10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

    x     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

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 Route 17B, P.O. Box 5013 Monticello, New York	12701
(Address of principal executive offices)	(Zip Code)

(845) 807-0001

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

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 Web site, 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	x

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

The number of shares outstanding of the issuer’s common stock, as of August 10, 2012 was 30,023,287.

INDEX

		PAGE NO.
PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets as of June 30, 2012 and December 31, 2011	1
	Condensed Consolidated Statements of Operations for the three months and six months ended June 30, 2012 and 2011	2
	Condensed Consolidated Statements of Cash Flows for the three months and six months ended June 30, 2012 and 2011	3
	Notes to Condensed Consolidated Financial Statements	4
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4.	Controls and Procedures	21
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	24
	Signatures	26-27

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PART I—FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for per share data)

	June 30, 2012			December 31, 2011
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	11,823		$	14,601
Restricted cash		1,870			1,354
Accounts receivable, net		1,706			1,478
Prepaid expenses and other current assets		3,971			2,769
Total current assets		19,370			20,202
Property and equipment, net		26,934			27,494
Project development costs		5,933			957
Other assets		602			1,181
Total assets	$	52,839		$	49,834
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	2,235		$	2,079
Accrued expenses and other current liabilities		7,439			5,450
Total current liabilities		9,674			7,529
Long-term loan, related party		17,426			17,426
Total liabilities		27,100			24,955
Commitments and contingencies
Stockholders’ equity:
Preferred stock, 5,000 shares authorized; $0.01 par value -
Series A, $1,000 per share liquidation value, none issued and outstanding		0			0
Series B, $29 per share liquidation value, 44 shares issued and outstanding		0			0
Series E, $10 per share redemption value, 1,731 shares issued and outstanding		6,855			6,855
Common stock, $0.01 par value, 150,000 shares authorized, 30,023 and 29,931 shares issued and outstanding in 2012 and 2011, respectively		300			299
Additional paid-in capital		145,553			145,204
Accumulated deficit		(126,969	)		(127,479	)
Total stockholders’ equity		25,739			24,879
Total liabilities and stockholders’ equity	$	52,839		$	49,834

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

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Revenues:
Gaming	$	16,427		$	16,146		$	31,041		$	29,019
Food, beverage, racing & other		3,296			2,877			6,330			5,196
Gross revenues		19,723			19,023			37,371			34,215
Less: Promotional allowances		(864	)		(457	)		(1,230	)		(740	)
Net revenues		18,859			18,566			36,141			33,475
Costs and expenses:
Gaming		11,776			11,498			22,546			21,374
Food, beverage, racing and other		2,746			2,624			5,495			5,012
Selling, general and administrative		3,372			2,808			6,103			4,895
Stock-based compensation		166			319			351			679
Depreciation		344			327			690			648
Total costs and expenses		18,404			17,576			35,185			32,608
Income from operations		455			990			956			867
Interest expense		(218	)		(342	)		(443	)		(780	)
Interest income		3			2			3			5
Income before income taxes		240			650			516			92
Income tax provision		0			0			(6	)		0
Net income		240			650			510			92
Undeclared dividends on preferred stock		(388	)		(388	)		(776	)		(776	)
Net (loss) income applicable to common shares	$	(148	)	$	262		$	(266	)	($	684	)
Weighted average common shares outstanding, basic		30,023			26,295			29,979			24,749
Weighted average common shares outstanding, diluted		30,023			38,318			29,979			24,749
(Loss) income per common share, basic	($	0.00	)	$	0.01		($	0.01	)	($	0.03	)
(Loss) income per common share, diluted	($	0.00	)	$	0.01		($	0.01	)	($	0.03	)

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

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) (Unaudited)

	Six Months Ended June 30,
	2012			2011
Operating activities:
Net income	$	510		$	92
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		690			648
Provision (recovery) of doubtful accounts		25			(63	)
Stock-based compensation		351			679
Changes in operating assets and liabilities:
Restricted cash –NY Lottery and Purse Accounts		(702	)		(345	)
Accounts receivable		(253	)		(90	)
Prepaid expenses and other current assets		(1,203	)		250
Other assets		579			579
Accounts payable		156			(152	)
Accrued expenses and other current liabilities		(107	)		(200	)
Net cash provided by operating activities		46			1,398
Investing activities:
Purchases of property and equipment		(130	)		(409	)
Restricted cash - Racing capital improvement		186			27
Project development costs		(2,880	)		0
Net cash used in investing activities		(2,824	)		(382	)
Financing activities:
Stock issuance costs		0			(126	)
Net cash used in financing activities		0			(126	)
Net (decrease) increase in cash and cash equivalents		(2,778	)		890
Cash and cash equivalents, beginning of period		14,601			12,960
Cash and cash equivalents, end of period	$	11,823		$	13,850
Supplemental disclosures of cash flow information:
Interest paid	$	445		$	819
Non-cash investing and financing activities:
Common stock issued in settlement of preferred stock dividends	$	234		$	114
Repayment of long-term loan, related party with proceeds from stock issued in rights offering	$	0		$	17,574
Project development costs included in accrued expenses	$	2,095		$	0

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

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note A. Summary of Business and Basis for Presentation

Basis for Presentation

The condensed consolidated financial statements and notes as of June 30, 2012 and December 31, 2011 and for the three and six months ended June 30, 2012 and 2011 are unaudited and include the accounts of Empire Resorts, Inc. (“Empire”) and subsidiaries (the “Company”).

The condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and the footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) which are, in the Company’s opinion, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2011. The results of operations for the interim period may not be indicative of results to be expected for the full year.

Liquidity

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. The Company anticipates that its current cash and cash equivalents balances and cash generated from operations will be sufficient to meet its strategic and working capital requirements for at least the next twelve months. The adequacy of these resources to meet the Company’s liquidity needs beyond that period will depend on the Company’s growth, operating results, and ability to refinance or otherwise satisfy its long-term loan with a related party. If the Company requires additional capital resources to grow its business at a future date, it may seek to sell additional debt or equity. The sale of additional equity could result in additional dilution to the Company’s existing stockholders and financing arrangements may not be available to the Company, or may not be available in amounts or on terms acceptable to the Company. See Note I. Subsequent Events.

