will be due and payable on April 25, 2023.

As a condition to each advance under the Sub Revolving Loan, (i) Montreign Operating is required to deliver a written request for an advance three days before the date on which the advance is made; (ii) after giving effect to the advance, the principal amount outstanding will not exceed the Loan Amount, and (iii) no event of default will have occurred and be continuing, or would occur after giving effect to the advance, on the date of the advance request.

The Sub Revolving Loan Agreement contains customary representations and warranties and affirmative covenants, including representations, warranties and covenants on organization, authorization, enforceability and maintenance of existence. The Sub Revolving Loan is secured by a security interest in all personal property of Montreign Operating subject to the limitations and exceptions described in the Sub Revolving Loan Agreement. Obligations under the Sub Revolving Loan Agreement may be accelerated upon certain customary events of default, including, among others: nonpayment of principal, interest or fees; breach of any term, covenant, or agreement under the Sub Revolving Loan Agreement; a bankruptcy proceeding involving Montreign, whether voluntary or involuntary; or the acceleration of any indebtedness in excess of $10 million.

Montreign Operating agreed to indemnify Empire and its officers, partners, members, directors, employees and agents (together, the “Indemnified Parties” and each an “Indemnified Party”) against any and all damages arising out of any negligence or tortious acts or omissions by Montreign Operating or its agents, contractors, servants or employees, any failure by Montreign to comply with the terms of the Sub Revolving Loan Agreement, and any failure by Montreign Operating to comply with the law, except to the extent any such damages result from the gross negligence or willful misconduct of an Indemnified Party.

On November 30, 2018 and December 7, 2018, the Company advanced an aggregate of $10 million to Montreign Operating pursuant to a request for advance under the Sub Revolving Loan.

Loan Arrangements with Kien Huat Realty III Limited

Kien Huat Subordinate Loan Agreement

On June 25, 2018, Kien Huat and Empire 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 Operating 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.

On July 5, 2018, the Company borrowed $5 million, and on July 31, 2018, the Company borrowed $5 million. The Company also borrowed an additional $10 million on each of September 11, 2018 and 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. At December 31, 2018, $30 million was outstanding under the Kien Huat Subordinate Loan.

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

Concurrently with and as a condition to the closing of the Bangkok Bank 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 (the “Kien Huat Backstop Loan”). Any amounts borrowed under the Kien Huat Backstop Loan 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 (the “Backstop Maturity Date”). As of December 31, 2018, no amounts had been borrowed under the Kien Huat Backstop Loan.

The Kien Huat Backstop Loan bears interest at a rate of 12% per annum. Prior to the Backstop Maturity Date, interest on any principal amount outstanding under the Kien Huat Backstop Loan will accrue and be added to the outstanding principal of the Kien Huat Backstop Loan on the first business day of each calendar month beginning on January 1, 2018 and will thereafter be deemed to be part of the principal indebtedness. The Kien Huat Backstop Loan, including all interest and any other amounts due under the Kien Huat Backstop Loan, will be payable in cash on the Backstop Maturity Date. Kien Huat was paid a commitment fee of $200,000 on December 28, 2017.

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 the Kien Huat Backstop Loan 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.

Kien Huat Montreign Loan Agreement and Kien Huat Note Exchange Agreement

On January 24, 2017, Montreign Holding entered into a loan agreement (the "Kien Huat Montreign Loan Agreement"). Pursuant to the Kien Huat Montreign Loan Agreement, Montreign Holding obtained from Kien Huat a loan in the principal amount of $32.3 million (the "Kien Huat Montreign Loan"). The net proceeds of the Kien Huat Montreign Loan were used as a capital contribution to Montreign Operating for use towards the expenses of the Development Projects. The obligations of Montreign Holding under the Kien Huat Montreign Loan Agreement were secured by a pledge of all the membership interests in Montreign Holding.

Concurrently with and as a condition to the closing of the Bangkok Bank Loan Agreement, on December 28, 2017, Empire, Montreign Holding, and Kien Huat entered into a Note Exchange Agreement (the “Kien Huat Note Exchange Agreement”). The Kien Huat Note Exchange Agreement provides for the issuance of 1,379,873 shares of common stock Kien Huat in full satisfaction of the Kien Huat Montreign Loan. In connection with the satisfaction in full of the Kien Huat Montreign Loan pursuant to the Kien Huat Note Exchange Agreement, Empire's pledge of its membership interests in Montreign Holding was released.

Kien Huat Construction Loan Agreement

On October 13, 2016, Montreign Operating and Kien Huat entered into a loan agreement (the "Kien Huat Construction Loan Agreement"). Pursuant to the Kien Huat Construction Loan Agreement, Kien Huat agreed to make available to Montreign Operating up to an aggregate of $50 million of loans to pay the expenses of the Casino while the debt financing for the Development Projects was being finalized. In connection with the closing of the Term Loan Facility and the Kien Huat Montreign Loan, on January 24, 2017, the Kien Huat Construction Loan Agreement expired pursuant to its terms without being utilized by Montreign Operating. Montreign Operating paid Kien Huat a commitment fee of $500,000upon execution of the Kien Huat Construction Loan. The commitment fee was capitalized and was included in "Other Assets" at December 31, 2016. It was charged to "Interest Expense" on the Consolidated Statement of Operations on January 24, 2017, upon the issuance of the Kien Huat Montreign Loan Agreement.     

Conversion of 2010 Kien Huat Note

On November 17, 2010, Empire entered into a loan agreement (the "2010 Kien Huat Loan Agreement") with Kien Huat pursuant to which Empire issued a convertible promissory note (the "2010 Kien Huat Note") in the original principal amount of $35 million, of which $17.4 million was outstanding as of December 31, 2015. On February 17, 2016, upon consummation of the January 2016 Rights Offering (as defined and discussed in Note I), the 2010 Kien Huat Note was converted into 1,332,058 shares of common stock in accordance with the terms of the 2010 Kien Huat Loan Agreement.

The Company recognized approximately $0.2 million in interest expense associated with the 2010 Kien Huat Note during the year ended December 31, 2016.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2018

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Authorized Capital

On November 1, 2016, Empire filed the Second Amended and Restated Certificate of Incorporation (the "Restated Charter”) with the Secretary of State of the State of Delaware. Pursuant to Restated Charter, Empire’s authorized capital stock consists of 155 million shares, of which 150 million shares are common stock and five million shares are preferred stock.

Common Stock

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.

January 2016 Rights Offering

On January 4, 2016, we commenced a rights offering (the "January 2016 Rights Offering") of transferable subscription rights to holders of record of our common stock and Series B Preferred Stock as of January 4, 2016 to purchase up to 20,138,888 shares of our common stock. In connection with the January 2016 Rights Offering, on December 31, 2015, the Company and Kien Huat entered into a standby purchase agreement (the "January 2016 Standby Purchase Agreement"). Pursuant to the January 2016 Standby Purchase Agreement, Kien Huat agreed to (i) exercise its basic subscription rights to acquire approximately $30 million of our common stock within 10 days of the commencement of the January 2016 Rights Offering with a closing proximate thereto and (ii) to exercise the remainder of its basic subscription rights prior to the expiration date of the January 2016 Rights Offering. In addition, Kien Huat agreed it would exercise all rights not otherwise exercised by the other holders in the January 2016 Rights Offering in an aggregate amount not to exceed $290 million.

The January 2016 Rights Offering closed on February 17, 2016. The Company issued a total of 20,138,888 shares of common stock for aggregate gross proceeds of approximately $290 million. This includes 176,086shares issued to holders upon exercise of their basic subscription and over-subscription rights and 13,136,817 shares issued to Kien Huat upon exercise of its basic subscription rights. Kien Huat also acquired the remaining 6,825,985 shares not sold in the January 2016 Rights Offering pursuant to the January 2016 Standby Purchase Agreement. The net proceeds of the January 2016 Rights Offering were approximately $286.0 million, which were used (i) to pay the pre-opening expenses relating to the construction of the Casino, (ii) to redeem the outstanding shares of the Series E Preferred Stock in accordance with the terms of the Settlement Agreement on March 7, 2016 and (iii) for the working capital needs of the Company. Pursuant to the January 2016 Standby Purchase Agreement, we paid Kien Huat a commitment fee of $1.5 million which is equal to 0.5% of the maximum amount of the January 2016 Rights Offering, and reimbursed Kien Huat for expenses in the amount of $50,000.

Bet365 Common Stock Purchase Agreement

On November 14, 2018, the Company entered into a sportsbook and digital gaming collaboration agreement (the “Collaboration Agreement”) with Hillside (New York) LLC, an affiliate of bet365 Group Limited (“bet365”). In connection with entering into the Collaboration Agreement, Hillside (New Media Holdings) Limited, an affiliate of bet365 ("bet365 Investor"), and the Company entered into a common stock purchase agreement (the “bet365 Common Stock Purchase Agreement”) pursuant to which bet365 Investor agreed to purchase up to 2.5 million shares of common stock of the Company at a purchase price of $20.00 per share, for an aggregate investment of $50 million.

Upon execution of the bet365 Common Stock Purchase Agreement, the bet365 Investor purchased 1,685,759 shares of common stock. The offer and sale of these shares was made pursuant to a shelf registration statement on Form S-3 (File No. 333-214119), which became effective on November 17, 2016, pursuant to a base prospectus dated as of November 17, 2016 contained in such registration statement and a prospectus supplement filed with the Securities and Exchange Commission on November 14, 2018. The Company received net proceeds of $29.6 million from the offering.

Pursuant to the bet 365 Common Stock Purchase Agreement, the bet365 Investor will be obligated to purchase the remaining 814,241 shares of common stock at $20.00 per share so long as the following closing conditions are met: (i) 30 days have passed following the receipt of approval from the NYSGC of bet365 Investor’s ownership of the Shares and the enactment of laws by New York State allowing the offering of the bet365 Online Sportsbook Services; (ii) the representations and warranties of the Company are true and correct in all material respects and the Company has complied with its obligations under the bet365 Common Stock Purchase Agreement; (iii) the Collaboration Agreement is in full force and effect and there is no material breach of the Collaboration Agreement by the Company outstanding; (iv) the common stock of the Company continues to be listed on The Nasdaq Stock Market; (v) the Company continues to own 100% of the equity interests in the Casino; and (vi) the Gaming Facility License is still valid.

After all gaming taxes have been paid and the parties have recouped their costs and expenses, bet365 may receive a distribution (the “Preferred Distribution”) equal to 50% of the positive difference, if any (the “delta”), between $20 and the value of the Company’s common stock measured on a given date (such date, the “Trigger Date”), multiplied by the number of shares of common stock then held by bet365 Investor. The Trigger Date is 30 days after the Company’s first filing of an annual or quarterly report with the Securities and Exchange Commission after bet365 recoups its costs incurred pursuant to the Collaboration Agreement. The delta will be the positive difference between $20 and the 30-day volume-weighted average price of the Company’s common stock on the Trigger Date. If the Company is no longer a reporting company, or if the Company’s common stock is not listed on a national securities exchange, the delta will be the positive difference between $20 and the fair market value of the Company’s common stock as determined by an investment bank retained by the parties. If a change of control (as such term is defined in the Collaboration Agreement) of the Company occurs before the Trigger Date, the delta will be the positive difference between $20 and the per share value paid by a third party in a change of control transaction. The Preferred Distribution, if any, will be payable on a monthly basis over a period of three years. If bet365 Investor sells any shares of common stock prior to the Trigger Date, the Preferred Distribution will be deemed to be $0.

The Company concluded that the Preferred Distribution (an initial put option) is an embedded derivative liability because the right to receive the Preferred Distribution will not transfer with any shares of common stock sold by the bet365 Investor. The fair value of the derivative liability associated with shares already sold to the investor was $0.9 million at December 31, 2018.

The Company also concluded the ability to purchase the remaining shares under the bet365 Common Stock Purchase Agreement is a freestanding contingent forward instrument. The fair value of this instrument was approximately $1.9 million at December 31, 2018, net of the derivative liability (contingent put option) of approximately $0.4 million for the right associated with the remaining shares to also receive the Preferred Distribution.

The derivative liability and the contingent forward asset were recorded at fair value upon the effective date of the Collaboration Agreement and will be subsequently remeasured to fair value at each reporting date. Changes in the fair value of the derivative liabilities and long-term asset will be recognized as a component of "other income (expense), net" in the consolidated statement of operations.

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 F Preferred Stock, redeemable

On November 6, 2018, the Company and Kien Huat entered into a letter agreement (as amended and restated on November 9, 2018, the "KH 2018 Preferred Stock Commitment Letter") pursuant to which Kien Huat committed to provide additional 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 on the terms set forth in the KH 2018 Preferred Stock Commitment Letter and in accordance with the terms of the Certificate of Designations, Preferences and Rights of the Series F Preferred Stock, which the Company filed with the Secretary of State of the State of Delaware on November 5, 2018 and amended and restated on November 9, 2018 (as amended and restated, the “Series F Certificate of Designation”). 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. The Company has recorded the fair value of this commitment as a non-derivative financial asset in the amount of $31.1 million on the consolidated balance sheet in "Other Assets" and "Paid in Capital" at December 31, 2018. The Company is amortizing this asset into equity as the commitment is drawn.

On November 13, 2018, under the terms of the KH Series F Preferred Stock Commitment, the Company and KH entered into a subscription agreement, pursuant to which KH purchased 120 shares of the Company's Series F Preferred Stock for an aggregate purchase price of $12 million and net proceeds to the Company (after deducting approximately $120,000 funding fee due to KH) of $11.9 million.

Series B Preferred Stock

The Company’s Series B Preferred Stock has voting rights of 0.054 votes per share and each share is convertible into 0.054 shares of common stock. It has a liquidation value of $29 per share and is entitled to annual cumulative dividends of $2.90 per share payable quarterly in cash. The Company has the right to pay the dividends on an annual basis by issuing shares of its common stock at the rate of $3.77 per share. The value of common shares issued as payment is based upon the average closing price for the common shares for the 20 trading days preceding January 30 of the year following that for which the dividends are due. At December 31, 2018 and 2017, there were 44,258 shares of Series B Preferred Shares outstanding.

The Board authorized the cash payment of the Series B Preferred Stock dividends on March 8, 2016. Quarterly payments in the amount of $32,087 were made on April 2, 2018, July 2, 2018, October 1, 2018 and January 2, 2019 for the 2018 period. Quarterly payments in the amount of $32,087 were made on April 3, 2017, July 3, 2017, October 2, 2017 and January 2, 2018 for the 2017 period.

Bryanston Settlement Agreement

Effective as of June 30, 2013, the Company and its affiliates consummated the closing of a Settlement Agreement and Release (as amended, the “Bryanston Settlement Agreement”) with Bryanston Group, Inc. and its affiliates (the “Bryanston Parties”). Pursuant to ASC 480, the Series E Preferred Stock held by the Bryanston Parties became contractually redeemable subject to the terms and conditions of the Bryanston Settlement Agreement and was recorded as a liability on the December 31, 2015 balance sheet.

On March 7, 2016, the Company redeemed the outstanding Series E Preferred Stock held by the Bryanston Group for approximately $30.7 million pursuant to the terms of the Settlement Agreement. Because the event that caused the entire liability to become due occurred during 2016, the liability was recorded pursuant to the payment terms in place at December 31, 2015.

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Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights

Option Matching Rights

Warrants

As of December 31, 2018, there are outstanding warrants to purchase an aggregate of approximately 133,300 shares of Empire’s common stock at $30.00 per share with an expiration date of May 10, 2020 and warrants to purchase 60,000 shares of common stock at $81.50 per share with an expiration date of March 15, 2025.

On November 1, 2014, MRMI and the Monticello Harness Horsemen’s Association (the “MHHA”) entered into an agreement that governs the conduct of MRMI and MHHA relating to horseracing purse payments, the simulcasting of horse races and certain other payments (the “2014 MHHA Agreement”). Pursuant to the 2014 MHHA Agreement, on March 16, 2018, Empire issued to MHHA 200,000 shares of common stock, and on March 15, 2018, Empire issued to MHHA a warrant to purchase 60,000 shares of common stock at $81.50 per share, the proceeds of any sales of which will provide additional monies for the harness horsemen’s purse account. Under the terms of the 2014 MHHA Agreement, the MHHA may dispose of the common stock beginning six months after receipt the common stock, subject to limitations upon the quantity of common shares disposed at any one time, as prescribed by the MHHA Agreement. The Company also provided a guaranty on the value of the shares provided to MHHA upon the termination of the MHHA Agreement, which is approximately seven years after issuance.

Restricted Stock, Restricted Stock Units and Options

Second Amended and Restated 2005 Equity Incentive Plan

In May 2015, the Company's Second Amended and Restated 2005 Equity Incentive Plan expired. Options to purchase approximately 13,300 shares of common stock were outstanding as of December 31, 2017 under the 2005 Equity Incentive Plan. During the year ended December 31, 2018 approximately 1,700 shares were exercised and approximately 11,60 shares were forfeited. There were no options outstanding at December 31, 2018.

In 2018, 2017 and 2016, the Company received approximately $25,000, $16,000 and $54,000 , respectively, in proceeds from shares of common stock issued as a result of the exercise of stock options. No options were granted under the 2005 Equity Incentive Plan in 2015.

The following table reflects stock option activity in 2018, 2017 and 2016:

	Number of shares		Range of exercise prices per share	Weighted average exercise price per share		Weighted average remaining contractual life (years)
Options outstanding at December 31, 2015	56,600		$7.95 - $131.10	$	48.50	2.61
Options exercised in 2016	(18,000	)	$7.95-$9.90
Forfeited in 2016	(5,000	)	$14.85 -$82.95
Options outstanding at December 31, 2016	33,600		$7.95 - $131.10	$	68.92	1.11
Options exercised in 2017	(2,000	)	$7.95
Forfeited in 2017	(18,300	)	$14.85 -$131.10
Options outstanding at December 31, 2017	13,300		$15.00 - $40.05	$	26.03	0.74
Options exercised in 2018	(1,700	)	$15.00
Forfeited in 2018	(11,600	)	$24.75 -$40.05
Options outstanding at December 31, 2018	—		—	$	—	—

2015 Equity Incentive Plan

In September 2015, our Board approved, and in November 2015, our stockholders approved the Company's 2015 Equity Incentive Plan (the "2015 Equity Incentive Plan"). The 2015 Equity Incentive Plan provides for an aggregate of 2,600,707 shares of common stock to be available for Awards. At December 31, 2018, a total of 2,280,701 shares were available for future issuance under the 2015 Equity Incentive Plan.