Nature of Business

Through Empire’s wholly-owned subsidiary, Monticello Raceway Management, Inc. (“MRMI”), the Company currently owns and operates Monticello Casino and Raceway, a 45,000 square foot video gaming machine (“VGM”) and harness horseracing facility located in Monticello, New York, 90 miles northwest of New York City. Monticello Casino and Raceway operates 1,110 VGMs, which includes 20 electronic table game positions (“ETGs”) as an agent for the New York Lottery (“NYL”). VGM activities in the State of New York are overseen by the NYL. VGMs are similar to slot machines, but they are connected to a central system and report financial information to the central system. The Company also generates 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.

On November 4, 2011, each holder of a New York racetrack license with a VGM facility, with the exception of Aqueduct who has a management agreement, received a joint letter (the “Letter”) from the NYL and the New York State Racing and Wagering Board (“RWB”), which notified the license holders that RWB has commenced its review of the holder’s racetrack license renewal application for calendar year 2012. The Letter said that, for the first time since the commencement of VGM operations, the NYL and RWB will be conducting a joint review of applicant license materials. While there has been no change to the laws governing racing or VGM operations, the Letter also indicated that the RWB is considering an open competition process for the re-award of licenses forfeited for failure to meet licensing and operating standards and is also considering whether all track licenses should be subject to an open competition for determining licensure for the 2013 calendar year. Generally, the annual license renewal process requires the RWB to review the financial responsibility, experience, character and general fitness of MRMI and its management. The Company cooperated fully with RWB and NYL during this annual review in

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pursuit of the renewal of MRMI’s racetrack and simulcast licenses. The Company submitted its 2012 license renewal applications and supplemental information to RWB and NYL. RWB informed the Company that MRMI continued to operate under the 2011 licenses prior to RWB’s formal action on MRMI’s 2012 license renewal applications. On May 30, 2012, the RWB granted MRMI’s license renewals through December 31, 2012, conditioned upon the Company’s continued cooperation with RWB staff regarding certain stockholders and the requirement that the Company immediately notify the RWB in the event of any change in percentages of Empire’s ownership and whether certain Empire stockholders vote their shares.

The Company has joined with other VGM facility operators in New York State to form the New York Gaming Association, whose principal effort is to seek approval for passage of a constitutional amendment authorizing table games at the VGM facilities in New York, which would permit the Company to develop and operate a full-scale casino which would include slot machines and table game wagering and the extension of credit. Generally, a constitutional amendment must be approved by both houses of the New York State Legislature (“Legislature”), approved again by a newly elected Legislature, and approved by the voters at a general election, in which instance it becomes effective on the following January 1. On March 15, 2012, Governor Andrew Cuomo, Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos announced that a constitutional amendment authorizing up to seven non-tribal casinos at locations to be determined by the Legislature, was approved by the Legislature. A newly elected Legislature would have to pass the amendment again next year before it goes to a general referendum in November 2013. However, there can be no assurance given that an amendment to the New York State Constitution to permit full-scale casino gaming will be passed in a timely manner, or at all, or that, if such amendment were passed, the Company would be able to effectively develop and operate a full-scale casino.

The enacted New York State budget includes legislation to replace the RWB and NYL with a Gaming Commission that will establish and supervise four divisions to carry out responsibilities relating to the regulation and enforcement of lottery, charitable gaming, gaming, and horse racing and pari-mutuel wagering. Each division will be supervised by a division director. The gaming division will be responsible for the appropriate operation and administration of the Company’s VGM operations and the horse racing and pari-mutuel wagering division will be responsible for the supervision, regulation and administration of the Company’s horse racing and pari-mutuel wagering activities. The Gaming Commission was expected to begin on or about October 1, 2012; however, as part of the New York Governor’s Program Bill #45, the Gaming Commission is expected to begin on or about February 1, 2013.

Development

On April 12, 2011, Empire announced it had executed an exclusivity agreement with Entertainment Properties Trust (“EPR”) and MSEG LLC to explore exclusively the joint development of the companies’ respective properties located in Sullivan County, New York. EPR’s subsidiary EPT Concord II, LLC (“EPT”) is the sole owner of 1,500 acres located at the site of the former Concord Resort (the “EPT Property”). The exclusivity agreement also committed the parties to work towards the execution of a master development agreement (the “Master Development Agreement”) to develop the EPT Property.

On December 21, 2011, the Company entered into an option agreement with EPT, which agreement was amended on March 30, 2012, April 30, 2012, May 30, 2012 and June 30, 2012 (as amended, (the “Option Agreement”). Pursuant to the Option Agreement, EPT granted the Company a sole and exclusive option (the “Option”) to lease certain EPT property located in Sullivan County, New York pursuant to the terms of a lease negotiated between the parties. The initial term of the Option Agreement expires on December 21, 2012 (the “Option Exercise Period”). In addition, subject to the conditions of the Option Agreement, the Option Exercise Period may be extended for one or more six month periods; provided, however, in no event shall the Option Exercise Period extend beyond June 30, 2013.

In connection with the execution of the Option Agreement, the Company paid EPT an option payment in the amount of $750,000 (the “Option Payment”) which was classified as project development costs. Any extension of the Option Exercise Period shall be accompanied by an additional option payment of $750,000. The Option may be exercised only to the extent the Company (or its affiliate) simultaneously exercises other options in connection with the master development agreement. Pursuant to the Option Agreement, the parties agreed to work towards entering into a master development agreement by October 1, 2012. In addition, the Company’s rights and EPT’s obligations pursuant to the Option Agreement are subject to certain existing EPT agreements. Subject to the terms and conditions of the Option Agreement, EPT shall not grant to any third party the right to lease the EPT Property during the Option Exercise Period.

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On March 8, 2012, EPT and Empire presented an overview of the master plan for redevelopment of the former EPT Property in Sullivan County, New York to the Town of Thompson Town Board. In addition, on March 8, 2012, EPT and Empire formally submitted the proposed redevelopment plan to the Town of Thompson for an assessment of its environmental impact as prescribed by the State Environmental Quality Review (“SEQR”) provisions of the New York Environmental Conservation Law. Thereafter, EPT submitted the Draft Generic Environmental Impact Statement (DGEIS) and Draft Environmental Impact Statement (DEIS) to the Town of Thompson for the redevelopment plan. On July 25, 2012, the Town of Thompson provided EPT with the Notice of Completion of Draft DGEIS/DEIS and Notice of SEQR Hearing. The SEQR hearing is scheduled for August 28, 2012.

Note B. Summary of Significant Accounting Policies

Revenue recognition and Promotional allowances

Gaming revenue is the net difference between gaming wagers and payouts for prizes from VGMs, 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 NYL’s share of VGM revenue and the Monticello Harness Horsemen’s Association and Agriculture and New York State Horse Breeding Development Fund’s contractually required percentages.

Food, beverage, racing and other revenue, includes food and beverage sales, racing revenue earned from pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks and miscellaneous income. The Company recognizes racing revenues before deductions of such related expenses as purses, stakes and awards. The statutory 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”) 605-50, “Revenue Recognition—Customer Payments and Incentives”.

The retail value of complimentary food, beverages and other items provided to the Company’s guests is included in gross revenues and then deducted as promotional allowances. The estimated cost of providing such food, beverage and other items as promotional allowances is included in food, beverage, racing and other expense. In addition, promotional allowances include non-subsidized free play offered to the Company’s guests based on their relative gaming worth and prizes included in certain promotional marketing programs.

The retail value amounts included in promotional allowances for the three and six months ended June 30, 2012 and 2011 are as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(in thousands)
Food and beverage	$	420	$	160	$	740	$	463
Non-subsidized free play		317		198		250		104
Players club awards		127		99		240		173
Total retail value of promotional allowances	$	864	$	457	$	1,230	$	740

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The estimated cost of providing complimentary food, beverages and other items for the three and six months ended June 30, 2012 and 2011 are as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(in thousands)
Food and beverage	$	429	$	146	$	756	$	502
Non-subsidized free play		187		116		148		61
Players club awards		127		99		240		173
Total cost of promotional allowances	$	743	$	361	$	1,144	$	736

Accounts receivable

Accounts receivable, net of allowances, are stated as 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. In the normal course of business, the Company settles wagers for other racetracks and is 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. As of June 30, 2012 and December 31, 2011, the Company recorded an allowance for doubtful accounts of approximately $202,000 and $177,000, respectively.

Earnings (loss) per common share

The Company computes basic earnings (loss) per share by dividing net income (loss) applicable to common shares by the weighted-average common shares outstanding for the period. Diluted earnings (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 earnings (loss) of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three months ended June 30, 2012 and the six months ended June 30, 2012 and 2011 were the same.

The following table shows the approximate number of common stock equivalents outstanding at June 30, 2012 and 2011 that could potentially dilute basic earnings per share in the future, but were not included in the calculation of diluted loss per share for the three months ended June 30, 2012, because their inclusion would have been anti-dilutive.

	Outstanding at June 30,
	2012		2011
Options		2,078,000		2,553,000
Warrants		1,083,000		1,083,000
Option matching rights		1,277,000		1,795,000
Restricted stock		170,000		17,000
Shares to be issued upon conversion of convertible debt		19,726,000		19,726,000
Total		24,334,000		25,174,000

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

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FASB, for its financial assets and liabilities that had not been previously carried at fair value. The Company’s financial instruments are comprised of current assets, current liabilities and a long-term loan, related party. Current assets and current liabilities approximate fair value due to their short-term nature. As of June 30, 2012, the Company’s management was unable to estimate reasonably the fair value of the long-term loan, related party due to the inability to obtain quotes for similar credit facilities.

Estimates and assumptions

The preparation of financial statements in conformity with 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.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent accounting pronouncements

The Company does not believe that any recently issued, but not effective, accounting standards, if currently adopted, will have a material effect on its consolidated financial position, results of operations, or cash flows.

Note C. Project Development Costs

In December 2011, the Company entered into the Option Agreement with EPT, which was amended on March 30, 2012, April 30, 2012, May 30, 2012 and June 30, 2012. Pursuant to the Option Agreement, EPT granted the Company the option to lease certain EPT property located in Sullivan County, New York pursuant to the terms of a lease negotiated between the parties. In connection with the execution of the Option Agreement, the Company paid EPT the Option Payment ($750,000) which is classified as project development costs. The option may be exercised only to the extent the Company (or its affiliate) simultaneously exercises other options in connection with the Master Development Agreement. In addition, the Company’s rights and EPT’s obligations pursuant to the Option Agreement are subject to certain existing EPT agreements. Subject to the terms and conditions of the Option Agreement, EPT shall not grant to any third party the right to lease the EPT Property during the Option Exercise Period.

In addition to the Option Payment, project development costs included other direct costs incurred by the Company in consummating the Option Agreement and related lease, as well as other project development costs for the EPT Property. At June 30, 2012, project development costs totaled approximately $5.9 million.