Stock-based compensation expense was approximately $7.2 million, $2.8 million and $2.7 million for the years ended December 31, 2018, 2017 and 2016, respectively. Stock based compensation expense for the 2015 Equity Plan was approximately $1.9 million in fiscal 2018 and stock based compensation expense related to the 2014 MHHA Agreement was approximately $5.3 million. As of December 31, 2018, there was approximately $2.2 million of total unrecognized compensation cost related to non-vested share-based compensation awards granted under the 2015 Equity Incentive Plans. That cost is expected to be recognized over the remaining vesting period of 2.5 years. This expected cost does not include the impact of any future stock-based compensation awards.

The following table reflects restricted stock and restricted stock unit activity in 2018, 2017 and 2016:

	Number of Restricted Shares		Number of Restricted Stock Units
Outstanding at December 31, 2015	137,000		—
Grants in 2016	105,000		—
Vested in 2016	(22,000	)	—
Forfeited in 2016	(4,000	)	—
Outstanding at December 31, 2016	216,000		—
Grants in 2017	1,000		74,500
Vested in 2017	(55,000	)	—
Forfeited in 2017	(22,000	)	(1,600	)
Outstanding at December 31, 2017	140,000		72,900
Grants in 2018	—		161,200
Vested in 2018	(56,500	)	(18,600	)
Forfeited in 2018	(46,000	)	(20,000	)
Outstanding at December 31, 2018	37,500		195,500

Option Matching Rights

On August 19, 2009, the Company entered into an investment agreement (the "2009 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 2009 Investment Agreement, if any options or warrants outstanding at the time of the final closing under the 2009 Investment Agreement, or the first 200,000 granted to directors or officers as of the final closing date under the 2009 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”.

Pursuant to the terms of the 2009 Investment Agreement, the Company is required to provide notice (an “Option Exercise Notice”) of any exercise within five business days, after which notice is received, Kien Huat is required to notify the Company of whether it decides to exercise such Option Matching Rights within 10 business days. The Company did not provide such notice to Kien Huat pursuant to the 2009 Investment Agreement. On December 31, 2015, the Company and Kien Huat entered into a letter agreement (the “OMR Letter Agreement”) pursuant to which the parties agreed that, as a result of the Company’s failure to provide the Option Exercise Notice, Kien Huat’s right to elect to purchase an equal number of shares had not yet vested and would inure to Kien Huat’s benefit only upon the Company’s delivery of such Option Exercise Notice. To fulfill the Company’s obligations pursuant to the 2009 Investment Agreement pursuant to the OMR Letter Agreement, the Company provided the Option Exercise Notice as of December 31, 2015 for approximately 204,706 shares of common stock as required by the Investment Agreement. Kien Huat had 10 business days following the date on which the Company’s Chief Compliance Officer provides written notice that Kien Huat is no longer unable to exercise the Option Matching Rights pursuant to the Company’s Insider Trading Policy (the “Effective Date Notice”) to elect whether to exercise such Option Matching Rights.

On February 17, 2016, the Company provided the Effective Date Notice to Kien Huat regarding Kien Huat's election to exercise its Option Matching Rights. On February 17, 2016, Kien Huat declined to exercise the Option Matching Rights to purchase 204,706 shares of common stock. At December 31, 2017, there were approximately 3,000 Option Matching Rights outstanding with various exercise prices and expiration dates through July 2018. On January 24, 2018, Kien Huat elected to exercise its Option Matching Rights for 1,666 shares of the Company's common stock, after a former officer exercised his stock option which was due to expire on January 15, 2018. The Option Matching Rights were exercised at a price of $14.95 per share. The last remaining Option Matching Rights expired in July 2018.

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Concentration

12 Months Ended

Dec. 31, 2018

Risks and Uncertainties [Abstract]

Concentration

Concentration

As of December 31, 2018, the Company had no receivable which represented more than 10% of the total net outstanding accounts receivable.

As of December 31, 2017, the Company had one debtor that consisted of greater than 10% of accounts receivable. Hawthorne OTB represented 13.0% of the total net outstanding racing- related accounts receivable.

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Employee Benefit Plan

12 Months Ended

Dec. 31, 2018

Retirement Benefits [Abstract]

Employee Benefit Plan

Employee Benefit Plans

Empire 401(k) Plan

Our eligible employees may participate in a Company-sponsored 401(k) benefit plan (the “Plan”). The Company established the Plan to provide employees with the opportunity to accumulate pre-tax assets, and to provide employer contributions for eligible employees for their retirement and other needs. It is intended to be administered in accordance with all applicable federal laws and regulations. The Plan covers substantially all employees not otherwise covered by plans resulting from collective bargaining agreements. The Plan permits employees to defer a portion of their compensation as a pre-tax deferral up to statutory maximums. Effective July 2016 through December 31, 2018 (the "401(k) Plan"), the Company made a matching contribution for eligible salaried employees as follows: 50% matching contribution for an employee contribution of up to 4% of compensation. Pursuant to the 401(k) Plan, eligible employees were 100% vested in the portion of their accounts derived from the Company’s matching contributions. Matching contributions for the years ended December 31, 2018, 2017 and 2016 were approximately $1.4 million, $0.2 million and $0.1 million, respectively. As of December 31, 2018, the Plan had approximately 1,000 participants.

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Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Tax Cuts and Jobs Act (the "2017 Tax Act") was signed into law on December 22, 2017. The major components of the 2017 Tax Act, were effective January 1, 2018 and significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21%, eliminating certain deductions and introducing new tax regimes. The 2017 Tax Act also enhanced and extended through 2026 the option to claim accelerated depreciation deductions on qualified property. In response to U.S. tax reform, the Staff of the U.S. Securities and Exchange Commission issued Staff Accounting Bulletin No. 118 (“SAB No. 118”) to provide guidance to registrants in applying ASC Topic 740 in connection with U.S. tax reform. SAB No. 118 provides that in the period of enactment, the income tax effects of U.S. tax reform may be reported as a provisional amount based on a reasonable estimate (to the extent a reasonable estimate can be determined), which would be subject to adjustment during a “measurement period.” The measurement period begins in the reporting period of the U.S. tax reform’s enactment and ends when a registrant has obtained, prepared and analyzed the information that was needed in order to complete the accounting requirements under ASC Topic 740. The primary impact of the 2017 Tax Act was the remeasurement of the Company’s deferred tax assets, based upon the new U.S. statutory corporate tax rate of 21% and the required change to the related valuation allowance. Due to the Company’s operating losses and full valuation allowance, the 2017 Tax Act did not materially impact the 2018 and 2017 operating results or income tax expense. As of December 31, 2018, the Company has finalized its analysis of the Act and determined that due to limitations on interest expense and net operating loss carryforwards, a $0.1 million deferred tax liability was recorded.

Empire and all of its subsidiaries file a consolidated income tax return. At December 31, 2018 and 2017, the estimated deferred income tax assets and liability were comprised of the following:

	12/31/2018			12/31/2017
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$87,181			$40,502
Stock—based compensation	1,911			2,097
Development costs	619			27,213
Deferred interest	11,494			—
Deferred compensation	590			68
Depreciation	5,604			376
Other	907			952
	108,306			71,208
Deferred tax liability:
Depreciation	(2,037		)	—
Net deferred tax assets	106,269			71,208
Valuation allowance	(106,378		)	(71,208		)
Deferred tax liability, net	$	(109	)	$	—

The valuation allowance increased approximately $35.2 million during the year ended December 31, 2018, primarily due to the increase in the net loss in 2018. The valuation allowance decreased approximately $17.7 million during the year ended December 31, 2017, primarily due to the impact of the remeasurement of the net deferred tax assets, based upon the new U.S. statutory corporate tax rate of 21%, offset by current year activity which increased the net deferred tax assets prior to their remeasurement for the new tax rate. Of the $354.2 million in net operating loss carryforwards, approximately $278.0 million is readily available as of December 31, 2018.

There are limits on the Company’s ability to use its current net operating loss carryforwards, potentially increasing the future tax liability of the Company if it were to generate taxable income. As of December 31, 2018, the Company had federal net operating loss carryforwards of approximately $152.1 million that expire between 2019 and 2037, approximately $249.1 million of New York State net operating loss carryforwards that expire between 2019 and 2038 and approximately $202.1 million of federal net operating losses that are subject to an unlimited carryforward due to the enactment of the 2017 Tax Act. The 2004 merger of the Company’s operations with Catskills Development LLC and the investment by Kien Huat in 2009 will limit the amount usable in any year of its net operating losses due to the change in control of the Company within the meaning of the tax laws such that approximately $55.1 million of the limited federal net operating losses may expire unused prior to the 2019 through 2037 expiration.

The Company is in the process of completing a tax cost segregation study related to the construction of Resorts World Catskills. Individual deferred tax items that directly or indirectly relate to tax depreciation, including net operating loss carryforwards, development costs, depreciation and the corresponding valuation allowance, have been estimated based on currently available tax information. The estimation of these individual deferred items has no material impact to the total deferred taxes reflected on the December 31, 2018 balance sheet or the December 31, 2018 tax expense. The Company expects to complete the study during 2019, as part of its filing of its 2019 Federal and New York State income tax returns.   

The following is a reconciliation of the federal statutory tax rate to the Company’s effective tax rate:

	Year ended December 31,
	2018		2017		2016
Tax provision at federal statutory tax rate	21.0	%	35.0	%	35.0	%
Non-deductible interest	—	%	—	%	(0.3	)%
Permanent items	(0.3	)%	(3.1	)%	(3.5	)%
Tax reform	(0.1	)%	—	%	—	%
Change in valuation allowance	(20.7	)%	(31.9	)%	(31.2	)%
Effective tax rate	(0.1	)%	—	%	—	%

As of December 31, 2018, the Company does not have any uncertain tax positions. As a result, there are no unrecognized tax benefits as of December 31, 2018. If the Company was to incur any interest and penalties in connection with income tax deficiencies, the Company would classify interest within interest expense and classify penalties as selling, general and administrative expenses within the consolidated statement of operations.

The Company files tax returns in the U.S. federal jurisdiction, as well as in New York and Delaware. All of its federal and state tax filings as of December 31, 2017 have been timely filed. The Company is subject to U.S. federal or New York State income tax examinations by tax authorities for years after 2015 and 2014. During the periods open to examination, the Company has net operating loss and tax credit carryforwards that have attributes from closed periods. Since these net operating loss and tax credit carryforwards may be utilized in future periods, they remain subject to examination.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2018

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

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:

Year ending December 31,	Total Payments
	(in thousands)
2019	$10,382
2020	9,026
2021	8,503
2022	8,400
2023	8,400
2024 to 2056	353,449
Total	$398,160

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 for the lease of the parcel on which the Casino is being 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 December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1)	$7,500
2020 (1)	7,500
2021 (1)	8,000
2022 (1)	8,100
2023 (1)	8,100
2024 to 2056 (1)	$338,424

(1) From September 1, 2018 through the remainder of the term of the Casino Lease, fixed rent equals $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 the 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 December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1) (2)	$63
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 (2)	150
2024 to 2056 (2) (3)	$7,483

(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 is $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.

The Alder Lease

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

The following table represents the future fixed rent payments under the Alder Lease at December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1) (2)	$150
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 (2)	150
2024 to 2056 (2) (3)	$7,542

(1) From the date the Alder Lease commenced (the “Alder Lease Commencement Date”) and until the date on which The Alder opened for business, which was January 1, 2019 (the “Alder Opening Date”), fixed rent payments were $0.

(2) From the Alder 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 Alder Lease, fixed rent will equal $250,000 per year.

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

Purchase Option Agreement

On December 28, 2015, Montreign Operating and EPR entered into a Purchase Option Agreement (the “Purchase Option Agreement”), pursuant to which EPR granted to Montreign Operating the option (the “Purchase Option”) to purchase all, but not fewer than all, of the Development Project Parcels for a purchase price of $175 million, ($200 million after the sixth anniversary of the date the license was awarded, less a credit of up to $25 million for certain previous payments made by the Project Parties. The Purchase Option commenced on December 28, 2015 and will expire on the earlier to occur of (i) the natural expiration of the term of the Casino Lease and (ii) 90 days following the earlier termination of the Casino Lease, if otherwise terminated in accordance with its terms (the “Purchase Option Period”).

Under the Purchase Option Agreement, EPR also granted to Montreign Operating the option (the “Resort Project Purchase Option”) to purchase not less than all of the balance of the EPR Property, excluding the Development Project Parcels and the Waterpark (the “Resort Property”) for an additional fee. The Resort Project Purchase Option may be exercised only simultaneously with or after the exercise of the Purchase Option. The Resort Project Purchase Option commenced on December 28, 2015 and will expire on the earlier to occur of (a) the expiration of the Purchase Option Period or (b) March 1, 2026.

Under the Purchase Option Agreement, EPR also granted to Montreign a right of first offer (“ROFO”) with respect to all or any portion of the Resort Property. Under the terms of the ROFO, if EPR makes an offer to or rejects an offer made by Montreign Operating, then EPR will be precluded for a period of six months from transferring the designated portion of the Resort Property at a price and on terms which are on the whole substantially equivalent to or worse than those proposed or accepted by Montreign Operating. The ROFO commenced on December 28, 2015 and will continue in full force and effect until EPR has sold, leased, licensed or otherwise transferred all of the Resort Property.

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Related Party Transactions

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Moelis Agreements

2018 Moelis Letter Agreement

On August 7, 2018, the Company entered into an engagement agreement (the "2018 Moelis Letter 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 2018 Moelis Letter Agreement, Moelis was engaged as exclusive financial advisor with respect to a strategic financing transaction for the Company, if any. Pursuant to the 2018 Moelis Letter Agreement, we paid Moelis a retainer fee of $100,000 upon execution of the agreement. In the event a transaction were to be consummated, the 2018 Moelis Letter Agreement contemplated additional transaction-based fees would be earned by Moelis. On November 9, 2018, the Company and Moelis entered into an amendment (the “2018 Moelis Letter Agreement Amendment”) to the 2018 Moelis Letter Agreement. Pursuant to the 2018 Moelis Letter Agreement Amendment, the parties agreed no fee would be payable to Moelis in connection with any equity investment in connection with a strategic agreement relating to sports betting. In addition, pursuant to the 2018 Moelis Letter Agreement Amendment, the fee payable to Moelis with respect to the Collaboration Agreement was increased from $3 million to $4 million. In November 2018, the Company paid approximately $4.1 million to Moelis upon the consummation of the Collaboration Agreement to pay fees and expenses due. These fees were recorded as an adjustment to the proceeds of the common stock issued to bet365 (see Note I).

Moelis-Montreign Letter Agreement

In March 2017, Montreign Operating entered into an engagement agreement with Moelis (the "Moelis-Montreign Letter Agreement") pursuant to which it engaged Moelis to act as exclusive financial advisor to Montreign Operating. Pursuant to the Moelis-Montreign Letter Agreement, Moelis was entitled to an advisory fee of $100,000, which was paid upon execution, and the reimbursement of expenses up to $75,000. The Moelis-Montreign Letter Agreement expired on its terms on December 31, 2017.

On May 16, 2017, Moelis and the Company entered into a letter agreement reinstating and amending the 2013 Moelis Letter Agreement (as defined below) (the "Updated Moelis-Montreign Letter Agreement"). Pursuant to the Updated Moelis-Montreign Letter Agreement, Moelis was engaged to act as non-exclusive financial advisor to the Company in connection with certain debt and equity financing and corporate transactions the Company may undertake. The Updated Moelis-Montreign Letter Agreement described the fees due to Moelis for each transaction in which the Company engaged. If the Company engaged in a covered transaction at any time within 12 months of the termination of the Updated Moelis-Montreign Letter Agreement for any reason other than for cause by the Company, Moelis was entitled to receive a transaction fee according to the schedule provided therein. The Updated Moelis Letter Agreement expired on its terms on December 31, 2017. 

On May 26, 2017, in connection with the closing of the first amendment to the Term Loan Agreement, Moelis was paid approximately $178,000 for financial advisory services pursuant to the Updated Moelis-Montreign Letter Agreement.

2013 Moelis Letter Agreement

On December 9, 2013, the Company executed a letter agreement (the "2013 Moelis Letter Agreement") pursuant to which it engaged Moelis to act as its financial advisor in connection with the Casino. Pursuant to the 2013 Moelis Letter Agreement, we agreed to pay Moelis a retainer fee in the aggregate amount of approximately $250,000, of which approximately $150,000 was payable upon execution and $100,000 of which was paid within 90 days after execution. In the event a financing was consummated, the 2013 Moelis Letter Agreement contemplated additional transaction-based fees would be earned by Moelis.

At the close of the January 2016 Rights Offering, Moelis was paid approximately $2.1 million for financial advisory services in connection with the Casino pursuant to the 2013 Moelis Letter Agreement. These fees were included in "S,G&A Expense " on the Consolidated Statement of Operations for the year ended December 31, 2016.     

On January 24, 2017, in connection with the closing of the Term Loan Facility and the Revolving Credit Facility, Moelis was paid approximately $2.5 million for financial advisory services pursuant to the 2013 Moelis Letter Agreement. These fees were capitalized and included in "Debt Issuance Costs" which were netted against the Term Loan Facility on the consolidated balance sheet at December 31, 2017. The fees are included in "Interest Expense " on the consolidated statement of operations and are being amortized over the life of the Term Loan Facility.

Gregg Polle, a director of the Company, is a Managing Director of Moelis. Mr. Polle refrained from participating in the discussion of, and the determination of whether to enter into, each agreement.