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Note D. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are comprised of the following:

	June 30, 2012		December 31, 2011
	(in thousands)
Liability for horseracing purses	$	1,098	$	726
Accrued payroll		843		949
Accrued redeemable points		329		324
Liability to NYL		412		744
Liability for local progressive jackpot		596		419
Accrued professional fees		3,116		967
Accrued other		1,045		1,321
Total accrued expenses and other current liabilities	$	7,439	$	5,450

Note E. Long-Term Loan, Related Party

On November 17, 2010, Empire entered into a loan agreement (the “Loan Agreement”) with Kien Huat Realty III Limited (“Kien Huat”), pursuant to which Kien Huat agreed to make a short-term bridge loan in the principal amount of $35 million (the “Bridge Loan”) to Empire, subject to the terms and conditions set forth in the Loan Agreement and represented by a convertible promissory note (the “Note”), dated November 17, 2010. Proceeds of the Bridge Loan were used to effectuate the repurchase of the Company’s then outstanding Senior Notes in accordance with the terms of the Settlement Agreement between the Company and certain of the beneficial owners of the Senior Notes dated as of September 23, 2010.

The Note provided that the Bridge Loan bears interest at a rate of 5% per annum, payable in cash in arrears monthly, during its initial term. The maturity date of the Bridge Loan was the earlier of the consummation of Empire’s rights offering and June 30, 2011 (the “Outside Date”). As of May 20, 2011, the date of the consummation of the rights offering, certain conditions were satisfied including the following: (1) five business days have passed after the date on which the rights issued in the proposed rights offering expire and the offering of Empire’s common stock pursuant thereto is terminated, (2) Empire prepaid the indebtedness in an amount equal to 100% of the aggregate amount of gross proceeds received by it pursuant to the rights offering, (3) the proceeds from the rights offering are insufficient to repay the Bridge Loan in full and Empire has not otherwise prepaid the Bridge Loan in full, and (4) no monetary or other material default as defined in the Loan Agreement is continuing, and thus, the maturity date of the remaining unpaid principal amount of the Bridge Loan was extended for a term of two years at an interest rate of 5% per annum convertible at a price equal to the exercise price of the rights issued in the rights offering (period of such extension is referred to as the “Extension Term”).

Subject to and upon compliance with the provisions of the Loan Agreement, during the Extension Term, Kien Huat has the right to convert all or any portion of the principal sum evidenced by the Note such that the unconverted portion is $1,000 or a multiple of $1.00 in excess thereof into fully paid and non-assessable shares of Empire’s common stock at a conversion rate of initially 377 shares of common stock per $1,000 in principal amount, which represents a conversion price of approximately $2.65 per share, subject to adjustment in accordance with the Loan Agreement.

If, as of any date during the Extension Term (the “Measuring Date”), the average of the last reported bid prices of Empire’s common stock for the twenty consecutive trading days as defined in the Loan Agreement, ending on the trading day prior to the Measuring Date exceeds 200% of the conversion price in effect on the Measuring Date, then Empire is entitled to elect that Kien Huat convert all of the principal sum evidenced by the Note into shares of its common stock in accordance with the terms and provisions of the Loan Agreement. If Empire does not elect to force conversion of the Note and there have been no events of default as defined in the Loan Agreement, Empire may voluntarily prepay the Bridge Loan in whole or in part, with all interest accrued through the applicable period, absent notice from Kien Huat of its election to convert the Note.

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The Company consummated its rights offering on May 20, 2011 and the proceeds were used to satisfy approximately $17.6 million of the Bridge Loan. Pursuant to the Loan Agreement, the Company has satisfied the conditions to extend the maturity date of the Bridge Loan to May 17, 2013. See Note I. Subsequent Events.

Note F. Stockholders’ Equity

Stock-based compensation expense was approximately $167,000 and $319,000 for the three months ended June 30, 2012 and 2011, respectively, and approximately $351,000 and $679,000 for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, there was approximately $407,000 of total unrecognized compensation cost related to non-vested share-based compensation awards granted under Empire’s plans. That cost is expected to be recognized over the remaining vesting period of less than two years. This expected cost does not include the impact of any future stock-based compensation awards.

On March 13, 2012, Empire’s Board of Directors (the “Board”) authorized the issuance of 92,414 shares of Empire’s common stock as payment of dividends due for the year ended December 31, 2011 on its Series B preferred stock. The value of these shares when issued was approximately $234,000.

On March 14, 2011, the Board authorized the issuance of 59,548 shares of Empire’s common stock as payment of dividends due for the year ended December 31, 2010 on its Series B preferred stock. The approximate value of these shares when issued was $114,000.

Note G. Concentration

One debtor, Churchill Downs, Incorporated represented approximately 19% and 11% of the total accounts receivable as of June 30, 2012 and December 31, 2011, respectively.

Note H. Commitments and Contingencies

Legal Proceedings

Bryanston Group v. Empire Resorts, Inc.

A complaint has been filed in the Supreme Court of The State of New York, New York County (the “New York County Court”) on or about July 12, 2010 against Empire. The lawsuit arises out of a recapitalization agreement entered into on December 10, 2002 pursuant to which the Company issued Series E preferred stock to Bryanston Group, Inc. and Stanley Tollman, among others. The original complaint was brought by Bryanston Group, Inc. and Stanley Tollman alleging that the Company breached the terms of the recapitalization agreement by (i) failing to use the funds from the 2009 investment by Kien Huat to redeem the Series E preferred shares and pay dividends on the shares; and (ii) paying in excess of $1 million per year in operating expenses (including paying the settlement to the Company’s former chief executive officer, Joseph Bernstein) while not redeeming the Series E preferred shares and paying dividends on the shares. The plaintiffs had sought a preliminary injunction to require the Company to put into escrow funds sufficient to pay the purchase price for the redemption of the Series E shares and the dividends. On August 20, 2010, the New York County Court denied plaintiffs’ request. On September 24, 2010, the Company filed a motion to dismiss the original complaint. The Court denied the Company’s motion to dismiss the original complaint on March 28, 2011. The Company filed an answer to the original complaint. On July 10, 2012, plaintiffs filed and served an amended complaint. The amended complaint, in addition to the allegations from the original complaint, alleges that the Company breached the terms of the recapitalization agreement in two additional ways by (i) failing to use the funds from the 2004 issuance of senior secured convertible notes to redeem the Series E preferred shares and pay dividends; and (ii) failing to use the funds from the 2010 investment by Kien Huat to redeem the Series E preferred shares and pay dividends. The Company filed its answer to the amended complaint on or about July 23, 2012. While the Company cannot predict the outcome of this litigation, it believes the lawsuit is without merit and will aggressively defend its interests.