Agreements with Kien Huat and Related Parties

2018 Kien Huat Preferred Stock Commitment Letter

On November 6, 2018, the Company and Kien Huat entered into a commitment letter (as amended and restated on November 9, 2018, the "2018 Kien Huat 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 2018 Kien Huat Preferred Stock Commitment Letter, Kien Huat agreed to purchase up to $126 million (the "Commitment Amount") of Series F Preferred Stock on the terms set forth in the 2018 Kien Huat Preferred Stock Commitment Letter. Kien Huat committed to purchase 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 2018 Kien Huat 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 each of November 13, 2018 and February 20, 2019, in accordance with the 2018 Kien Huat Preferred Stock Commitment Letter, the Company and Kien Huat entered into subscription agreements to purchase an aggregate 320 shares of Series F Preferred Stock for an aggregate purchase price of $32 million and net proceeds to the Company (after deducting a $0.3 million funding fee due to Kien Huat) of $31.7 million.

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 right to use the RWS Licensed Marks may be assigned or sub-licensed only in certain limited circumstances. However, any use of the RWS Licensed Marks for a purpose other than the Permitted Uses will require the prior written consent of RWS. 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 on-line 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. Montreign Operating’s rights and obligations under the RWS License Agreement are subject to and governed by the rules and regulations applicable to Montreign Operating’s gaming operations at the Casino, and the fiduciary obligations of the boards of directors of Montreign Operating and Empire, as well as the fiduciary obligations of Kien Huat. 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 Alder 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 incurred an expense of approximately $1.5 million for the year ended December 31, 2018, reflecting the fee payable pursuant to the RWS License Agreement of which $0.9 million was payable at December 31, 2018.

During the term of the RWS License Agreement, Montreign Operating may participate in the Genting Rewards Alliance loyalty program (the “Alliance”), which will provide central marketing and cross-promotion opportunities for the Development Projects with other members of the Alliance. Montreign Operating’s participation in the Alliance is subject to the provisions of a separate agreement, which is currently being negotiated by the parties.

Mr. Lim, our Director, is also a director of Resorts World Inc. Pte Ltd., the parent company of RWS.

Kien Huat Letter Agreement

On February 17, 2016, Kien Huat and the Company entered into a letter agreement (the "Kien Huat Letter Agreement") pursuant to which, during the period commencing on February 17, 2016 and ending on the earlier of (i) the three-year anniversary of the closing of the January 2016 Rights Offering and (ii) the one-year anniversary of the opening of the Casino, Kien Huat has agreed not to take certain actions with respect to the Company. In particular, during such time period, Kien Huat has agreed not to, and to cause the Kien Huat Parties not to, take certain actions in furtherance of a “going-private” transaction (as such term is defined in the Kien Huat Letter Agreement) involving the Company unless such transaction is subject to the approval of (x) holders of a majority of the votes represented by the common stock, Series B Preferred Stock and any other capital stock of the Company entitled to vote together with the common stock in the election of the Board (other than any such capital stock owned by any Kien Huat Parties) and (x) either (A) a majority of disinterested members of the Board or (y) a committee of the Board composed of disinterested members of the Board. In addition, during such period, the Company and Kien Huat have agreed to cooperate to ensure that, to the greatest extent possible, the Board includes no fewer than three independent directors (the definition of independence as determined under the standards of The Nasdaq Stock Market or any other securities exchange on which the common stock of the Company is then listed).

On December 28, 2017, the Company and Kien Huat amended the Kien Huat Letter Agreement to extend by one year Kien Huat’s obligation not to engage in a going-private transaction with the Company without the prior approval of the majority of the Company’s minority shareholders and a majority of the disinterested directors of the Company. As a result of the amendment, such restriction now covers a period ending on February 8, 2020. Other than this one-year extension, all other terms of the Kien Huat Letter Agreement remain unchanged.

2015 Kien Huat Commitment Letter

To support the Company's financing needs for the Development Projects, Kien Huat entered into a series of commitment letters with the Company, which was last amended on September 22, 2015 (as amended, the "2015 Kien Huat Commitment Letter"). Pursuant to the 2015 Kien Huat Commitment Letter, Kien Huat committed to an equity investment in the Company in the aggregate amount of $375 million in support of the Development Projects, the redemption of the Series E Preferred Stock and for working capital purposes. Kien Huat invested an aggregate of $340 million of such commitment pursuant to the standby purchase agreements relating to rights offerings conducted by the Company in 2015 and 2016. Kien Huat also agreed to participate in, and backstop, a follow-on rights offering on the same terms and conditions and at the same subscription price as the rights offering conducted by the Company in 2016, in an amount not to exceed $35 million (the "Follow-On Rights Offering").

In connection with the Kien Huat Note Exchange Agreement (as defined and discussed in Note H above), on December 28, 2017, the Company and Kien Huat further amended the 2015 Kien Huat Commitment Letter (the "2015 Kien Huat Commitment Amendment"). Pursuant to the 2015 Kien Huat Commitment Amendment, Kien Huat’s obligation to participate in, and backstop the Follow-On Rights Offering was terminated. Other than the termination of such follow-on standby purchase commitment, all other terms of the 2015 Kien Huat Commitment Letter remain unchanged.

Kien Huat Investment Agreement

On August 19, 2009, the Company entered into the 2009 Investment Agreement with Kien Huat, pursuant to which we issued 6,901,208 shares of common stock, representing just under 50% of our voting power at the time. Under the terms of the 2009 Investment Agreement, Kien Huat is entitled to recommend three directors whom we are required to cause to be elected or appointed to our Board, subject to the satisfaction of all legal and governance requirements regarding service as a member of our Board and to the reasonable approval of the Governance Committee of the Board of Directors. In 2017, Kien Huat recommended Messrs. Pearlman, Eller and Lim for appointment to the Board of Directors pursuant to the 2009 Investment Agreement. Kien Huat will continue to be entitled to recommend three nominees for directors for so long as it owns at least 24% of our voting power outstanding at such time, after which the number of directors whom Kien Huat will be entitled to designate for election or appointment to the Board of Directors will be reduced proportionally to Kien Huat’s percentage of ownership. Under the 2009 Investment Agreement, for so long as Kien Huat is entitled to designate nominees for directors to the Board, among other things, Kien Huat will have the right to nominate one of its nominees elected to serve as a director to serve as the Chairman of the Board, and Mr. Pearlman has been appointed to serve as Executive Chairman of the Board pursuant to Kien Huat’s recommendation. Until such time as Kien Huat ceases to own capital stock with at least 30% of our voting power outstanding at such time, the Board of Directors will be prohibited under the terms of the 2009 Investment Agreement from taking certain actions relating to fundamental transactions involving us and our subsidiaries and certain other matters without the affirmative vote of the directors nominated by Kien Huat.

Registration Rights

Pursuant to the terms of the 2009 Investment Agreement, on August 19, 2009, the Company entered into a Registration Rights Agreement with the Kien Huat (the “Registration Rights Agreement”). The Registration Rights Agreement provides, among other things, that Kien Huat may require that the Company file one or more “resale” registration statements, registering under the Securities Act of 1933, as amended, the offer and sale of all of the common stock issued or to be issued to Kien Huat pursuant to the 2009 Investment Agreement as well as any shares acquired by way of a share dividend or share split or in connection with a combination of such shares, recapitalization, merger, consolidation or other reorganization with respect to such shares. In addition, pursuant to the 2015 Kien Huat Commitment Letter, the Company agreed to register for resale all of the shares of common stock held by Kien Huat. On February 23, 2016, the Company filed a registration statement on Form S-3 (No. 333-309662) (the "Resale Registration Statement") registering for resale all of the shares of common stock held by Kien Huat. On August 7, 2018, the Company filed a Request to Withdraw the Resale Registration Statement. No securities were sold under the Resale Registration Statement.

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Summarized Quarterly Data (Unaudited)

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Summarized Quarterly Data (Unaudited)

Summarized Quarterly Data (Unaudited)

On March 12, 2019, the Company's management concluded that its previously filed interim consolidated financial statements as of and for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018 (“Restated Quarters”) should no longer be relied upon.    

For the year ended December 31, 2018, the Company reviewed certain technical accounting guidance during its year-end review process related to the accounting for stock granted and an associated guaranty obligation with MHHA in February 2018. Based on this review, the Company concluded that the previously recorded accounting treatment recorded in the first quarter of 2018 was not appropriate. As a result, the Company determined that the previously issued quarterly financial statements for the quarterly periods ending March 31, June 30, and September 30, 2018 should be restated to properly reflect the accounting for this transaction for these periods.

On November 1, 2014, MRMI, a wholly-owned subsidiary of Empire and the MHHA entered into an agreement that governs the conduct of MRMI and MHHA relating to horseracing purse payments, the simulcasting of horse races and certain other payments (the "2014 MHHA Agreement"). Pursuant to the 2014 MHHA Agreement and that certain Securities Acquisition Agreement, dated March 3, 2014, between Empire and MHHA (the “MHHA SAA”), on March 16, 2018, Empire issued to MHHA 200,000 shares of common stock (the "MHHA Shares"), and on March 15, 2018, Empire issued to MHHA a warrant to purchase 60,000 shares of common stock at $81.50 per share (the “MHHA Warrants”). The funds generated from the sale of the MHHA Shares or the sale of any shares acquired by MHHA upon the exercise of the MHHA Warrants will be deposited into a purse account for the benefit of MHHA and its members. If, on February 8, 2025, the value of any MHHA Shares previously sold by MHHA and the fair market value of any MHHA Shares not sold by MHHA by February 8, 2025 is less than $5.5 million, then the Company agreed to deposit into the special purse account an amount equal to the difference between $5.5 million and the value of the shares of common stock sold by MHHA and not sold by MHHA.

Upon satisfaction of the conditions contained in the 2014 MHHA Agreement and the MHHA SPA, the Company issued the MHHA Shares and the MHHA Warrants on March 16, 2018 and March 15, 2018, respectively. On the date of issuance, the Company determined that the MHHA Shares had a fair value of $4.7 million, which had been recorded as a long-term asset, net of $1.4 million which was previously expensed through March 2018. In preparing its audited financial statements for the year ended December 31, 2018, the Audit Committee and management of the Company determined that based on further review of applicable technical accounting literature, the value of the MHHA Shares should be recognized as an expense upon issuance and the associated fair value of the guaranty liability of $5.5 million should be recognized as a liability-classified guaranty.   

      The restatement of the Company's consolidated financial statements for the Restated Quarters is set forth below in the tabular presentation.

The effect of the restatement to relevant financial line items included on the previously issued unaudited interim consolidated financial statements for the quarterly period ended March 31, 2018 was as follows:

Consolidated Balance Sheet			At March 31, 2018
	As Reported		Adjustments		As Restated
Assets			($ in thousands)
Total current assets	$39,458		—		$39,458
Other assets	3,592		(3,358	)	234
Total assets	$818,552		$(3,358)		$815,194
Liabilities and Stockholders’ equity
Current liabilities:
Total current liabilities	$93,299		—		$93,299
Other long-term liabilities	7,905		1,964		9,869
Total liabilities	564,251		1,964		566,215
Stockholders’ equity:
Accumulated deficit	(322,029	)	(5,322	)	(327,351	)
Total stockholders’ equity	254,301		(5,322	)	248,979
Total liabilities and stockholders’ equity	$818,552		$(3,358)		$815,194

Consolidated Statement of Operations and Comprehensive Loss	For the three months ended March 31, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$33,522		—		$33,522
Costs and expenses:
Selling, general and administrative	8,084		5,097		13,181
Total costs and expenses	52,413		5,097		57,510
Loss from operations	(18,891	)	(5,097	)	(23,988	)
Other income (expense)	—		(225	)	(225	)
Loss before income taxes	(20,911	)	(5,322	)	(26,233	)
Net loss	(20,911	)	(5,322	)	(26,233	)
Net loss applicable to common stockholders	$(20,943)		$(5,322)		$(26,265)
Weighted average common shares outstanding
Basic	32,538		—		32,538
Diluted	32,538		—		32,538
Loss per common share
Basic	$(0.64)		$(0.16)		$(0.81)
Diluted	$(0.64)		$(0.16)		$(0.81)
Comprehensive loss:
Net loss	$(20,911)		$(5,322)		$(26,233)
Unrealized income on Interest Rate Cap	115		—		115
Comprehensive loss	$(20,796)		$(5,322)		$(26,118)

Consolidated Statement of Cash Flows	For the three months ended March 31, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(20,911)		$(5,322)	$(26,233)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	697		5,097	5,794
Changes in operating assets and liabilities:
Accrued expenses and other liabilities	10,174		225	10,399
Net cash used in operating activities	1,866		—	1,866
Net cash used in investing activities	(1,201	)	—	(1,201	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	10,923		—	10,923
Net increase/(decrease) in cash, cash equivalents and restricted cash	11,588		—	11,588
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$64,643		$—	$64,643

The effect of the restatement to relevant financial line items included on the previously issued unaudited interim consolidated financial statements for the quarterly period ended June 30, 2018 was as follows:

Consolidated Balance Sheet			At June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Current assets:
Total current assets	$29,828		—		$29,828
Other assets	3,471		(3,189	)	282
Total assets	$781,715		$(3,189)		$778,526
Liabilities and Stockholders’ equity
Total current liabilities	$93,817		—		$93,817
Other long-term liabilities	7,540		1,832		9,372
Total liabilities	564,101		1,832		565,933
Stockholders’ equity:
Accumulated deficit	(359,357	)	(5,021	)	(364,378	)
Total stockholders’ equity	217,614		(5,021	)	212,593
Total liabilities and stockholders’ equity	$781,715		$(3,189)		$778,526

Consolidated Statement of Operations and Comprehensive Loss	For the three months ended June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$49,136		—		$49,136
Costs and expenses:
Selling, general and administrative	16,949		(169	)	16,780
Total costs and expenses	71,530		(169	)	71,361
Loss from operations	(22,394	)	169		(22,225	)
Other income (expense)	—		132		132
Loss before income taxes	(37,298	)	301		(36,997	)
Net loss	(37,298	)	301		(36,997	)
Net loss applicable to common stockholders	$(37,330)		$301		$(37,029)
Weighted average common shares outstanding
Basic	32,663		—		32,663
Diluted	32,663		—		32,663
Loss per common share
Basic	$(1.14)		$0.01		$(1.13)
Diluted	$(1.14)		$0.01		$(1.13)
Comprehensive loss:
Net loss	$(37,298)		$301		$(36,997)
Unrealized income on Interest Rate Cap	72		—		72
Comprehensive loss	$(37,226)		$301		$(36,925)

Consolidated Statement of Operations and Comprehensive Loss	For the six months ended June 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Net revenues:	$82,658		—		$82,658
Costs and expenses:
Selling, general and administrative	25,033		4,928		29,961
Total costs and expenses	123,943		4,928		128,871
Loss from operations	(41,285	)	(4,928	)	(46,213	)
Other income (expense)	—		(93	)	(93	)
Loss before income taxes	(58,209	)	(5,021	)	(63,230	)
Net loss	(58,209	)	(5,021	)	(63,230	)
Net loss applicable to common stockholders	$(58,273)		$(5,021)		$(63,294)
Weighted average common shares outstanding
Basic	32,601		—		32,601
Diluted	32,601		—		32,601
Loss per common share
Basic	$(1.79)		$(0.15)		$(1.94)
Diluted	$(1.79)		$(0.15)		$(1.94)
Comprehensive loss:
Net loss	$(58,209)		$(5,021)		$(63,230)
Unrealized income (loss) on Interest Rate Cap	$187		—		$187
Comprehensive loss	$(58,022)		$(5,021)		$(63,043)

Consolidated Statement of Cash Flows	For the six months ended June 30, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(58,209)		$(5,021)	$(63,230)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	1,449		4,928	6,377
Accrued expenses and other liabilities	12,996		93	13,089
Net cash used in operating activities	(27,624	)	—	(27,624	)
Cash flows provided by (used in) investing activities:
Net cash used in investing activities	(1,257	)	—	(1,257	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	15,967		—	15,967
Net increase/(decrease) in cash, cash equivalents and restricted cash	(12,914	)	—	(12,914	)
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$40,141		—	$40,141

The effect of the restatement to relevant financial line items included on the previously issued unaudited interim consolidated financial statements for the quarterly period ended September 30, 2018 was as follows:

Consolidated Balance Sheet			At September 30, 2018
	As Reported		Adjustments		As Restated
			($ in thousands)
Current assets:
Total current assets	$37,772		—		$37,772
Other assets	3,307		(3,020	)	287
Total assets	$831,332		$(3,020)		$828,312
Liabilities and Stockholders’ equity
Current liabilities:
Total current liabilities	$100,199		—		$100,199
Other long-term liabilities	7,555		2,177		9,732
Total liabilities	646,463		2,177		648,640
Stockholders’ equity:
Accumulated deficit	(393,105	)	(5,197	)	(398,302	)
Total stockholders’ equity	184,869		(5,197	)	179,672
Total liabilities and stockholders’ equity	$831,332		$(3,020)		$828,312

Consolidated Statement of Operations and Comprehensive Loss	Three months ended September 30, 2018
	As Reported			Adjustments			As Restated
				($ in thousands)
Net revenues:	$59,948			—			$59,948
Costs and expenses:
Selling, general and administrative	19,754			(169		)	19,585
Total costs and expenses	77,838			(169		)	77,669
Loss from operations	(17,890		)	169			(17,721		)
Other income (expense)	—			(345		)	(345		)
Loss before income taxes	(33,716		)	(176		)	(33,892		)
Net loss	(33,716		)	(176		)	(33,892		)
Net loss applicable to common stockholders	$(33,748)			$(176)			$(33,924)
Weighted average common shares outstanding
Basic	32,689			—			32,689
Diluted	32,689			—			32,689
Loss per common share
Basic	$(1.03)			$(0.01)			$(1.04)
Diluted	$(1.03)			$(0.01)			$(1.04)
Comprehensive loss:
Net loss	$(33,716)			$(176)			$(33,892)
Unrealized income on Interest Rate Cap	39			—			39
Comprehensive loss	$	(33,677	)	$	(176	)	$	(33,853	)

Consolidated Statement of Operations and Comprehensive Loss	Nine months ended September 30, 2018
	As Reported			Adjustments			As Restated
				($ in thousands)
Net revenues	$142,606			$0			$142,606
Costs and expenses:
Selling, general and administrative	44,787			4,759			49,546
Total costs and expenses	201,781			4,759			206,540
Loss from operations	(59,175		)	(4,759		)	(63,934		)
Other income (expense)	—			(438		)	(438		)
Loss before income taxes	(91,925		)	(5,197		)	(97,122		)
Income tax benefit	—			—			—
Net loss	(91,925		)	(5,197		)	(97,122		)
Dividends on preferred stock	(96		)	—			(96		)
Net loss applicable to common stockholders	$(92,021)			$(5,197)			$(97,218)
Weighted average common shares outstanding
Basic	32,653			—			32,653
Diluted	32,653			—			32,653
Loss per common share
Basic	$(2.82)			$(0.16)			$(2.98)
Diluted	$(2.82)			$(0.16)			$(2.98)
Comprehensive loss:
Net loss	$(91,925)			$(5,197)			$(97,122)
Unrealized income on Interest Rate Cap	226			—			226
Comprehensive loss	$	(91,699	)	$	(5,197	)	$	(96,896	)

Consolidated Statement of Cash Flows	For the nine months ended September 30, 2018
	As Reported		Adjustments	As Restated
			($ in thousands)
Cash flows provided by (used in) operating activities:
Net loss	$(91,925)		$(5,197)	$(97,122)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation	2,042		4,759	6,801
Accrued expenses and other liabilities	26,087		438	26,525
Net cash used in operating activities	(42,335	)	—	(42,335	)
Cash flows provided by (used in) investing activities:
Net cash used in investing activities	(20,252	)	—	(20,252	)
Cash flows provided by (used in) financing activities:
Net cash provided by financing activities	92,602		—	92,602
Net increase/(decrease) in cash, cash equivalents and restricted cash	30,015		—	30,015
Cash, cash equivalents and restricted cash, beginning of year	53,055		—	53,055
Cash, cash equivalents and restricted cash, end of year	$83,070		$—	$83,070

The following table summarizes the quarterly results of operations for the year ended December 31, 2017:

	Fiscal Quarter
	Quarter 1		Quarter 2		Quarter 3		Quarter 4
2017	(in thousands, except per share data)
Net revenues	$14,769		$17,186		$18,713		$15,183
Loss from operations	(6,356	)	(6,830	)	(6,844	)	(9,887	)
Net loss	(11,451	)	(11,916	)	(10,872	)	(12,105	)
Loss per common share:
Loss per common share, basic	$(0.37)		$(0.39)		$(0.35)		$(0.39)
Loss per common share, diluted	$(0.37)		$(0.39)		$(0.35)		$(0.39)

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Subsequent Events

12 Months Ended

Dec. 31, 2018

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

MRMI Operations

On January 22, 2019, management of the Company notified employees of MRMI concerning the Company’s plans to cease VGM operations and food and beverage service at Monticello Casino and Raceway. The Company anticipates operations to cease on or about April 23, 2019.

Series F Preferred Stock Subscription

On February 20, 2019, pursuant to the KH 2018 Preferred Stock Commitment Letter, the Company and Kien Huat entered into a subscription agreement, pursuant to which Kien Huat purchased 200 shares of Series F Preferred Stock for an consideration of $20 million and net proceeds to the Company (after deducting a $200,000 funding fee due to Kien Huat) of $19.8 million.

2019 Moelis Letter Agreement

On February 15, 2019, the Company and Moelis entered into a letter agreement (the “2019 Moelis Letter Agreement”), pursuant to which Moelis will act as the Company’s financial advisor to review and analyze the Company's historical results, financial projections and business plan, conduct a business and financial analysis of the Company's prospective online gaming and sports betting business, and evaluate the capital structure of the Company and/or its subsidiaries. Pursuant to the 2019 Moelis Letter Agreement, we paid Moelis a general advisory fee of approximately $350,000 upon execution of the agreement.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2017

SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract]

Schedule II - Valuation and Qualifying Accounts

Schedule II—Valuation and Qualifying Accounts

Empire Resorts, Inc. and Subsidiaries

Valuation and Qualifying Accounts

December 31, 2018, 2017 and 2016

(in thousands)

Description	Balance at beginning of year		Addition charged to costs and expenses		Other additions (deductions)		Less deductions			Balance at end of year
Year ended December 31, 2018
Allowance for doubtful accounts	$	171	$	69	$	—	$	(90	)	$	150
Deferred tax asset valuation allowance	$	71,208	$	35,170	$	—	$	—		$	106,378
Year ended December 31, 2017
Allowance for doubtful accounts	$	171	$	—	$	—	$	—		$	171
Deferred tax asset valuation allowance	$	88,934	$	17,492	$	—	$	(35,218	)	$	71,208
Year ended December 31, 2016
Allowance for doubtful accounts	$	171	$	—	$	—	$	—		$	171
Deferred tax asset valuation allowance	$	86,092	$	—	$	2,842	$	—		$	88,934

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Principles of consolidation

Principles of consolidation

The consolidated financial statements include Empire’s accounts and their wholly-owned subsidiaries. All inter-company balances and transactions are eliminated in consolidation.

Estimates and assumptions

Estimates and assumptions

The preparation of financial statements in conformity with generally accepted accounting principles ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from estimates.

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 years ended December 31, 2017 and 2016 have not been adjusted to reflect the impact of the ASC Topic 606. This approach does not significantly impact the comparability of the 2018, 2017 and 2016 amounts. The promotional allowances recorded in 2017 and 2016 are no longer presented separately in 2018 under ASC Topic 606. The adoption of the provisions of ASC 606 resulted in an increase of $54,000 to both “Accrued expenses and other current 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.

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 current liabilities” in our consolidated balance sheets.

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 are recognized as collected, due to uncertainty of receipt and timing of payments.

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 condensed consolidated statements of operations.

Cash and cash equivalents

Cash and cash equivalents

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.

Restricted cash and cash equivalents

Restricted cash and cash equivalents

The Company has several types of restricted cash accounts. These restrictions are in accordance with the NYSGC regulations. In addition, at December 31, 2018, the Company had restricted cash and cash equivalents of $21 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:

	December 31, 2018	December 31, 2017	December 31, 2016
	(in thousands)
Cash and cash equivalents	$28,338	$10,380	$11,012
Restricted cash	373	693	1,078
Restricted cash and cash equivalents for Development Projects	21,039	41,982	26,384
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$49,750	$53,055	$38,474

The Company has three types of restricted cash accounts.

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 collectability 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 collectability. 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.

Property and equipment

Property and equipment

Property and equipment is stated at cost less accumulated depreciation. The Company provides for depreciation on property and equipment used by applying the straight-line method over the following estimated useful lives:

Assets	Estimated Useful Lives
Vehicles	5-10 years
Furniture, fixtures and equipment	5-10 years
Land improvements	5-20 years
Building improvements	5-40 years
Buildings	40 years

Deferred financing costs

Debt issuance costs

Debt issuance costs are amortized using the effective interest method over the term of the related debt. The amortization is included within interest expense and is included as a component of the capitalized interest costs.

Impairment of long-lived assets

Impairment of long-lived assets and other financial assets

The Company periodically reviews the carrying value of its long-lived assets in relation to historical results, as well as management’s best estimate of future trends, events and overall business climate. If such reviews indicate an issue as to whether the carrying value of such assets may not be recoverable, the Company will then estimate the future cash flows generated by such assets (undiscounted and without interest charges). If such future cash flows are insufficient to recover the carrying amount of the assets, then impairment is triggered and the carrying value of any impaired assets would then be reduced to fair value.

Common stock - loss per 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 years ended December 31, 2018, 2017 and 2016 were the same.

Derivatives Liabilities and Asset

Derivative Liability and Asset

The Company’s Collaboration Agreement with bet365 (see Note I) along with the related Common Stock Purchase Agreement contained an initial put option that met the definition of a derivative instrument and a freestanding contingent forward instrument. The Company classified the initial put option as a long-term liability on its consolidated balance sheet. Also, because, bet365 has or will be obligated to purchase shares of the Company’s common stock at a strike price less than the expected equity value once bet365’s Online Sportsbook Services is approved in New York State, we have classified the freestanding contingent forward instrument as a long-term asset in the Consolidated Balance Sheet. The derivative liability and the contingent forward asset were initially recorded at fair value upon the effective date of the Collaboration Agreement and will be subsequently remeasured to fair value at each reporting date. Changes in the fair value of the derivative liability and long-term asset will be recognized as a component of "other income (expense), net" in the consolidated statement of operations.

Fair value

Fair Value of Financial Assets and Liabilities

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, long-term debt, contingent forward contracts, derivative instruments,and a guaranty liability. Current assets, investments and current liabilities approximate fair value due to their short-term nature.

Advertising

Advertising

The Company records in selling, general and administrative expense the costs of general advertising, promotion and marketing programs at the time those costs are incurred.

Stock-based compensation

Stock-based compensation

The cost of all share-based awards to employees, including grants of restricted stock and restricted stock units, is recognized in the financial statements based on the fair value of the awards at grant date. 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.

Segment Reporting

Segment Reporting

The Company maintains discrete financial information for each of its operating companies, which is used by the Chief Executive Officer (the "CEO") as the basis for allocating resources. Each company has been identified as an operating segment and meets the criteria for aggregation due to similar economic characteristics as all of the companies provide similar resort services and shares similar processes for delivering services. Our companies have a high degree of similarity in the workforces and target similar patron groups. Accordingly, based on these economic and operational similarities and the way the CEO monitors and makes decisions, the Company has concluded that its operating segments may be aggregated and that it has one reportable segment.

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"). "). This ASU will require lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use (“ROU”) 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 adopted the standard on January 1, 2019 and will apply the package of practical expedients available to it upon adoption.  The Company expects that the most significant impact on our consolidated balance sheets will be the recognition of ROU assets and lease liabilities for operating leases that exist at the date of adoption, with the most material of such leases being ground leases.

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)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Disaggregation of revenue

Complimentary food and beverage revenues, and complimentary room revenues for the years ended December 31, 2018 and 2017, respectively, were as follows:

	Year ended December 31,
	2018	2017
	(in thousands)
Complimentary food and beverage revenues	$10,837	$1,000
Complimentary room revenues	3,455	—

Summary of retail value amounts included in promotional allowances

The retail value amounts included in promotional allowances for the years ended December 31, 2017 and 2016 were as follows:

	Year ended December 31,
	2017	2016
	(in thousands)
Food and beverage	$1,000	$1,486
Non-subsidized free play	2,718	978
Players Club awards	324	383
Total retail value of promotional allowances	$4,042	$2,847

Summary of estimated cost of providing complimentary food, beverages and other items

The estimated cost of providing complimentary food, beverages and other items for the years ended December 31, 2017, and 2016 were as follows:

	Year ended December 31,
	2017	2016
	(in thousands)
Food and beverage	$1,750	$2,080
Non-subsidized free play	1,603	577
Players Club awards	324	383
Total cost of promotional allowances	$3,677	$3,040

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:

	December 31, 2018	December 31, 2017	December 31, 2016
	(in thousands)
Cash and cash equivalents	$28,338	$10,380	$11,012
Restricted cash	373	693	1,078
Restricted cash and cash equivalents for Development Projects	21,039	41,982	26,384
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$49,750	$53,055	$38,474

Summary of useful lives for property, plant and equipment

The Company provides for depreciation on property and equipment used by applying the straight-line method over the following estimated useful lives:

Assets	Estimated Useful Lives
Vehicles	5-10 years
Furniture, fixtures and equipment	5-10 years
Land improvements	5-20 years
Building improvements	5-40 years
Buildings	40 years

Property and equipment are comprised of the following at December 31, 2018 and 2017:

	12/31/2018		12/31/2017
	(in thousands)
Land	$770		$770
Land improvements	2,382		1,759
Buildings	622,043		4,727
Building improvements	103,621		29,874
Furniture, fixtures and equipment	10,954		5,551
Construction in Progress	2,784		77
	742,554		42,758
Less: Accumulated depreciation	(44,875	)	(15,895	)
	$697,679		$26,863

Summary of the approximate number of common stock equivalents outstanding

The following table shows the approximate number of common stock equivalents outstanding at December 31, 2018, 2017 and 2016 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 years ended December 31, 2018, 2017 and 2016, because their inclusion would have been anti-dilutive:

	Outstanding at December 31,
	2018	2017	2016
Unvested Restricted stock	37,000	139,000	216,000
Warrants	193,000	133,000	133,000
Restricted stock units ("RSUs")	196,000	73,000	—
Option Matching Rights	—	3,000	21,000
Options	—	13,000	34,000
Total	426,000	361,000	404,000

Summary of fair values, assets

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:

	December 31, 2018		December 31, 2017
	Carrying Amount	Fair Value	Carrying Amount		Fair Value	Level of Fair Value Hierarchy
Assets:	(in thousands)
Cash and cash equivalents	$28,338	$28,338	$10,380		$10,380	Level 1
Restricted cash	373	373	693		693	Level 1
Interest Rate Cap	143	143	251		251	Level 2
Restricted cash, cash equivalents and investments for Development Projects:
Cash and cash equivalents	21,039	21,039	41,982		41,982	Level 1
Short-term investments	—	—	94,449		94,209	Level 2
Other assets:
Non-derivative financial asset - Series F Preferred Stock, redeemable	31,122	31,122	—		—	Level 2
Contingent forward contract - bet365	1,865	1,865	—		—	Level 3
Liabilities:
Term B Loan, net of discount	440,803	440,660	443,161		449,749	Level 2
Term A Loan	64,750	64,750	—		—	Level 2
Bangkok Bank Loan	20,000	20,000	16,000		16,000	Level 3
Revolving Credit Facility	15,000	15,000	—		—	Level 2
Long-term loan, related party, net of debt issuance costs	30,954	30,954	—		—	Level 3
Equipment loans	20,384	20,384	31,095		31,095	Level 3
Guaranty liability - MHHA agreement	2,300	2,300	—	—		Level 2
Derivative liability - bet365	879	879	—		—	Level 3

Summary of fair values, liabilities

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:

	December 31, 2018		December 31, 2017
	Carrying Amount	Fair Value	Carrying Amount		Fair Value	Level of Fair Value Hierarchy
Assets:	(in thousands)
Cash and cash equivalents	$28,338	$28,338	$10,380		$10,380	Level 1
Restricted cash	373	373	693		693	Level 1
Interest Rate Cap	143	143	251		251	Level 2
Restricted cash, cash equivalents and investments for Development Projects:
Cash and cash equivalents	21,039	21,039	41,982		41,982	Level 1
Short-term investments	—	—	94,449		94,209	Level 2
Other assets:
Non-derivative financial asset - Series F Preferred Stock, redeemable	31,122	31,122	—		—	Level 2
Contingent forward contract - bet365	1,865	1,865	—		—	Level 3
Liabilities:
Term B Loan, net of discount	440,803	440,660	443,161		449,749	Level 2
Term A Loan	64,750	64,750	—		—	Level 2
Bangkok Bank Loan	20,000	20,000	16,000		16,000	Level 3
Revolving Credit Facility	15,000	15,000	—		—	Level 2
Long-term loan, related party, net of debt issuance costs	30,954	30,954	—		—	Level 3
Equipment loans	20,384	20,384	31,095		31,095	Level 3
Guaranty liability - MHHA agreement	2,300	2,300	—	—		Level 2
Derivative liability - bet365	879	879	—		—	Level 3

Schedule of derivative assets at fair value

The fair value of the derivative liabilities and asset was determined using a Monte Carlo simulation valuation approach with the following assumptions:

	Derivative Liability - bet365	Contingent forward contract - bet365
Equity value	$29.48	$29.48
Strike price	$20.00	$20.00
Expected term	3.46 years	3.13 years
Volatility	61%	62%
Risk-free rate	2.9%	2.9%
Dividend yield	—%	—%

The following table provides a roll forward of the aggregate fair values of the Company’s derivative liabilities and asset, for which fair value is determined using Level 3 inputs (in thousands):

	Derivative Liability - bet365	Contingent forward contract -bet365
Balance as of December 31, 2017	$0	$0
Initial fair value of derivative (liability) asset in connection with Collaboration Agreement	$(879)	$1,865
Change in fair value	$0	$0
Balance as of December 31, 2018	$(879)	$1,865

Schedule of derivative liabilities at fair value

The fair value of the derivative liabilities and asset was determined using a Monte Carlo simulation valuation approach with the following assumptions:

	Derivative Liability - bet365	Contingent forward contract - bet365
Equity value	$29.48	$29.48
Strike price	$20.00	$20.00
Expected term	3.46 years	3.13 years
Volatility	61%	62%
Risk-free rate	2.9%	2.9%
Dividend yield	—%	—%

The following table provides a roll forward of the aggregate fair values of the Company’s derivative liabilities and asset, for which fair value is determined using Level 3 inputs (in thousands):

	Derivative Liability - bet365	Contingent forward contract -bet365
Balance as of December 31, 2017	$0	$0
Initial fair value of derivative (liability) asset in connection with Collaboration Agreement	$(879)	$1,865
Change in fair value	$0	$0
Balance as of December 31, 2018	$(879)	$1,865

Schedule of derivative instruments

The fair value of the guaranty liability recognized in connection with the Company’s agreement with MHHA (see Note J) was determined based on significant inputs that are observable and quoted prices in active markets for similar liabilities, which represents a Level 2 measurement within the fair value hierarchy. The fair value of the derivative liability was determined using a Black Scholes valuation approach with the following assumptions:

	Guaranty Liability - MHHA Horsemen
Equity value	$10.13
Strike price	$27.50
Expected term	6.11 years
Volatility	68%
Risk-free rate	2.6%
Dividend yield	—%