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Monticello Raceway Management, Inc. v. Concord Associates L.P.

On January 25, 2011, Empire’s subsidiary, MRMI, filed a complaint in the Sullivan County Court against Concord, an affiliate of Louis R. Cappelli who is a significant stockholder. The lawsuit seeks amounts that MRMI believes is owed to it under an agreement between Concord, MRMI and the Monticello Harness Horsemen’s Association, Inc. (the “Horsemen’s Agreement”). Pursuant to the Horsemen’s Agreement, until the earlier to occur of the commencement of operations at the gaming facilities to be developed by Concord at the site of the former Concord hotel and former Concord resort or July 31, 2011, MRMI was to continue to pay to the Monticello Harness Horsemen’s Association, Inc. 8.75% of the net win from VGM activities at Monticello Casino and Raceway, and Concord was to pay the difference, if any, between $5 million per year and 8.75% of the net win from VGM activities (“VGM Shortfall”) during such period. As of December 31, 2010, MRMI believes Concord owed it approximately $300,000 for the VGM Shortfall. Concord has contested its responsibility to make such VGM Shortfall payments to MRMI and on March 10, 2011 Concord filed a Motion to Dismiss, claiming that there was no shortfall because the term of the obligation was a two-year period, not annually. MRMI filed reply affirmations and requested that the Sullivan County Court treat Concord’s motion and the Company’s cross-motion as summary judgment motions. On June 23, 2011, the Court advised the parties that it would treat the Company’s cross-motion as a summary judgment motion. MRMI filed its reply affirmation on August 8, 2011. On November 4, 2011, the Sullivan County Court denied Concord’s motion to dismiss, and denied MRMI’s summary judgment motion without prejudice to renew after conducting pre-trial discovery. On December 8, 2011, MRMI filed an appeal of the denial of the summary judgment motion and on December 9, 2011, Concord Associates filed a cross-appeal for the portion of the decision that denied Concord’s motion to dismiss. MRMI and Concord are engaging in pre-trial discovery. While MRMI is unable at this time to estimate the likelihood of a favorable outcome in this matter, it intends to prosecute vigorously its claims against Concord.

Concord Associates, L.P. v. Entertainment Properties Trust

On March 7, 2012, Concord and various affiliates filed a complaint against EPR and the Company in the United States District Court for the Southern District of New York (the “SDNY”). The lawsuit arises out of the Company’s exclusivity agreement and option agreement with EPR for the potential development of the site of the EPT Property located in Sullivan County, New York. Following a pre-motion conference held on April 25, 2012, Concord and its affiliates filed an amended complaint on June 18, 2012, against EPR and the Company, and added Genting New York LLC and Kien Huat as defendants. The amended complaint asserts the same federal antitrust claims and seeks the same damages as in the original complaint alleging that all defendants have obstructed and delayed Concord from establishing a harness racetrack and VGM facility at the site of the former Concord Hotel in the Town of Thompson, New York, that would compete with other “reasonably accessible casinos/racinos for legal casino gaming business” and other “reasonably accessible casino hotel and resort facilities for tourism patrons” in the “New York-Northeastern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area.” As in the original complaint, Concord’s amended complaint further asserts that the Company has monopolized the market for “gaming and racing” in the “Catskills Region” and has tortiously interfered with EPT’s performance of its contracts and business relations with Concord. The amended complaint seeks damages in an amount to be determined at trial but not less than $500 million (subject to automatic trebling under federal antitrust laws), unspecified punitive damages with respect to Concord’s tortious interference claims, and permanent injunctive relief against EPR and the Company’s agreements. By Stipulation and Order entered by the SDNY on July 6, 2012, the Company shall answer, move or otherwise respond to the amended complaint by July 25, 2012. In letters dated July 25, 2012, the defendants requested a pre-motion conference concerning the Company’s proposed motion to dismiss the amended complaint. On July 27, 2012, Concord submitted a letter in response to the defendant letters. Although the Company is continuing to assess its available options in terms of responding to this amended complaint, the Company believes this lawsuit is without merit and will aggressively defend its interests.

Other Proceedings

The Company is a party from time to time to various other 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 the Company’s consolidated financial position, results of operations or cash flows.

Note I. Subsequent Events

On August 8, 2012, the Company and Kien Huat entered into Amendment No. 1 (the “Amendment”) to the Loan Agreement. Pursuant to the Amendment, the maturity date of the loan made pursuant to the Loan

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Agreement (the “Loan”) was extended from May 17, 2013 to December 31, 2014. In consideration of the extension of the maturity date of the Loan, effective as of the Amendment Date, the rate of interest was amended to be 7.5% per annum in place of 5% per annum. In addition, the Company agreed to pay Kien Huat upon execution a one-time fee of $174,261, or 1% of the outstanding principal amount of the Loan as of the date of the Amendment. Except for these amendments, the Loan Agreement remains unchanged and in full force and effect.

On August 8, 2012, the Company adopted a cash bonus plan for the senior executives of the Company. Pursuant to the bonus plan, up to $350,000 shall be set aside for possible award to Joseph D’Amato, Laurette Pitts, Nanette Horner and Charles Degliomini for fiscal year 2012. Bonuses may be awarded to each of the named senior executives in amounts determined by the Compensation Committee of the Board of Directors and based upon the recommendation of Mr. D’Amato for the named senior executives other than himself. Bonuses totaling up to the $350,000 aggregate maximum under this plan may be awarded in the event MRMI’s earnings before interest, tax, depreciation and amortization (“EBITDA”) for the 2012 fiscal year meets or exceeds 80% of the target EBITDA that is established by the Compensation Committee at the beginning of each fiscal year. The aggregate maximum amount available for award pursuant to the bonus plan may be reduced in proportion to the amount by which MRMI’s EBITDA for the fiscal year misses the target EBITDA. The amount of individual bonuses awarded pursuant to the bonus plan will be based 50% upon whether MRMI met or exceeded its EBITDA target and 50% based upon individual performance in the fiscal year, which shall be recommended Mr. D’Amato and approved by the Compensation Committee. Awards shall be made pursuant to the bonus plan in the first quarter of the succeeding fiscal year.