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Prepaid Expenses and Other Assets (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2018 and 2017:

	12/31/2018	12/31/2017
	(in thousands)
Receivable from New York State	$3,422	$814
Prepaid real estate taxes	284	443
Prepaid insurance	392	327
Prepaid advertising	23	—
Prepaid supplies	1,528	—
Prepaid gaming expenses	773	74
Prepaid maintenance contracts	657	476
Development escrow and refundable security deposit	572	780
Prepaid other	375	462
Total prepaid expenses and other current assets	$8,026	$3,376

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Property and Equipment

The Company provides for depreciation on property and equipment used by applying the straight-line method over the following estimated useful lives:

Assets	Estimated Useful Lives
Vehicles	5-10 years
Furniture, fixtures and equipment	5-10 years
Land improvements	5-20 years
Building improvements	5-40 years
Buildings	40 years

Property and equipment are comprised of the following at December 31, 2018 and 2017:

	12/31/2018		12/31/2017
	(in thousands)
Land	$770		$770
Land improvements	2,382		1,759
Buildings	622,043		4,727
Building improvements	103,621		29,874
Furniture, fixtures and equipment	10,954		5,551
Construction in Progress	2,784		77
	742,554		42,758
Less: Accumulated depreciation	(44,875	)	(15,895	)
	$697,679		$26,863

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Accrued Expenses and Other Current Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Payables and Accruals [Abstract]

Accrued expenses and other current liabilities

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

	12/31/2018	12/31/2017
	(in thousands)
Liability for horseracing purses	$868	$886
Accrued payroll	8,142	1,715
Accrued marketing	5,298	52
Accrued interest expense	5,033	14
Accrued redeemable points and deferred revenues	2,202	271
Liability to NYSGC	2,816	1,507
Liability for local progressive jackpot	2,560	1,110
Accrued premium game leases	1,288	—
Accrued professional fees	2,337	744
Federal tax withholding payable	561	81
Accrued other	2,573	940
Total accrued expenses and other current liabilities	$33,678	$7,320

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Long-Term Debt (Tables)

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Schedule of Long-Term Debt Instruments

Long-term debt, other than related party debt, consisted of the following at December 31, 2018 and 2017:

	12/31/2018		12/31/2017
	(in thousands)
Term B Loan (net of unamortized discount)	$440,803		$443,161
Term A Loan	64,750		—
Bangkok Bank Loan	20,000		16,000
Revolving Credit Facility	15,000		—
Equipment loans	20,384		31,095
Total long-term debt	560,937		490,256
Debt issuance costs	(17,240	)	(20,520	)
Total long-term debt, net	543,697		469,736
Less: Current portion of long-term debt	(48,004	)	(14,588	)
Long-term debt, net of current portion	$495,693		$455,148

Contractual Obligation, Fiscal Year Maturity Schedule

The following table lists the annual principal repayments due for the Company's long term debt, other than Related Party Debt, as of December 31, 2018:

Year ending December 31,	Totals
	(in thousands)
2019	$48,004
2020	20,690
2021	15,815
2022	53,625
2023	428,625
Totals	$566,759

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Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Stock Option Activity

The following table reflects stock option activity in 2018, 2017 and 2016:

	Number of shares		Range of exercise prices per share	Weighted average exercise price per share		Weighted average remaining contractual life (years)
Options outstanding at December 31, 2015	56,600		$7.95 - $131.10	$	48.50	2.61
Options exercised in 2016	(18,000	)	$7.95-$9.90
Forfeited in 2016	(5,000	)	$14.85 -$82.95
Options outstanding at December 31, 2016	33,600		$7.95 - $131.10	$	68.92	1.11
Options exercised in 2017	(2,000	)	$7.95
Forfeited in 2017	(18,300	)	$14.85 -$131.10
Options outstanding at December 31, 2017	13,300		$15.00 - $40.05	$	26.03	0.74
Options exercised in 2018	(1,700	)	$15.00
Forfeited in 2018	(11,600	)	$24.75 -$40.05
Options outstanding at December 31, 2018	—		—	$	—	—

Schedule of Restricted Stock and Restricted Stock Units Activity

The following table reflects restricted stock and restricted stock unit activity in 2018, 2017 and 2016:

	Number of Restricted Shares		Number of Restricted Stock Units
Outstanding at December 31, 2015	137,000		—
Grants in 2016	105,000		—
Vested in 2016	(22,000	)	—
Forfeited in 2016	(4,000	)	—
Outstanding at December 31, 2016	216,000		—
Grants in 2017	1,000		74,500
Vested in 2017	(55,000	)	—
Forfeited in 2017	(22,000	)	(1,600	)
Outstanding at December 31, 2017	140,000		72,900
Grants in 2018	—		161,200
Vested in 2018	(56,500	)	(18,600	)
Forfeited in 2018	(46,000	)	(20,000	)
Outstanding at December 31, 2018	37,500		195,500

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Income Taxes Income Taxes (Tables)

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Schedule of Deferred Tax Assets and Liabilities

At December 31, 2018 and 2017, the estimated deferred income tax assets and liability were comprised of the following:

	12/31/2018			12/31/2017
	(in thousands)
Deferred tax assets:
Net operating loss carryforwards	$87,181			$40,502
Stock—based compensation	1,911			2,097
Development costs	619			27,213
Deferred interest	11,494			—
Deferred compensation	590			68
Depreciation	5,604			376
Other	907			952
	108,306			71,208
Deferred tax liability:
Depreciation	(2,037		)	—
Net deferred tax assets	106,269			71,208
Valuation allowance	(106,378		)	(71,208		)
Deferred tax liability, net	$	(109	)	$	—

Schedule of Effective Income Tax Rate Reconciliation

The following is a reconciliation of the federal statutory tax rate to the Company’s effective tax rate:

	Year ended December 31,
	2018		2017		2016
Tax provision at federal statutory tax rate	21.0	%	35.0	%	35.0	%
Non-deductible interest	—	%	—	%	(0.3	)%
Permanent items	(0.3	)%	(3.1	)%	(3.5	)%
Tax reform	(0.1	)%	—	%	—	%
Change in valuation allowance	(20.7	)%	(31.9	)%	(31.2	)%
Effective tax rate	(0.1	)%	—	%	—	%

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1)	$7,500
2020 (1)	7,500
2021 (1)	8,000
2022 (1)	8,100
2023 (1)	8,100
2024 to 2056 (1)	$338,424

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

The following table represents the minimum lease payments:

Year ending December 31,	Total Payments
	(in thousands)
2019	$10,382
2020	9,026
2021	8,503
2022	8,400
2023	8,400
2024 to 2056	353,449
Total	$398,160

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 December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1) (2)	$63
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 (2)	150
2024 to 2056 (2) (3)	$7,483

(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 is $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.

ixed rent payments under the Alder Lease at December 31, 2018:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2019 (1) (2)	$150
2020 (2)	150
2021 (2)	150
2022 (2)	150
2023 (2)	150
2024 to 2056 (2) (3)	$7,542

(1) From the date the Alder Lease commenced (the “Alder Lease Commencement Date”) and until the date on which The Alder opened for business, which was January 1, 2019 (the “Alder Opening Date”), fixed rent payments were $0.

(2) From the Alder 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 Alder Lease, fixed rent will equal $250,000 per year.

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Summarized Quarterly Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

Condensed Financial Information Disclosure [Abstract]

Condensed Financial Statements

The following table summarizes the quarterly results of operations for the year ended December 31, 2017:

	Fiscal Quarter
	Quarter 1		Quarter 2		Quarter 3		Quarter 4
2017	(in thousands, except per share data)
Net revenues	$14,769		$17,186		$18,713		$15,183
Loss from operations	(6,356	)	(6,830	)	(6,844	)	(9,887	)
Net loss	(11,451	)	(11,916	)	(10,872	)	(12,105	)
Loss per common share:
Loss per common share, basic	$(0.37)		$(0.39)		$(0.35)		$(0.39)
Loss per common share, diluted	$(0.37)		$(0.39)		$(0.35)		$(0.39)

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Summary of Significant Accounting Policies - Additional Information (Details)		1 Months Ended	12 Months Ended
	Feb. 25, 2016 USD ($)	Feb. 28, 2017 USD ($)	Dec. 31, 2018 USD ($) restricted_cash_account shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($) shares	Sep. 30, 2018 shares	Jun. 30, 2018 shares	Mar. 31, 2018 shares	Mar. 15, 2018 shares	Feb. 28, 2018 USD ($)	Jan. 24, 2018 shares	Jan. 01, 2018 USD ($)	Feb. 17, 2016 shares
Restricted Cash and Cash Equivalents Items [Line Items]
Adoption of ASC 606												$ 54,000
Common stock, shares issued (shares) | shares			34,403,250	32,559,617		32,717,000	32,717,000	32,560,000
Number of shares that may be purchased by warrants (shares) | shares			60,000						60,000
Options exercised, shares | shares			1,700	2,000	18,000
Short-term Investments, Fair Value Disclosure			$ 94,200,000
Restricted cash and cash equivalents for Development Projects				$ 11,200,000
Accrued rent			$ 8,100,000	$ 8,300,000
Gaming Facility License Term				10 years
Number of restricted cash accounts | restricted_cash_account			3
Uninsured cash amounts			$ 223,000
Restricted cash and cash equivalents for Development Projects			21,039,000	$ 41,982,000	$ 26,384,000
Restricted cash and investments for Development Projects			21,039,000	136,431,000
Allowance for doubtful accounts			150,000	171,000
Interest charges capitalized			12,300,000	29,100,000
Number of securities declined to exercise (in shares) | shares					204,706
Advertising expense			11,000,000	1,400,000	$ 1,100,000
Total unrecognized compensation			$ 2,200,000
Vesting period for unrecognized compensation cost to be recognized (in years)			2 years 6 months
Accumulated other comprehensive loss			$ 219,000	315,000
Restricted Cash Equivalents, Noncurrent				30,700,000
Short-term marketable securities			94,500,000	94,500,000
Contract with Customer, Liability, Current				1,500,000
Other Deferred Compensation Arrangements, Liability, Classified, Noncurrent			2,300,000
New York State Racing, Pari-Mutual Wagering And Breeding Law [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents			18,000	25,000
VGM New York Governing Law [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents			205,000	343,000
Monticello Harness Horsemens Association [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents			150,000	324,000
Option Matching Rights [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Number of shares that may be purchased by warrants (shares) | shares											1,666
Number of securities declined to exercise (in shares) | shares													204,706
Montreign [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Gaming Facility License Fee	$ 51,000,000
Term Loan Facility, Term B Loan [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents for Development Projects			21,000,000
Payments of Debt Restructuring Costs		$ 700,000
Other Assets, Fair Value Disclosure			143,000	251,000
Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | Montreign Operating [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Debt Instrument, Fair Value Disclosure			440,700,000	449,700,000
Long-term Line of Credit			446,600,000	450,000,000
ASC 606
Restricted Cash and Cash Equivalents Items [Line Items]
Adoption of ASC 606												$ 54,000
Contract with Customer, Liability, Noncurrent			$ 2,100,000
Kien Huat Realty III Limited [Member] | Kien Huat Realty III Limited Investment Agreement [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Common stock, shares issued (shares) | shares			200,000
License [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Finite-Lived Intangible Assets, Accumulated Amortization										$ 5,800,000
Amortization			$ 6,300,000
Finite-Lived Intangible Assets, Remaining Amortization Period			7 years
Commercial Paper [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Short-term marketable securities				59,400,000
US Treasury Notes Securities [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Short-term marketable securities				$ 35,100,000
Initial Put Option [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Derivative Liability			$ 900,000

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Summary of Significant Accounting Policies - Promotional Allowances (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Promotional Allowance	$ 4,042	$ 2,847
Total cost of promotional allowances	3,677	3,040
Food and Beverage
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Promotional Allowance	1,000	1,486
Total cost of promotional allowances	1,750	2,080
Non Subsidized Free Play
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Promotional Allowance	2,718	978
Total cost of promotional allowances	1,603	577
Players Club Awards
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Promotional Allowance	324	383
Total cost of promotional allowances	$ 324	$ 383

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Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Complimentary food and beverage revenues	$ 10,837	$ 1,000
Complimentary room revenues	$ 3,455	$ 0

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Summary of Significant Accounting Policies - Reconciliation of Cash and Cash Equivalents (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Accounting Policies [Abstract]
Cash and cash equivalents	$ 28,338				$ 10,380	$ 11,012
Restricted cash	373				693	1,078
Restricted cash and cash equivalents for Development Projects	21,039				41,982	26,384
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$ 49,750	$ 83,070	$ 40,141	$ 64,643	$ 53,055	$ 38,474	$ 23,225

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Summary of Significant Accounting Policies - Property and Equipment (Details)	12 Months Ended
	Dec. 31, 2017
Vehicles [Member] | Minimum
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	5 years
Vehicles [Member] | Maximum
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	10 years
Furniture, fixtures and equipment [Member] | Minimum
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	5 years
Furniture, fixtures and equipment [Member] | Maximum
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	10 years
Land Improvements [Member] | Minimum
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	5 years
Land Improvements [Member] | Maximum
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	20 years
Building Improvements [Member] | Minimum
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	5 years
Building Improvements [Member] | Maximum
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	40 years
Building [Member]
Property, Plant and Equipment [Line Items]
Useful life of property and equipment (in years)	40 years

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Summary of Significant Accounting Policies - Stock option equivalents (Details) - shares shares in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	426	361	404
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	0	13	34
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	193	133	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)	196	73	0
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	21
Restricted stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	37	139	216

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Summary of Significant Accounting Policies - Fair Value of Financial Instruments Measured on Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 28,338	$ 10,380	$ 11,012
Restricted cash	373	693	1,078
Restricted cash and investments for Development Projects	21,039	136,431
Restricted cash and cash equivalents for Development Projects	21,039	41,982	$ 26,384
Short-term marketable securities	94,500	94,500
Short-term Investments, Fair Value Disclosure	94,200
Long-term Debt	543,697	469,736
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		10,380
Cash and Cash Equivalents, Fair Value Disclosure	28,338	10,380
Restricted cash		693
Restricted Cash and Cash Equivalents, Current, Fair Value Disclosure	373	693
Restricted cash and cash equivalents for Development Projects		41,982
Restricted Cash, Noncurrent, Fair Value Disclosure	21,039	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 marketable securities	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	30,954	0
Notes Payable, Related Parties	30,954	0
Bangkok Bank 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]
Lines of Credit, Fair Value Disclosure	20,000	16,000
Long-term Line of Credit	20,000	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	15,000	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	20,400	31,100
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	20,384	31,095
Lines of Credit, Fair Value Disclosure	20,384	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	143	251
Forward Contracts [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]
Derivative Asset	1,865	0
Initial Put Option [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative Liability	900
Initial Put Option [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]
Derivative Liability	879	0
Put Option MHHA [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 Liability	2,300	0
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	440,803	443,161
Notes Payable, Fair Value Disclosure	440,660	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	64,750	0
Notes Payable, Fair Value Disclosure	64,750	0
Commercial Paper [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term marketable securities		59,400
US Treasury Notes Securities [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Short-term marketable securities		35,100
Series F | Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Financial Instruments, Owned, at Fair Value	$ 31,122	$ 0

XML

Summary of Significant Accounting Policies Summary of Significant Accounting Policies - Derivatives (Details) $ in Thousands	12 Months Ended
	Dec. 31, 2018 USD ($) $ / derivative_instrument
Initial Put Option [Member]
Derivative [Line Items]
Derivative, Equity Value | $ / derivative_instrument	10.13
Derivative, Average Price Risk Option Strike Price | $ / derivative_instrument	27.50
Derivative, Term of Contract	6 years 1 month 10 days
Contingent Put Option [Member]
Derivative [Line Items]
Derivative, Term of Contract	3 years 1 month 17 days
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative, ending balance	$ 400
Forward Contracts [Member]
Derivative [Line Items]
Derivative, Equity Value | $ / derivative_instrument	29.48
Derivative, Average Price Risk Option Strike Price | $ / derivative_instrument	20.00
Derivative, Term of Contract	3 years 1 month 17 days
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative, ending balance	$ 1,900
Initial Put Option [Member]
Derivative [Line Items]
Derivative, Equity Value | $ / derivative_instrument	29.48
Derivative, Average Price Risk Option Strike Price | $ / derivative_instrument	20.00
Derivative, Term of Contract	3 years 5 months 16 days
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative, ending balance	$ 900
Measurement Input, Price Volatility [Member] | Initial Put Option [Member]
Derivative [Line Items]
Derivative Liability, Measurement Input	0.68
Measurement Input, Price Volatility [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative Asset, Measurement Input	0.62
Measurement Input, Price Volatility [Member] | Initial Put Option [Member]
Derivative [Line Items]
Derivative Liability, Measurement Input	0.61
Measurement Input, Risk Free Interest Rate [Member] | Initial Put Option [Member]
Derivative [Line Items]
Derivative Liability, Measurement Input	0.026
Measurement Input, Risk Free Interest Rate [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative Asset, Measurement Input	0.029
Measurement Input, Risk Free Interest Rate [Member] | Initial Put Option [Member]
Derivative [Line Items]
Derivative Liability, Measurement Input	0.029
Measurement Input, Expected Dividend Rate [Member] | Initial Put Option [Member]
Derivative [Line Items]
Derivative Liability, Measurement Input	0.000
Measurement Input, Expected Dividend Rate [Member] | Forward Contracts [Member]
Derivative [Line Items]
Derivative Asset, Measurement Input	0.000
Measurement Input, Expected Dividend Rate [Member] | Initial Put Option [Member]
Derivative [Line Items]
Derivative Liability, Measurement Input	0.000
Fair Value, Inputs, Level 3 [Member] | Forward Contracts [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative, beginning balance	$ 0
Initial fair value of derivative (liability) asset in connection with Collaboration Agreement	1,865
Change in fair value	0
Fair value of derivative, ending balance	1,865
Fair Value, Inputs, Level 3 [Member] | Initial Put Option [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward]
Fair value of derivative, beginning balance	0
Initial fair value of derivative (liability) asset in connection with Collaboration Agreement	879
Change in fair value	0
Fair value of derivative, ending balance	$ 879

XML

Prepaid Expenses and Other Assets - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Refund reduction percent	20.00%
Refunds for real estate taxes paid	$ 800
Prepaid taxes	3,422	$ 800
Prepaid Supplies, Uniforms	600
Prepaid Supplies, Linens	400
Prepaid Supplies, Gaming Chips	400
Slot Machine and Table Gaming License Fees	$ 600

XML

Prepaid Expenses and Other Assets - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Receivable from New York State	$ 3,422	$ 814
Prepaid real estate taxes	284	443
Prepaid insurance	392	327
Prepaid advertising	23	0
Prepaid supplies	1,528	0
Prepaid gaming expenses	773	74
Prepaid maintenance contracts	657	476
Development escrow and refundable security deposit	572	780
Prepaid other	375	462
Total prepaid expenses and other current assets	$ 8,026	$ 3,376

XML

Property and Equipment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Project Development Costs Incurred Transferred to Property and Equipment	$ 699,800
Capitalized project development costs	5,700	$ 566,800
Property and equipment, gross	742,554	42,758
Less: Accumulated depreciation	(44,875)	(15,895)
Property and equipment, net	697,679	26,863
Depreciation	28,993	1,517	$ 1,341
Construction Manager Costs [Member]
Property, Plant and Equipment [Line Items]
Capitalized project development costs	4,200	560,200
Architectural, Engineering, Construction Manager, and Subcontractor [Member]
Property, Plant and Equipment [Line Items]
Capitalized project development costs	1,500	6,600
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	770	770
Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	2,382	1,759
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	622,043	4,727
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	103,621	29,874
Furniture, fixtures and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	10,954	5,551
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross	$ 2,784	$ 77

XML

Development Projects Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Sep. 30, 2018	Jan. 04, 2018	Dec. 28, 2017	Jun. 30, 2017	Feb. 29, 2016
Development Costs [Line Items]
Capitalized project development costs	$ 5,700	$ 566,800
Deposit Asset, Percent of Minimum Capital Investment Expended for Deposit Return						85.00%
Investment Returned after Requirement Met					$ 35,000
Restricted cash and cash equivalents for Development Projects	21,039	41,982	$ 26,384
Project development costs incurred	150,200	392,200
Deposit assets							$ 20,000	$ 15,000
Capitalized project development costs, period increase	137,600	370,700
Development Projects	12,574	21,558	12,970
Cash and cash equivalents	28,338	10,380	11,012
Short-term marketable securities	94,500	94,500
Construction Manager Costs [Member]
Development Costs [Line Items]
Capitalized project development costs	4,200	560,200
Architectural, Engineering, Construction Manager, and Subcontractor [Member]
Development Costs [Line Items]
Capitalized project development costs	1,500	6,600
Golf Course Project [Member]
Development Costs [Line Items]
Capitalized project development costs				$ 21,200
Land Lease Expense [Member]
Development Costs [Line Items]
Project development costs incurred	10,400	10,700	10,400
Salary and Related Benefits [Member]
Development Costs [Line Items]
Project development costs incurred		4,900
Bank Charges [Member]
Development Costs [Line Items]
Project development costs incurred		2,000
Selling and Marketing Expense [Member]
Development Costs [Line Items]
Project development costs incurred		900
Property Tax Expense [Member]
Development Costs [Line Items]
Project development costs incurred	400	600	400
Insurance Expense [Member]
Development Costs [Line Items]
Project development costs incurred	500	600	500
Professional Services [Member]
Development Costs [Line Items]
Project development costs incurred	300	600	300
Legal Expense [Member]
Development Costs [Line Items]
Project development costs incurred	200	300	200
Pre-opening Expense [Member]
Development Costs [Line Items]
Project development costs incurred	1,200	500	$ 1,200
Development Projects [Member] | Transferable Subscription Rights [Member]
Development Costs [Line Items]
Restricted cash and cash equivalents for Development Projects	20,100	$ 136,400
Cash and cash equivalents	41,900
Short-term marketable securities	$ 94,500

XML

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Accrued Development Projects costs	$ 4,922	$ 71,713	$ 40,783
Liability for horseracing purses	868	886
Accrued payroll	8,142	1,715
Accrued marketing	5,298	52
Accrued interest expense	5,033	14
Accrued redeemable points and deferred revenues	2,202	271
Liability to NYSGC	2,816	1,507
Liability for local progressive jackpot	2,560	1,110
Accrued premium game leases	1,288	0
Accrued professional fees	2,337	744
Federal tax withholding payable	561	81
Accrued other	2,573	940
Total accrued expenses and other current liabilities	$ 33,678	$ 7,320

XML

Long-Term Debt - Schedule of Long-Term Debt Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt, gross	$ 560,937	$ 490,256
Debt issuance costs	(17,240)	(20,520)
Total long-term debt, net	543,697	469,736
Less: Current portion of long-term debt	(48,004)	(14,588)
Long-term debt, net of current portion	495,693	455,148
Term Loan Facility, Term B Loan [Member]
Debt Instrument [Line Items]
Long-term debt, gross	440,803	443,161
Term Loan Facility, Term A Loan [Member]
Debt Instrument [Line Items]
Long-term debt, gross	64,750	0
Bangkok Bank Loan [Member]
Debt Instrument [Line Items]
Long-term debt, gross	20,000	16,000
Revolving Credit Agreement [Member]
Debt Instrument [Line Items]
Long-term debt, gross	15,000	0
Equipment Loans [Member]
Debt Instrument [Line Items]
Long-term debt, gross	20,384	31,095
Total long-term debt, net	$ 20,400	$ 31,100

XML

Long-Term Debt - Term Loan Agreement (Details) - USD ($)			12 Months Ended
	May 26, 2017	Jan. 24, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	May 31, 2018	Mar. 23, 2018	Mar. 01, 2018	Dec. 28, 2017
Debt Instrument [Line Items]
Debt Instrument, Covenant, Additional Capital Lease Obligation and Purchase Money Indebtedness Maximum		$ 40,000,000
Debt Instrument, Covenant, Additional Other Indebtedness, Maximum		$ 10,000,000
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
Long-term Debt			$ 543,697,000	$ 469,736,000
Term Loan Facility, Term A Loan [Member]
Debt Instrument [Line Items]
Proceeds from issuance of debt			70,000,000	0	$ 0
Term Loan Facility, Term B Loan [Member]
Debt Instrument [Line Items]
Proceeds from issuance of debt			$ 0	441,871,000	$ 0
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility [Member]
Debt Instrument [Line Items]
Borrowing capacity, amount		$ 520,000,000
Debt Instrument, Covenant, Maximum First Lien Leverage Ratio		500.00%
Debt Instrument, Covenant, Minimum Interest Coverage Ratio		200.00%
Debt Instrument, Covenant, Maximum Consolidated Capital Expenditure		$ 11,000,000
Allowed Add Back of Pro Forma EBITDA, First Quarter		108,400,000
Allowed Add Back of Pro Forma EBITDA, Second Quarter		77,500,000
Allowed Add Back of Pro Forma EBITDA, Third Quarter		39,400,000
Montreign Operating [Member] | Notes Payable to Banks [Member] | Term Loan Facility, Term A Loan [Member]
Debt Instrument [Line Items]
Unused borrowing capacity, amount		$ 70,000,000
Stated percentage			7.68%
Commitment fee percent, through closing date		2.50%
Commitment fee percent, after closing date		5.00%
Long-term Debt			$ 64,800,000	0
Debt Instrument, Repayment Percent of Principal			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			5,300,000
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]
Debt Instrument, Face Amount		$ 450,000,000
Debt Instrument, Proceeds as a Percentage of Face Amount	99.75%	98.12%
Debt Instrument, Unamortized Discount			$ 5,800,000	6,800,000
Stated percentage			10.96%
Proceeds from issuance of debt	$ 35,000,000
Long-term Debt			$ 440,800,000	$ 443,200,000
Debt Instrument, Repayment Percent of Principal			1.00%
Debt Instrument, Periodic Payment, Principal			$ 1,100,000
Repayments of Debt			$ 3,400,000
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%
Term Loan Facility, Term B Loan [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Prepayment premium percent, month 30 to month 42		2.00%
Prepayment premium percent, month 42 to month 54		1.00%
Entertainment Village [Member] | Montreign Operating [Member]
Debt Instrument [Line Items]
Deposit commitment									$ 9,900,000
Entertainment Village [Member] | Montreign Operating [Member] | Term Loan Facility [Member]
Debt Instrument [Line Items]
Restricted cash and cash equivalents						$ 500,000	$ 900,000	$ 2,700,000

XML

Long-Term Debt - Revolving Credit Agreement (Details) - Montreign Operating [Member] - Revolving Credit Agreement [Member] - USD ($)					12 Months Ended
	Jun. 29, 2018	Feb. 09, 2018	Jan. 23, 2018	Jan. 24, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 07, 2017
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity				$ 15,000,000			$ 15,000,000
Borrowings on line of credit	$ 2,000,000	$ 4,000,000	$ 9,000,000		$ 15,000,000	$ 0
Stated percentage					7.71%
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 - Bangkok Bank Loan Agreement (Details) - USD ($) $ in Millions				12 Months Ended
	Nov. 07, 2018	Aug. 30, 2018	Dec. 28, 2017	Dec. 31, 2017	Dec. 31, 2018
Debt Instrument [Line Items]
Interest rate					10.00%
Bangkok Bank Loan [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Commitment Fee Percentage			1.50%
Debt Instrument, Prepayment Fee, Percentage			2.00%
Interest rate					8.77%
Bangkok Bank Loan [Member] | London Interbank Offered Rate (LIBOR) [Member]
Debt Instrument [Line Items]
Basis spread on variable rate			6.25%
Bangkok Bank Loan [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Basis spread on variable rate			5.25%
Entertainment Village [Member] | Montreign Operating [Member]
Debt Instrument [Line Items]
Deposit commitment			$ 9.9
Line of Credit [Member] | Bangkok Bank Loan [Member]
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 20.0
Debt Instrument, Extension Fee, Percentage			1.00%
Borrowings on line of credit	$ 2.0	$ 2.0		$ 16.0

XML

Long-Term Debt - Equipment Loans (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term Debt	$ 543,697	$ 469,736
Cost of funds rate	10.00%
Equipment Loans [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 31,100
Long-term Debt	$ 20,400	$ 31,100
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	Dec. 31, 2018 USD ($)
Debt Instrument [Line Items]
2019	$ 48,004
2020	20,690
2021	15,815
2022	53,625
2023	428,625
Totals	$ 566,759

XML

Long-Term Loans, Related Party (Details) - USD ($)							12 Months Ended
	Dec. 07, 2018	Jul. 31, 2018	Jul. 05, 2018	Dec. 28, 2017	Oct. 13, 2016	Feb. 17, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Nov. 30, 2018	Sep. 30, 2018	Jun. 30, 2018	Jun. 25, 2018	Mar. 31, 2018	Jan. 24, 2017	Nov. 17, 2010
Debt Instrument [Line Items]
Proceeds from related party long-term loan							$ 30,000,000	$ 0	$ 0
Long-term Debt							543,697,000	469,736,000
Converted instrument, shares issued (in shares)						1,332,058
Interest expense							$ 49,835,000	$ 19,269,000	524,000
Debt Instrument, Covenant, Additional Other Indebtedness, Maximum															$ 10,000,000
Common stock, shares issued (shares)							34,403,250	32,559,617			32,717,000	32,717,000		32,560,000
Bridge Loan
Debt Instrument [Line Items]
Principal amount of promissory note																$ 35,000,000
Long-term Debt								$ 17,400,000
Interest expense									$ 200,000
Kien Huat Backstop Loan [Member]
Debt Instrument [Line Items]
Stated percentage				12.00%
Line of Credit Facility, Commitment Fee Amount				$ 200,000
Maximum borrowing capacity				$ 20,000,000
Due to Related Parties							$ 0
KH Construction Loan Agreement [Member] | Construction Loans
Debt Instrument [Line Items]
Principal amount of promissory note					$ 50,000,000
KH Construction Loan Agreement [Member] | Construction Loans | Montreign [Member]
Debt Instrument [Line Items]
Debt Related Commitment Fees and Debt Issuance Costs					$ 500,000
Kien Huat Realty III Limited [Member] | Kien Huat Subordinate Loan Agreement [Member]
Debt Instrument [Line Items]
Proceeds from related party long-term loan		$ 5,000,000	$ 5,000,000
Stated percentage							12.00%
Line of Credit Facility, Commitment Fee Amount							$ 300,000
Maximum borrowing capacity													$ 30,000,000
Debt Instrument, Term Extension							1 year
Line of Credit Facility, Commitment Fee Percentage							1.00%
Long-term Line of Credit							$ 30,000,000
Montreign Operating [Member] | Sub Revolving Loan [Member]
Debt Instrument [Line Items]
Principal amount of promissory note										$ 10,000,000
Stated percentage										7.00%
Debt Instrument, Interest Rate, Stated Percentage, Cash										1.00%
Debt Instrument, Interest Rate, Stated Percentage, Accrue and Remain Outstanding										6.00%
Debt Instrument, Covenant, Additional Other Indebtedness, Maximum										$ 10,000,000
Payments to Fund Long-term Loans to Related Parties	$ 10,000,000
Montreign Holding [Member] | Kien Huat Montreign Loan [Member]
Debt Instrument [Line Items]
Principal amount of promissory note															$ 32,300,000
Common Stock, Capital Shares Reserved for Future Issuance				1,379,873
Installment Period 4 [Member] | 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 - Authorized Capital (Details) - USD ($)		4 Months Ended
	Nov. 14, 2018	Dec. 31, 2009	Dec. 31, 2018	Nov. 06, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Nov. 01, 2016
Class of Stock [Line Items]
Voting power percentage		50.00%
Capital stock, shares authorized (in shares)									155,000,000
Common stock, shares authorized (in shares)			150,000,000		150,000,000	150,000,000	150,000,000	150,000,000	150,000,000
Preferred stock, shares authorized (in shares)									5,000,000
bet365 [Member]
Class of Stock [Line Items]
Sale of Stock, Shares Available for Purchase	2,500,000
Preferred DIstribution, Percentage of Positive DIfference	50.00%
Sale of Stock, Remaining Shares under Agreement	814,241
Sale of Stock, Price Per Share	$ 20
Sale of Stock, Total Consideration To Be Received On Transaction	$ 50,000,000
Voting power percentage	100.00%
Sale of Stock, Consideration Received on Transaction	$ 29,600,000
Preferred Distribution, Term	3 years
Preferred Distribution, Sale of Common Stock Prior to Trigger Date	$ 0
Sale of Stock, Number of Shares Issued in Transaction	1,685,759
Initial Put Option [Member]
Class of Stock [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs			$ 900,000
Contingent Put Option [Member]
Class of Stock [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs			400,000
Forward Contracts [Member]
Class of Stock [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs			1,900,000
Fair Value, Inputs, Level 3 [Member] | Initial Put Option [Member]
Class of Stock [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs			879,000					$ 0
Fair Value, Inputs, Level 3 [Member] | Forward Contracts [Member]
Class of Stock [Line Items]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis with Unobservable Inputs			$ 1,865,000					$ 0
2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount				$ 126,000,000
Share Purchase Program Schedule, Period One [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount				$ 12,000,000