On August 8, 2012, the Board of Directors appointed Laurette Pitts, the Company’s current Senior Vice President and Chief Financial Officer, as Chief Operating Officer of the Company. In addition to Ms. Pitts’ new title, Ms. Pitts will retain her current titles. In connection with such appointment, the Company expects to extend Ms. Pitts’ employment term from December 13, 2012 to December 31, 2014 and to increase her salary from $215,000 to $230,000 per year. Please see the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2011, which was filed on March 19, 2012, for Ms. Pitts’ biographical information.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Management’s Discussion and Analysis of the Financial Condition and Results of Operations should be read together with the Management’s Discussion and Analysis of Financial Condition and Results of Operations and the Condensed Consolidated Financial Statements and related notes thereto in Empire Resorts, Inc. (“Empire”) and subsidiaries’ (the “Company”, “us”, “our”, or “we”) Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements which constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally relate to our strategies, plans and objectives for future operations and are based upon management’s current plans and beliefs or estimates of future results or trends. Forward-looking statements also involve risks and uncertainties, including, but not restricted to, the risks and uncertainties described in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2011, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict.

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

Overview

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

Through our wholly-owned subsidiary, Monticello Raceway Management, Inc. (“MRMI”), we currently own and operate Monticello Casino and Raceway, a 45,000 square foot video gaming machine (“VGM”) and harness horseracing facility located in Monticello, New York, 90 miles northwest of New York City. Monticello Casino and Raceway operates 1,110 VGMs which includes 20 electronic table game positions (“ETGs”) as an agent for the New York Lottery (“NYL”). VGM activities in the State of New York are overseen by the NYL. VGMs are similar to slot machines, but they are connected to a central system and report financial information to the central system. 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.

On November 4, 2011, each holder of a New York racetrack license with a VGM facility, with the exception of Aqueduct who has a management agreement, received a joint letter (the “Letter”) from the NYL and the New York State Racing and Wagering Board (“RWB”), which notified the license holders that RWB has commenced its review of the holder’s racetrack license renewal application for calendar year 2012. The Letter said that, for the first time since the commencement of VGM operations, the NYL and RWB will be conducting a joint review of applicant license materials. While there has been no change to the laws governing racing or VGM operations, the Letter also indicated that the RWB is considering an open competition process for the re-award of licenses forfeited for failure to meet licensing and operating standards and is also considering whether all track licenses should be subject to an open competition for determining licensure for the 2013 calendar year. Generally, the annual license renewal process requires the RWB to review the financial responsibility, experience, character and general fitness of MRMI and our management. We cooperated fully with RWB and NYL during this annual review in pursuit of the renewal of MRMI’s racetrack and simulcast licenses. We submitted our 2012 license renewal applications and supplemental information to RWB and NYL. RWB has informed us that MRMI continued to operate under the 2011 licenses prior to RWB’s formal action on MRMI’s 2012 license renewal applications. On May 30, 2012, the RWB granted MRMI’s license renewals through December 31, 2012, conditioned upon our continued cooperation with RWB staff regarding certain stockholders and the requirement that we immediately notify the RWB in the event of any change in percentages of our ownership and whether certain Empire stockholders vote their shares.

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The enacted New York State budget includes legislation to replace the RWB and NYL with a Gaming Commission that will establish and supervise four divisions to carry out responsibilities relating to the regulation and enforcement of lottery, charitable gaming, gaming, and horse racing and pari-mutuel wagering. Each division will be supervised by a division director. The gaming division will be responsible for the appropriate operation and administration of our VGM operations and the horse racing and pari-mutuel wagering division will be responsible for the supervision, regulation and administration of our horse racing and pari-mutuel wagering activities. The Gaming Commission was expected to begin on or about October 1, 2012; however, as part of the New York Governor’s Program Bill #45 dated June 16, 2012, the Gaming Commission is expected to begin on or about February 1, 2013.

We have joined with other VGM facility operators in New York State to form the New York Gaming Association, whose principal effort is to seek approval for passage of a constitutional amendment authorizing table games at the VGM facilities in New York, which would permit us to develop and operate a full-scale casino which would include slot machines and table game wagering and the extension of credit. Generally, a constitutional amendment must be approved by both houses of the New York State Legislature (“Legislature”), approved again by a newly elected Legislature, and approved by the voters at a general election, in which instance it becomes effective on the following January 1. On March 15, 2012, Governor Andrew Cuomo, Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos announced that a constitutional amendment authorizing up to seven non-tribal casinos at locations to be determined by the Legislature, was approved by the Legislature. A newly elected Legislature would have to pass the amendment again next year before it goes to a general referendum in November 2013. However, there can be no assurance given that an amendment to the New York State Constitution to permit full-scale casino gaming will be passed in a timely manner, or at all, or that, if such amendment were passed, we would be able to effectively develop and operate a full-scale casino.

Development

On April 12, 2011, we announced the execution of an exclusivity agreement with Entertainment Properties Trust (“EPR”) and MSEG LLC to explore exclusively the joint development of the companies’ respective properties located in Sullivan County, New York. EPR’s subsidiary EPT Concord II, LLC (“EPT”), is the sole owner of 1,500 acres located at the site of the former Concord Resort (the “EPT Property”). The exclusivity agreement also committed the parties to work towards the execution of a master development agreement (the “Master Development Agreement”) to develop the EPT Property.