XML

Stockholders' Equity - Common and Preferred Stock (Details)													3 Months Ended	12 Months Ended
	Feb. 20, 2019 USD ($) shares	Jan. 02, 2019 USD ($)	Nov. 13, 2018 USD ($) shares	Oct. 01, 2018 USD ($)	Jul. 02, 2018 USD ($)	Apr. 02, 2018 USD ($)	Jan. 02, 2018 USD ($)	Oct. 02, 2017 USD ($)	Jul. 03, 2017 USD ($)	Apr. 03, 2017 USD ($)	Feb. 17, 2016 USD ($) shares	Jan. 04, 2016 USD ($) shares	Feb. 20, 2019 USD ($) shares	Dec. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) vote_per_stock $ / shares shares	Dec. 31, 2016 USD ($)	Nov. 06, 2018 USD ($)	Sep. 30, 2018 $ / shares shares	Jun. 30, 2018 $ / shares shares	Mar. 31, 2018 $ / shares shares	Mar. 15, 2018 shares	Nov. 01, 2016 shares
Class of Stock [Line Items]
Capital stock, shares authorized (in shares) | shares																						155,000,000
Common stock, shares authorized (in shares) | shares														150,000,000	150,000,000			150,000,000	150,000,000	150,000,000		150,000,000
Preferred stock, shares authorized (in shares) | shares																						5,000,000
Proceeds from issuance of common stock											$ 286,000,000.0			$ 0	$ 0	$ 286,003,000
Preferred stock, shares issued (shares) | shares																					200,000
Series F Preferred Stock issuance														$ 11,880,000	$ 0	$ 0
Series F
Class of Stock [Line Items]
Preferred stock, per share liquidation value (usd per share) | $ / shares														$ 20
Preferred stock, shares outstanding (in shares) | shares														0
Preferred stock, shares issued (shares) | shares														0
Series B
Class of Stock [Line Items]
Preferred stock, shares authorized (in shares) | shares														5,000,000	5,000,000			5,000,000	5,000,000	5,000,000
Voting rights per stock (vote per stock) | vote_per_stock															0.054
Shares convertible for each stock (in shares) | shares															0.054
Preferred stock, per share liquidation value (usd per share) | $ / shares														$ 29	$ 29			$ 29	$ 29	$ 29
Dividends declared per share (usd per share) | $ / shares															$ 2.90
Preferred stock, shares outstanding (in shares) | shares														44,258	44,258			44,258	44,258	44,258
Dividends, Preferred Stock, Cash				$ 32,087	$ 32,087	$ 32,087	$ 32,087	$ 32,087	$ 32,087	$ 32,087
Preferred stock, shares issued (shares) | shares														44,258	44,258			44,258	44,258	44,258
Common Stock
Class of Stock [Line Items]
Price per share on issuable shares (usd per share) | $ / shares															$ 3.77
Number of trading dates used to calculated price per share															20 days
Transferable Subscription Rights [Member]
Class of Stock [Line Items]
Common stock, shares authorized (in shares) | shares												20,138,888
Proceeds from Issuance of Private Placement											$ 290,000,000
Value of subscription rights to be exercised within 10 days of commencement												$ 30,000,000
Value of subscription rights to be exercised, maximum												290,000,000
Sale of stock, commitment fee												$ 1,500,000
Sale of stock, commitment fee, percent												0.50%
Common Stock | Transferable Subscription Rights [Member]
Class of Stock [Line Items]
Shares, Issued | shares											20,138,888
Common Stock | Basic Subscription Rights [Member] | Transferable Subscription Rights [Member]
Class of Stock [Line Items]
Shares, Issued | shares											176,086
Common Stock | Over Subscription Rights [Member] | Transferable Subscription Rights [Member]
Class of Stock [Line Items]
Shares, Issued | shares											13,136,817
Kien Huat Realty Limited [Member] | Common Stock | Standby Purchase Agreement [Member]
Class of Stock [Line Items]
Shares, Issued | shares											6,825,985
Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member]
Class of Stock [Line Items]
Related Party Transaction, Equity Financing, Maximum Without Reduction to Commitment Amount																	$ 29,000,000
Funding Fee, Percent																	1.00%
Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount																	$ 126,000,000
Share Purchase Agreement, Recorded Commitment																	31,100,000
Kien Huat Realty Limited [Member] | Expense Reimbursement [Member]
Class of Stock [Line Items]
Related Party Transaction, Amounts of Transaction											$ 50,000
Kien Huat Realty Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Preferred stock, shares issued (shares) | shares			120
Proceeds from Issuance of Preferred Stock and Preference Stock, Gross			$ 12,000,000
Issuance of Preferred Stock and Preference Stock, Funding Fee			120,000
Series F Preferred Stock issuance			$ 11,900,000
Subsequent Event | Series B
Class of Stock [Line Items]
Dividends, Preferred Stock, Cash		$ 32,087
Subsequent Event | Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Preferred stock, shares issued (shares) | shares	320												320
Proceeds from Issuance of Preferred Stock and Preference Stock, Gross													$ 32,000,000
Series F Preferred Stock issuance													31,700,000
Subsequent Event | Kien Huat Realty Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member]
Class of Stock [Line Items]
Issuance of Preferred Stock and Preference Stock, Funding Fee	$ 300,000												$ 300,000
Subsequent Event | Kien Huat Realty Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Preferred stock, shares issued (shares) | shares	200												200
Proceeds from Issuance of Preferred Stock and Preference Stock, Gross	$ 20,000,000
Issuance of Preferred Stock and Preference Stock, Funding Fee	200,000												$ 200,000
Series F Preferred Stock issuance	$ 19,800,000
Share Purchase Program Schedule, Period One [Member] | Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount																	12,000,000
Share Purchase Program Schedule, Period Two [Member] | Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount																	20,000,000
Share Purchase Program Schedule, Period Three [Member] | Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount																	20,000,000
Share Purchase Program Schedule, Period Four [Member] | Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount																	15,000,000
Share Purchase Program Schedule, Period Five [Member] | Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount																	37,000,000
Share Purchase Program Schedule, Period Six [Member] | Kien Huat Realty III Limited [Member] | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F
Class of Stock [Line Items]
Share Purchase Agreement, Maximum Purchase Amount																	$ 22,000,000

XML

Stockholders' Equity - Bryanston Settlement Agreement (Details) - USD ($) $ in Thousands		12 Months Ended
	Mar. 07, 2016	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Class of Stock [Line Items]
Interest expense		$ 49,835	$ 19,269	$ 524
Series E
Class of Stock [Line Items]
Payments for Repurchase of Private Placement	$ 30,700

XML

Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights - Warrants (Details) - $ / shares	Aug. 19, 2009	Dec. 31, 2018	Mar. 15, 2018	Jan. 24, 2018	Dec. 31, 2017	Dec. 31, 2016	Feb. 17, 2016
Class of Warrant or Right [Line Items]
Number of securities declined to exercise (in shares)						204,706
Number of shares that may be purchased by warrants (shares)		60,000	60,000
Exercise price of right (usd per right)		$ 81.50	$ 81.50		$ 30
Class of warrant or right, outstanding (in shares)					133,000
Preferred stock, shares issued (shares)			200,000
Option Matching Rights [Member]
Class of Warrant or Right [Line Items]
Class of Warrant or Right, Number of Securities Exercised to Trigger Option Matching Rights	200,000
Class of Warrant or Right, Option Exercise Notice	5 days
Class of Warrant or Right, Option Exercise, Second Notice	10 days
Number of securities declined to exercise (in shares)							204,706
Class of Warrant or Right, Option Cancellation Notice	10 days
Number of shares that may be purchased by warrants (shares)				1,666
Exercise price of right (usd per right)				$ 14.95
Class of warrant or right, outstanding (in shares)					3,000

XML

Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights - Restricted Stock, Restricted Stock Units and Options (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 08, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number	0	13,300	33,600		56,600
Stock-based compensation expense	$ 7,200	$ 2,800	$ 2,700
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	$ 2,200
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	2 years 6 months
Proceeds from Stock Options Exercised	$ 25	$ 16	$ 54
2015 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)	2,280,701			2,600,707
Stock-based compensation expense	$ 1,900

XML

Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights - Options and Equity Incentive Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 08, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options outstanding (in shares)	0	13,300	33,600		56,600
Stock-based compensation expense	$ 7,200	$ 2,800	$ 2,700
Total unrecognized compensation	$ 2,200
Vesting period for unrecognized compensation cost to be recognized (in years)	2 years 6 months
Proceeds from stock options exercised	$ 25	$ 16	$ 54
2015 Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized (in shares)	2,280,701			2,600,707
Stock-based compensation expense	$ 1,900
2014 MHHA Agreement
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 5,300

XML

Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights - Schedule of Stock Option Activity (Details) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Options outstanding, beginning balance (shares)	13,300	33,600	56,600
Exercised (shares)	(1,700)	(2,000)	(18,000)
Forfeited (shares)	(11,600)	(18,300)	(5,000)
Options outstanding, ending balance (shares)	0	13,300	33,600	56,600
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Options outstanding, beginning balance (usd per share)	$ 26.03	$ 68.92	$ 48.50
Exercised (usd per share)	15.00	7.95
Options outstanding, ending balance (usd per share)	$ 0.00	$ 26.03	$ 68.92	$ 48.50
Options outstanding, weighted average remaining contractual life (in years)	0 years	8 months 27 days	1 year 1 month 10 days	2 years 7 months 10 days
Minimum
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Options outstanding, beginning balance (usd per share)	$ 15.00	$ 7.95	$ 7.95
Exercised (usd per share)			7.95
Forfeited (usd per share)	24.75	14.85	14.85
Options outstanding, ending balance (usd per share)		15.00	7.95	$ 7.95
Maximum
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward]
Options outstanding, beginning balance (usd per share)	40.05	131.10	131.10
Exercised (usd per share)			9.90
Forfeited (usd per share)	$ 40.05	131.10	82.95
Options outstanding, ending balance (usd per share)		$ 40.05	$ 131.10	$ 131.10

XML

Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights - Schedule of Restricted Stock and Restricted Stock Units Activity (Details) - shares shares in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding, (in shares)	140,000	216,000	137,000
Grants in period, (in shares)	0	1,000	105,000
Vested in period, (in shares)	(56,500)	(55,000)	(22,000)
Forfeited in period, (in shares)	(46,000)	(22,000)	(4,000)
Outstanding, (in shares)	37,500	140,000	216,000
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding, (in shares)	72,900	0	0
Grants in period, (in shares)	161,200	74,500	0
Vested in period, (in shares)	(18,600)	0	0
Forfeited in period, (in shares)	(20,000)	(1,600)	0
Outstanding, (in shares)	195,500	72,900	0

XML

Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights Warrants, Restricted Stock, Restricted Stock Units, Options and Option Matching Rights - Option Matching Rights (Details) - $ / shares	Aug. 19, 2009	Dec. 31, 2018	Mar. 15, 2018	Jan. 24, 2018	Dec. 31, 2017	Dec. 31, 2016	Feb. 17, 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of securities declined to exercise (in shares)						204,706
Class of warrant or right, outstanding (in shares)					133,000
Number of shares that may be purchased by warrants (shares)		60,000	60,000
Exercise price of right (usd per right)		$ 81.50	$ 81.50		$ 30
Option Matching Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Class of Warrant or Right, Number of Securities Exercised to Trigger Option Matching Rights	200,000
Class of Warrant or Right, Option Exercise Notice	5 days
Class of Warrant or Right, Option Exercise, Second Notice	10 days
Number of securities declined to exercise (in shares)							204,706
Class of Warrant or Right, Option Cancellation Notice	10 days
Class of warrant or right, outstanding (in shares)					3,000
Number of shares that may be purchased by warrants (shares)				1,666
Exercise price of right (usd per right)				$ 14.95

XML

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

XML

Employee Benefit Plan Employee Benefit Plan (Details) employee in Thousands, $ in Millions		12 Months Ended
	Jul. 31, 2016	Dec. 31, 2018 USD ($) employee	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Vesting percentage of employer contribution	100.00%
Costs recognized | $		$ 1.4	$ 0.2	$ 0.1
Number of participants | employee		1
Range one
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employer contribution, percent match on employee contribution	50.00%
Range two | Minimum
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Employer matching contribution on salary of employee	4.00%

XML

Income Taxes - Narrative (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Income Tax Disclosure [Abstract]
Deferred tax liability	$ 109	$ 0
Increase (decrease) in valuation allowance	35,200	17,700
Net operating loss carryforwards	152,100	354,200
Operating loss carryforwards, readily available		$ 278,000
New York State net operating loss carryforwards that expire	249,100
Federal net operating losses not subject to expiration	202,100
Limited federal net operating losses subject to expire	$ 55,100

XML

Income Taxes Income Taxes - Schedule of Deferred Income Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Deferred tax assets:
Net operating loss carryforwards	$ 87,181	$ 40,502
Stock—based compensation	1,911	2,097
Development costs	619	27,213
Deferred interest	11,494	0
Deferred compensation	590	68
Depreciation	5,604	376
Other	907	952
Deferred tax assets	108,306	71,208
Deferred tax liability:
Depreciation	(2,037)	0
Net deferred tax assets	106,269	71,208
Valuation allowance	(106,378)	(71,208)
Deferred tax liability, net	$ (109)	$ 0

XML

Income Taxes Income Taxes - Schedule of Effective Income Tax Reconciliation (Details)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Tax Disclosure [Abstract]
Tax provision at federal statutory tax rate	21.00%	35.00%	35.00%
Non-deductible interest	(0.00%)	(0.00%)	(0.30%)
Permanent items	(0.30%)	(3.10%)	(3.50%)
Tax reform	(0.10%)	0.00%	0.00%
Change in valuation allowance	(20.70%)	(31.90%)	(31.20%)
Effective tax rate	(0.10%)	0.00%	0.00%

XML

Related Party Transactions (Details)												1 Months Ended	3 Months Ended	4 Months Ended	12 Months Ended
	Feb. 20, 2019 USD ($) shares	Nov. 13, 2018 USD ($) shares	Nov. 09, 2018 USD ($)	Aug. 07, 2018 USD ($)	May 26, 2017 USD ($)	Mar. 07, 2017 USD ($)	Jan. 24, 2017 USD ($)	Feb. 17, 2016 director	Feb. 10, 2016 USD ($)	Sep. 22, 2015 USD ($)	Dec. 09, 2013 USD ($)	Nov. 30, 2018 USD ($)	Feb. 20, 2019 USD ($) shares	Dec. 31, 2009 USD ($)	Dec. 31, 2018 USD ($) shares	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Nov. 06, 2018 USD ($)	Mar. 15, 2018 shares
Related Party Transaction
Preferred stock, shares issued (shares) | shares																			200,000
Series F Preferred Stock issuance															$ 11,880,000	$ 0	$ 0
Issuance of Series F Preferred Stock														$ 6,901,208	$ 30,568,000
Voting power percentage (less than)														50.00%
Voting power percentage required to nominate directors															24.00%
Voting power percentage required															30.00%
Director
Related Party Transaction
Professional fees expensed							$ 2,500,000		$ 2,100,000		$ 250,000
Professional fees, payable upon execution											150,000
Professional fees, paid within 90 days											$ 100,000
Kien Huat Realty Limited [Member]
Related Party Transaction
Equity Investment Commitment										$ 375,000,000
Related Party Transaction, Closing Period, Number of Years After Closing Date								3 years
Related Party Transaction, Closing Period, Number of Years After Opening of Project								1 year
Related Party Transaction, Minimum Number of Independent Directors | director								3
Aggregate Equity Investment										340,000,000
Montreign Operating [Member] | Moelis & Company LLC [Member]
Related Party Transaction
Professional fees expensed						$ 100,000
Professional and Contract Services Expense					$ 178,000	$ 75,000
Follow-On Rights Offering [Member] | Kien Huat Realty Limited [Member]
Related Party Transaction
Agreement to Exercise Additional Rights, Participation Amount										$ 35,000,000
2018 Moelis Letter Agreement [Member] | Moelis & Company LLC [Member]
Related Party Transaction
Professional fees expensed			$ 3,000,000
2018 Moelis Letter Agreement Amendment [Member] | Moelis & Company LLC [Member]
Related Party Transaction
Professional fees expensed			$ 4,000,000	$ 100,000								$ 4,100,000
2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member]
Related Party Transaction
Related Party Transaction, Equity Financing, Maximum Without Reduction to Commitment Amount																		$ 29,000,000
Funding Fee, Percent																		1.00%
2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty Limited [Member] | Subsequent Event
Related Party Transaction
Issuance of Preferred Stock and Preference Stock, Funding Fee	$ 300,000												$ 300,000
RWS License Agreement [Member] | RW Services Pte Ltd [Member]
Related Party Transaction
Due to Related Parties															$ 900,000
Related Party Transaction, Expenses from Transactions with Related Party															$ 1,500,000
Series F
Related Party Transaction
Preferred stock, shares issued (shares) | shares															0
Issuance of Series F Preferred Stock															$ 43,003,000
Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member]
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount																		$ 126,000,000
Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member] | Subsequent Event
Related Party Transaction
Preferred stock, shares issued (shares) | shares	320												320
Proceeds from Issuance of Preferred Stock and Preference Stock, Gross													$ 32,000,000
Series F Preferred Stock issuance													$ 31,700,000
Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty Limited [Member]
Related Party Transaction
Preferred stock, shares issued (shares) | shares		120
Proceeds from Issuance of Preferred Stock and Preference Stock, Gross		$ 12,000,000
Issuance of Preferred Stock and Preference Stock, Funding Fee		120,000
Series F Preferred Stock issuance		$ 11,900,000
Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty Limited [Member] | Subsequent Event
Related Party Transaction
Preferred stock, shares issued (shares) | shares	200												200
Proceeds from Issuance of Preferred Stock and Preference Stock, Gross	$ 20,000,000
Issuance of Preferred Stock and Preference Stock, Funding Fee	200,000												$ 200,000
Series F Preferred Stock issuance	$ 19,800,000
Share Purchase Program Schedule, Period One [Member] | Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member]
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount																		12,000,000
Share Purchase Program Schedule, Period Two [Member] | Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member]
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount																		20,000,000
Share Purchase Program Schedule, Period Three [Member] | Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member]
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount																		20,000,000
Share Purchase Program Schedule, Period Four [Member] | Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member]
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount																		15,000,000
Share Purchase Program Schedule, Period Five [Member] | Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member]
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount																		37,000,000
Share Purchase Program Schedule, Period Six [Member] | Series F | 2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty III Limited [Member]
Related Party Transaction
Share Purchase Agreement, Maximum Purchase Amount																		$ 22,000,000

XML

Commitments and Contingencies - Lease Payments (Details) - USD ($)	3 Months Ended	460 Months Ended
	Mar. 31, 2017	Dec. 31, 2056	Dec. 31, 2018
Loss Contingencies [Line Items]
2019			$ 10,382,000
2021			9,026,000
2022			8,503,000
Operating Leases, Future Minimum Payments, Due in Five Years			8,400,000
Operating Leases, Future Minimum Payments, Due in Five Years			8,400,000
2024 to 2056			353,449,000
Total			398,160,000
Casino Lease [Member]
Loss Contingencies [Line Items]
2019			7,500,000
2021			7,500,000
2022			8,000,000
Operating Leases, Future Minimum Payments, Due in Five Years			8,100,000
Operating Leases, Future Minimum Payments, Due in Five Years			8,100,000
2024 to 2056			338,424,000
Golf Course Lease [Member]
Loss Contingencies [Line Items]
2019			63,000
2021			150,000
2022			150,000
Operating Leases, Future Minimum Payments, Due in Five Years			150,000
Operating Leases, Future Minimum Payments, Due in Five Years			150,000
2024 to 2056			7,483,000
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]
2019			150,000
2021			150,000
2022			150,000
Operating Leases, Future Minimum Payments, Due in Five Years			150,000
Operating Leases, Future Minimum Payments, Due in Five Years			150,000
2024 to 2056			$ 7,542,000
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 Lease, Annual Fixed Rent, Escalation Percent Increase Every Five Years		8.00%

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Commitments and Contingencies - Narrative (Details) - USD ($)		3 Months Ended
	Dec. 28, 2015	Mar. 31, 2017
Loss Contingencies [Line Items]
Purchase Option Price, After Credit	$ 175,000,000
Purchase Option Price, Before Credit	200,000,000
Purchase Option Price, Credit	$ 25,000,000
Purchase Option, Period	90 days
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

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Summarized Quarterly Data (Unaudited) - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions	Dec. 31, 2018	Mar. 15, 2018	Mar. 05, 2018	Dec. 31, 2017	Nov. 01, 2014
Condensed Financial Statements, Captions [Line Items]
Preferred Stock, Shares Issued		200,000
Number of shares that may be purchased by warrants (shares)	60,000	60,000
Exercise price of right (usd per right)	$ 81.50	$ 81.50		$ 30
2014 MHHA Agreement
Condensed Financial Statements, Captions [Line Items]
Preferred Stock, Shares Issued		200,000
Number of shares that may be purchased by warrants (shares)		60,000
Exercise price of right (usd per right)		$ 81.50
Fair value of common stock not sold					$ 5.5
Fair value of common stock			$ 4.7
Expenses netted against long-term asset			1.4
Guarantee liability			$ 5.5

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Summarized Quarterly Data (Unaudited) - Balance Sheet (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Mar. 15, 2018	Dec. 31, 2017	Dec. 31, 2016	Nov. 01, 2016	Dec. 31, 2015
Condensed Financial Statements, Captions [Line Items]
Total current assets	$ 43,638	$ 37,772	$ 29,828	$ 39,458		$ 15,896
Property and equipment, net	697,679					26,863
Capitalized Development Projects costs	5,724					566,797
Restricted cash and cash equivalents for Development Projects	21,039					41,982	$ 26,384
Intangible assets	45,216					51,000
Cash collateral for deposit bond	0					35,000
Other assets	33,130	287	282	234		251
Total assets	846,426	828,312	778,526	815,194		832,238
Total current liabilities	96,498	100,199	93,817	93,299		96,306
Long-term debt, net of current portion	495,693					455,148
Long-term loan, related party, net of debt issuance costs	30,954					0
Other long-term liabilities	11,442	9,732	9,372	9,869		9,463
Total liabilities	634,587	648,640	565,933	566,215		560,917
Accumulated deficit	(439,910)	(398,302)	(364,378)	(327,351)		(301,032)
Total stockholders’ equity	211,839	179,672	212,593	248,979		271,321	$ 279,566		$ (1,459)
Total liabilities and stockholders’ equity	$ 846,426	$ 828,312	$ 778,526	$ 815,194		$ 832,238
Common stock, par value (usd per share)	$ 0.01	$ 0.01	$ 0.01	$ 0.01		$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000	150,000,000	150,000,000		150,000,000		150,000,000
Common stock, shares issued (shares)	34,403,250	32,717,000	32,717,000	32,560,000		32,559,617
Common stock, shares outstanding (shares)	34,403,250	32,717,000	32,717,000	32,560,000		32,559,617
Preferred stock, shares authorized (in shares)								5,000,000
Preferred stock, shares issued (shares)					200,000
Scenario, Previously Reported
Condensed Financial Statements, Captions [Line Items]
Total current assets		$ 37,772	$ 29,828	$ 39,458
Other assets		3,307	3,471	3,592
Total assets		831,332	781,715	818,552
Total current liabilities		100,199	93,817	93,299
Other long-term liabilities		7,555	7,540	7,905
Total liabilities		646,463	564,101	564,251
Accumulated deficit		(393,105)	(359,357)	(322,029)
Total stockholders’ equity		184,869	217,614	254,301
Total liabilities and stockholders’ equity		831,332	781,715	818,552
Restatement Adjustment
Condensed Financial Statements, Captions [Line Items]
Total current assets		0	0	0
Other assets		(3,020)	(3,189)	(3,358)
Total assets		(3,020)	(3,189)	(3,358)
Total current liabilities		0	0	0
Other long-term liabilities		2,177	1,832	1,964
Total liabilities		2,177	1,832	1,964
Accumulated deficit		(5,197)	(5,021)	(5,322)
Total stockholders’ equity		(5,197)	(5,021)	(5,322)
Total liabilities and stockholders’ equity		$ (3,020)	$ (3,189)	$ (3,358)
Series B
Condensed Financial Statements, Captions [Line Items]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01	$ 0.01	$ 0.01		$ 0.01
Preferred stock, per share liquidation value (usd per share)	$ 29	$ 29	$ 29	$ 29		$ 29
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000	5,000,000	5,000,000		5,000,000
Preferred stock, shares issued (shares)	44,258	44,258	44,258	44,258		44,258
Preferred stock, shares outstanding (in shares)	44,258	44,258	44,258	44,258		44,258

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Summarized Quarterly Data (Unaudited) - Income Statement (Details) - USD ($) $ / shares in Units, shares in Thousands	3 Months Ended							6 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Condensed Financial Statements, Captions [Line Items]
Net revenues	$ 59,948,000	$ 49,136,000	$ 33,522,000					$ 82,658,000	$ 142,606,000	$ 194,845,000	$ 65,851,000	$ 67,454,000
Selling, general and administrative	19,585,000	16,780,000	13,181,000					29,961,000	49,546,000	68,518,000	18,498,000	22,414,000
Total operating costs and expenses	77,669,000	71,361,000	57,510,000					128,871,000	206,540,000	283,909,000	95,768,000	91,137,000
Loss from operations	(17,721,000)	(22,225,000)	(23,988,000)	$ (9,887,000)	$ (6,844,000)	$ (6,830,000)	$ (6,356,000)	(46,213,000)	(63,934,000)	(89,064,000)	(29,917,000)	(23,683,000)
Other expense	345,000	132,000	225,000					93,000	438,000	561,000	0	0
Interest expense										(49,835,000)	(19,269,000)	(524,000)
Interest income										873,000	2,842,000	10,000
Loss before income taxes	(33,892,000)	(36,997,000)	(26,233,000)					(63,230,000)	(97,122,000)	(138,587,000)	(46,344,000)	(24,197,000)
Income tax provision									0		0	0
Net loss	(33,892,000)	(36,997,000)	(26,233,000)	$ (12,105,000)	$ (10,872,000)	$ (11,916,000)	$ (11,451,000)	(63,230,000)	(97,122,000)	(138,696,000)	(46,344,000)	(24,197,000)
Dividends on preferred stock									(96,000)	(128,000)	(128,000)	(168,000)
Net loss applicable to common stockholders	$ (33,924,000)	$ (37,029,000)	$ (26,265,000)					$ (63,294,000)	$ (97,218,000)	$ (138,824,000)	$ (46,472,000)	$ (24,365,000)
Weighted average common shares outstanding, basic (shares)	32,689	32,663	32,538					32,601	32,653	32,882	30,981	28,221
Weighted average common shares outstanding, diluted (shares)	32,689	32,663	32,538					32,601	32,653	32,882	30,981	28,221
Loss per common share, basic (usd per share)	$ (1.04)	$ (1.13)	$ (0.81)	$ (0.39)	$ (0.35)	$ (0.39)	$ (0.37)	$ (1.94)	$ (2.98)	$ (4.22)	$ (1.50)	$ (0.86)
Loss per common share, diluted (usd per share)	$ (1.04)	$ (1.13)	$ (0.81)	$ (0.39)	$ (0.35)	$ (0.39)	$ (0.37)	$ (1.94)	$ (2.98)	$ (4.22)	$ (1.50)	$ (0.86)
Unrealized gain (loss) on Interest Rate Cap	$ (39,000)	$ (72,000)	$ (115,000)					$ (187,000)	$ (226,000)	$ (96,000)	$ 315,000	$ 0
Comprehensive loss	(33,853,000)	(36,925,000)	(26,118,000)					(63,043,000)	(96,896,000)	(138,600,000)	(46,659,000)	(24,197,000)
Development Projects										12,574,000	21,558,000	12,970,000
Amortization of gaming license										5,784,000	0	0
Depreciation										28,993,000	1,517,000	1,341,000
Scenario, Previously Reported
Condensed Financial Statements, Captions [Line Items]
Net revenues	59,948,000	49,136,000	33,522,000					82,658,000	142,606,000
Selling, general and administrative	19,754,000	16,949,000	8,084,000					25,033,000	44,787,000
Total operating costs and expenses	77,838,000	71,530,000	52,413,000					123,943,000	201,781,000
Loss from operations	(17,890,000)	(22,394,000)	(18,891,000)					(41,285,000)	(59,175,000)
Other expense	0	0	0					0	0
Loss before income taxes	(33,716,000)	(37,298,000)	(20,911,000)					(58,209,000)	(91,925,000)
Income tax provision									0
Net loss	(33,716,000)	(37,298,000)	(20,911,000)					(58,209,000)	(91,925,000)
Dividends on preferred stock									(96,000)
Net loss applicable to common stockholders	$ (33,748,000)	$ (37,330,000)	$ (20,943,000)					$ (58,273,000)	$ (92,021,000)
Weighted average common shares outstanding, basic (shares)	32,689	32,663	32,538					32,601	32,653
Weighted average common shares outstanding, diluted (shares)	32,689	32,663	32,538					32,601	32,653
Loss per common share, basic (usd per share)	$ (1.03)	$ (1.14)	$ (0.64)					$ (1.79)	$ (2.82)
Loss per common share, diluted (usd per share)	$ (1.03)	$ (1.14)	$ (0.64)					$ (1.79)	$ (2.82)
Unrealized gain (loss) on Interest Rate Cap	$ (39,000)	$ (72,000)	$ (115,000)					$ (187,000)	$ (226,000)
Comprehensive loss	(33,677,000)	(37,226,000)	(20,796,000)					(58,022,000)	(91,699,000)
Restatement Adjustment
Condensed Financial Statements, Captions [Line Items]
Net revenues		0	0					0	0
Selling, general and administrative	(169,000)	(169,000)	5,097,000					4,928,000	4,759,000
Total operating costs and expenses	(169,000)	(169,000)	5,097,000					4,928,000	4,759,000
Loss from operations	169,000	169,000	(5,097,000)					(4,928,000)	(4,759,000)
Other expense	345,000	132,000	225,000					93,000	438,000
Loss before income taxes	(176,000)	301,000	(5,322,000)					(5,021,000)	(5,197,000)
Income tax provision									0
Net loss	(176,000)	301,000	(5,322,000)					(5,021,000)	(5,197,000)
Dividends on preferred stock									0
Net loss applicable to common stockholders	$ (176,000)	$ 301,000	$ (5,322,000)					$ (5,021,000)	$ (5,197,000)
Weighted average common shares outstanding, basic (shares)	0	0	0					0	0
Weighted average common shares outstanding, diluted (shares)	0	0	0					0	0
Loss per common share, basic (usd per share)	$ (0.01)	$ 0.01	$ (0.16)					$ (0.15)	$ (0.16)
Loss per common share, diluted (usd per share)	$ (0.01)	$ 0.01	$ (0.16)					$ (0.15)	$ (0.16)
Unrealized gain (loss) on Interest Rate Cap	$ 0	$ 0	$ 0					$ 0	$ 0
Comprehensive loss	$ (176,000)	$ 301,000	$ (5,322,000)					$ (5,021,000)	$ (5,197,000)
Gaming
Condensed Financial Statements, Captions [Line Items]
Cost of goods and services sold										126,186,000	44,486,000	44,238,000
Racing
Condensed Financial Statements, Captions [Line Items]
Cost of goods and services sold										8,049,000	5,229,000	5,174,000
Food and beverage
Condensed Financial Statements, Captions [Line Items]
Cost of goods and services sold										25,453,000	4,221,000	4,732,000
Room
Condensed Financial Statements, Captions [Line Items]
Cost of goods and services sold										8,161,000	0	0
Other
Condensed Financial Statements, Captions [Line Items]
Other										$ 191,000	$ 259,000	$ 268,000

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Summarized Quarterly Data (Unaudited) - Cash Flows (Details) - USD ($) $ in Thousands	3 Months Ended							6 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Condensed Financial Statements, Captions [Line Items]
Net loss	$ (33,892)	$ (36,997)	$ (26,233)	$ (12,105)	$ (10,872)	$ (11,916)	$ (11,451)	$ (63,230)	$ (97,122)	$ (138,696)	$ (46,344)	$ (24,197)
Stock-based compensation			5,794					6,377	6,801	7,748	2,755	2,722
Accrued expenses and other current liabilities			10,399					13,089	26,525	26,512	938	4,839
Net cash used in operating activities			1,866					(27,624)	(42,335)	(66,698)	(34,304)	(13,189)
Net cash used in investing activities			(1,201)					(1,257)	(20,252)	(76,089)	(416,722)	(225,279)
Net cash provided by financing activities			10,923					15,967	92,602	139,482	465,607	253,717
Net (decrease)/ increase in cash, cash equivalents and restricted cash			11,588					(12,914)	30,015	(3,305)	14,581	15,249
Cash, cash equivalents and restricted cash, beginning of year	40,141	64,643	53,055				$ 38,474	53,055	53,055	53,055	38,474	23,225
Cash, cash equivalents and restricted cash, end of year	83,070	40,141	64,643	53,055				40,141	83,070	49,750	53,055	$ 38,474
Scenario, Previously Reported
Condensed Financial Statements, Captions [Line Items]
Net loss	(33,716)	(37,298)	(20,911)					(58,209)	(91,925)
Stock-based compensation			697					1,449	2,042
Accrued expenses and other current liabilities			10,174					12,996	26,087
Net cash used in operating activities			1,866					(27,624)	(42,335)
Net cash used in investing activities			(1,201)					(1,257)	(20,252)
Net cash provided by financing activities			10,923					15,967	92,602
Net (decrease)/ increase in cash, cash equivalents and restricted cash			11,588					(12,914)	30,015
Cash, cash equivalents and restricted cash, beginning of year	40,141	64,643	53,055					53,055	53,055	53,055
Cash, cash equivalents and restricted cash, end of year	83,070	40,141	64,643	53,055				40,141	83,070		53,055
Restatement Adjustment
Condensed Financial Statements, Captions [Line Items]
Net loss	(176)	301	(5,322)					(5,021)	(5,197)
Stock-based compensation			5,097					4,928	4,759
Accrued expenses and other current liabilities			225					93	438
Net cash used in operating activities			0					0	0
Net cash used in investing activities			0					0	0
Net cash provided by financing activities			0					0	0
Net (decrease)/ increase in cash, cash equivalents and restricted cash			0					0	0
Cash, cash equivalents and restricted cash, beginning of year	0	0	0					0	0	$ 0
Cash, cash equivalents and restricted cash, end of year	$ 0	$ 0	$ 0	$ 0				$ 0	$ 0		$ 0

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Summarized Quarterly Data (Unaudited) - Summary of Quarterly Results of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended							6 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Jun. 30, 2018	Sep. 30, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Condensed Financial Information Disclosure [Abstract]
Net revenues				$ 15,183	$ 18,713	$ 17,186	$ 14,769
Loss from operations	$ (17,721)	$ (22,225)	$ (23,988)	(9,887)	(6,844)	(6,830)	(6,356)	$ (46,213)	$ (63,934)	$ (89,064)	$ (29,917)	$ (23,683)
Net loss	$ (33,892)	$ (36,997)	$ (26,233)	$ (12,105)	$ (10,872)	$ (11,916)	$ (11,451)	$ (63,230)	$ (97,122)	$ (138,696)	$ (46,344)	$ (24,197)
Loss per common share, basic (usd per share)	$ (1.04)	$ (1.13)	$ (0.81)	$ (0.39)	$ (0.35)	$ (0.39)	$ (0.37)	$ (1.94)	$ (2.98)	$ (4.22)	$ (1.50)	$ (0.86)
Loss per common share, diluted (usd per share)	$ (1.04)	$ (1.13)	$ (0.81)	$ (0.39)	$ (0.35)	$ (0.39)	$ (0.37)	$ (1.94)	$ (2.98)	$ (4.22)	$ (1.50)	$ (0.86)

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Subsequent Events (Details) - USD ($)				12 Months Ended
	Feb. 20, 2019	Feb. 15, 2019	Nov. 13, 2018	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Mar. 15, 2018
Subsequent Event [Line Items]
Preferred stock, shares issued (shares)							200,000
Number of shares that may be purchased by warrants (shares)				60,000			60,000
Exercise price of right (usd per right)				$ 81.50	$ 30		$ 81.50
Series F Preferred Stock issuance				$ 11,880,000	$ 0	$ 0
Series F
Subsequent Event [Line Items]
Preferred stock, shares issued (shares)				0
2018 Kien Huat Preferred Stock Commitment Letter [Member] | Kien Huat Realty Limited [Member] | Subsequent Event
Subsequent Event [Line Items]
Issuance of Preferred Stock and Preference Stock, Funding Fee	$ 300,000
2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F | Kien Huat Realty Limited [Member]
Subsequent Event [Line Items]
Preferred stock, shares issued (shares)			120
Proceeds from Issuance of Preferred Stock and Preference Stock, Gross			$ 12,000,000
Issuance of Preferred Stock and Preference Stock, Funding Fee			120,000
Series F Preferred Stock issuance			$ 11,900,000
2018 Kien Huat Preferred Stock Commitment Letter [Member] | Series F | Kien Huat Realty Limited [Member] | Subsequent Event
Subsequent Event [Line Items]
Preferred stock, shares issued (shares)	200
Proceeds from Issuance of Preferred Stock and Preference Stock, Gross	$ 20,000,000
Issuance of Preferred Stock and Preference Stock, Funding Fee	200,000
Series F Preferred Stock issuance	$ 19,800,000
2019 Moelis Letter Agreement [Member] | Moelis & Company LLC [Member] | Subsequent Event
Subsequent Event [Line Items]
Professional and Contract Services Expense		$ 350,000

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Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Allowance for doubtful accounts
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of year	$ 171	$ 171
Addition charged to costs and expenses	0	0
Other additions (deductions)	0	0
Less deductions	0	0
Balance at end of year	171	171
Deferred tax asset valuation allowance
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance at beginning of year	71,208	88,934
Addition charged to costs and expenses	17,492	0
Other additions (deductions)	0	2,842
Less deductions	(35,218)	0
Balance at end of year	$ 88,934	$ 86,092

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Label	Element	Value
Accounting Standards Update 2014-09 [Member] | Retained Earnings [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ (54,000)