On December 21, 2011, we entered into an option agreement with EPT, which agreement was amended on March 30, 2012, April 30, 2012, May 30, 2012 and June 30, 2012 (as amended (the “Option Agreement”). Pursuant to the Option Agreement, EPT granted us a sole and exclusive option to lease certain EPT property located in Sullivan County, New York pursuant to the terms of a lease negotiated between the parties. The initial term of the Option Agreement expires on December 21, 2012 (the “Option Exercise Period”). In addition, subject to the conditions of the Option Agreement, the Option Exercise Period may be extended for one or more six month periods; provided, however, in no event shall the Option Exercise Period extend beyond June 30, 2013.

In connection with the execution of the Option Agreement, we paid EPT an option payment in the amount of $750,000 (the “Option Payment”). Any extension of the Option Exercise Period shall be accompanied by an additional option payment of $750,000. The Option may be exercised only to the extent we (or our affiliate) simultaneously exercise other options in connection with the master development agreement. Pursuant to the Option Agreement, the parties agreed to work towards entering into a master development agreement by October 1, 2012. In addition, our rights and EPT’s obligations pursuant to the Option Agreement are subject to certain existing EPT agreements. Subject to the terms and conditions of the Option Agreement, EPT shall not grant to any third party the right to lease the EPT Property during the Option Exercise Period.

On March 8, 2012, EPT and Empire presented an overview of the master plan for redevelopment of the EPT Property in Sullivan County, New York to the Town of Thompson Town Board. In addition, on March 8, 2012, EPT and Empire formally submitted the proposed redevelopment plan to the Town of Thompson for an assessment of its environmental impact as prescribed by the State Environmental Quality Review (“SEQR”) provisions of the New York Environmental Conservation Law. Thereafter, EPT submitted the Draft Generic

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Environmental Impact Statement (DGEIS) and Draft Environmental Impact Statement (DEIS) to the Town of Thompson for the redevelopment plan. On July 25, 2012, the Town of Thompson provided EPT with the Notice of Completion of Draft DGEIS/DEIS and Notice of SEQR Hearing. The SEQR hearing is scheduled for August 28, 2012.

At June 30, 2012, project development costs totaled approximately $5.9 million.

Competition

Our gaming operations are located in the Catskills region in the State of New York, which has historically been a resort area, although its popularity declined with the growth of destinations such as Atlantic City and Las Vegas. We are located approximately 90 miles northwest of New York City. There are approximately 17.5 million adults who live within 100 miles of the Catskills area, an area where average per capita income is approximately $35,000. Specifically, Monticello Casino and Raceway is directly adjacent to Highway 17, has highly visible signage and convenient access, and is less than 1,000 feet from the highway’s exit.

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 the State of New York 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.

In New York, we face competition for guests from Orange, Duchess and Ulster Counties in New York for our VGM operation from a VGM facility at Yonkers Raceway, located within the New York City metropolitan area. Yonkers Raceway has a harness horseracing facility, approximately 4,950 VGMs, food and beverage outlets and other amenities.

From time to time, New Jersey has reviewed options to place slot machines in various locations including the Meadowlands Racetrack located in Bergen County, NJ. There are currently bills pending in the New Jersey Assembly and the New Jersey Senate to allow establishment and operation of casinos in Bergen County no later than January 1, 2014, which would require, among other things, an amendment to the State Constitution. If passed, the bills would take effect upon approval by voters at a referendum held at a general election. We are uncertain of whether the referendum will be placed on the ballot in November 2012 and do not know if the constitutional amendment would be approved by the voters. Currently no slot machines or legalized full-scale casino gambling is permitted at the privately operated Meadowlands Racetrack and New Jersey Governor Chris Christie and Senate President Stephen Sweeney have stated publicly that they do not currently support permitting gambling at the Meadowlands Racetrack.

On November 8, 2011, the voters in New Jersey approved a constitutional amendment permitting the Legislature to authorize by law wagering at casinos in Atlantic City and at current or former running and harness horse racetracks on the results of professional, certain college, and amateur sport and athletic events. On January 9, 2012 the New Jersey State Legislature approved a bill that would allow the state Casino Control Commission to issue licenses to casinos and racetracks to accept bets on some professional and collegiate events. Governor Christie signed the legislation. The approved legislation, however, remains pending due to the existing federal ban on such wagering. To a lesser extent, Monticello Casino and Raceway faces competition from two casinos in Pennsylvania. In January 2010, the Pennsylvania legislature authorized and its Governor approved table games in its existing slot machine facilities. The legislation authorized all table games, including blackjack, craps, roulette, baccarat, and poker at thoroughbred and harness racetracks with slot machine facilities and stand-alone slot machine facilities. In addition, the legislation authorized the granting of credit to guests of the Pennsylvania casinos. Table games became operational in Pennsylvania’s casinos in July 2010. Both Pennsylvania casinos that we compete against have installed and offer table games. This legislation augmented the legislation passed in July 2004, whereby Pennsylvania legalized the operation of up to 61,000 slot machines at 14 locations throughout the state, to permit table games at the slot machine facilities. As of July 31, 2012, there were eleven casinos in operation within Pennsylvania, with six located at racetracks. One such race track facility is the Mohegan Sun at Pocono Downs, which has approximately 2,300 slot machines and 84 table games, including 18 poker tables. The Mohegan Sun at Pocono Downs in Wilkes-Barre, Pennsylvania is approximately 70 miles southwest of Monticello. In addition, the Mount Airy Casino Resort has approximately 2,075 slot machines and 72 table games, including 11 poker tables, a hotel, spa and a golf course. The Mount Airy Casino Resort is located in Mount Pocono, Pennsylvania, approximately 60 miles southwest of Monticello.

In August 2009, the NYL approved a pilot test period for us and one other New York State VGM facility which provided us the opportunity to reward our guests based on their level of VGM play and to offer promotions

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that can compete with the offerings of our competitors located in Pennsylvania, although at a restricted level. On March 22, 2011, the NYL extended the subsidized free play pilot program until legislation authorizing a statewide subsidized free play program is enacted. The budget that was passed in March 2011 included a statewide subsidized free play program, which became effective for the gaming day of April 4, 2011. Subsidized free play credits issued pursuant to the program will be excluded from the calculation of net win at the issuing facility. Each facility will be permitted to issue subsidized free play credits in an amount not to exceed 10% of adjusted net win.

In 2001, the New York State Legislature and the New York State Governor authorized the building of three Native American casinos in the Catskills region of the State of New York. On November 22, 2010, former Governor Paterson of New York signed a land settlement agreement with the Stockbridge-Munsee Community Band of Mohican Indians, a Wisconsin based Tribe (“Stockbridge-Munsee Band”) with alleged roots in New York. As part of this land settlement, former Governor Paterson and the Stockbridge-Munsee Band executed a compact permitting the construction and operation of a Class III tribal casino on property located in Bridgeville, New York, approximately five miles from Monticello Casino and Raceway. On January 5, 2011, the United States Department of the Interior (“USDOI”) received the compact. Approval of the compact is a condition precedent to the land settlement agreement becoming effective. In addition to approving the compact, the USDOI must also authorize the taking of the land into trust for the benefit of the Stockbridge-Munsee Band. On February 18, 2011, the USDOI notified New York State Governor Cuomo and the Stockbridge-Munsee Band that the compact is disapproved because the limitations on the use of the land violate the Indian Gaming Regulatory Act. The USDOI indicated that it did not have enough information to conduct analysis on the compact’s revenue sharing or exclusivity provisions and it also had outstanding questions regarding the relationship between the compact and the proposed settlement agreement. Newspaper reports indicate that the Stockbridge-Munsee Band recently filed an updated application to have the USDOI take 330 acres in the Catskills region into trust. The USDOI began consulting with state and local officials and other nearby Indian Tribes, as required by the Indian Gaming Regulatory Act, regarding the Stockbridge-Munsee Band’s request. The USDOI sent a letter to interested parties asking the addressees for input on whether or not the gaming establishment on the 330 acres to be held in trust for the Stockbridge-Munsee Band would be detrimental to the surrounding community. The responses will be used by the USDOI to develop proposed findings of fact related to the Stockbridge-Munsee Band’s application. We are unable to predict when or if the compact will be resubmitted to the USDOI or whether taking the land into trust will require an Act of Congress. Throughout 2011 several tribal and other entities, have reportedly expressed an interest in gaming in the Catskill region of New York, and in particular, Sullivan County. However, to date, no governmental action has been taken by the State of New York to enable such entities to engage in legalized gaming activities. We are unable to determine when or if any tribal or other entities would request or obtain the ability to engage in legalized gaming activities in the Catskill region.

On June 14, 2011, the United States Department of the Interior (“USDOI”) Assistant Secretary-Indian Affairs, the head of the Bureau of Indian Affairs (“BIA”), announced that he has rescinded a January 3, 2008, memo which said, among other things, that tribes could develop casinos on land off their reservations only if it was within “commutable distance” of the reservation which was considered by the USDOI to be approximately 40 miles. The requirements of the Indian Gaming Regulatory Act (“IGRA”) will continue to be applied by the BIA even though the “commutability” standard has been rescinded.

As of October 2010, the Shinnecock Indian Nation, a state-recognized Native American tribe, is an Indian entity recognized by the BIA. The Shinnecock Indian Nation has expressed its interest in building a casino in Southampton, New York or at another location in downstate New York. Since becoming federally recognized, the Shinnecock Indian Nation has the right to build a Class II casino (as defined in IGRA) on their 800-acre reservation in Southampton, New York, but the Shinnecock have expressed a desire to develop a Class III casino (as defined in IGRA) closer to New York City including the possibility of a casino at Belmont, New York.

On May 5, 2011, Concord Associates, LP (“Concord”) announced that it has agreed to terms with the Mohegan Tribal Gaming Authority (“MTGA”) to develop a 116 acre site adjacent to the EPT Property. Concord and MTGA are planning to develop a gaming and racing resort facility. On May 6, 2011, we issued a press release announcing that neither Concord nor MTGA have valid New York State licenses to operate a harness racetrack or VGMs in Sullivan County, prerequisites to the operation of VGMs at the proposed development. As such, we cannot predict the outcome of our efforts to implement our plan to develop jointly with EPR the EPT Property.

Currently electronic gaming machines are operated in 39 states and there are 11 states with commercial casinos that also offer table games. Legislation permitting other forms of casino gaming is proposed, from time to time, in various states, including those bordering the State of New York. Our business could be adversely affected by such competition.

In December 2011, the United States Department of Justice (“Department”) confirmed the reversal of a long-standing precedent that applied a 1961 federal gambling law to Internet gambling. The Wire Act, 18 U.S.C §

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1084, et. seq., prevents wagers from taking place over phone lines. Deputy Attorney General James Cole wrote in a letter to William J. Murray, Deputy Director and General Counsel for NYL, “The Department’s Office of Legal Counsel (‘OLC’) has analyzed the scope of the Wire Act, 18 U.S.C § 1084, and concluded that it is limited only to sports betting.” We are uncertain if the Department’s position would have any effect on our operations.

Results of Operations

The results of operations for three months ended June 30, 2012 and 2011 (unaudited) are summarized below:

	2012			2011			Variance			Percentage variance
	(dollars in thousands)
Revenues:
Gaming	$	16,427		$	16,146		$	281			2	%
Food, beverage, racing and other		3,296			2,877			419			15	%
Gross revenues		19,723			19,023			700			4	%
Less: Promotional allowances		(864	)		(457	)		(407	)		89	%
Net revenues		18,859			18,566			293			2	%
Costs and expenses:
Gaming		11,776			11,498			278			2	%
Food, beverage, racing and other		2,746			2,624			122			5	%
Selling, general and administrative		3,372			2,808			564			20	%
Stock-based compensation		166			319			(153	)		(48	)%
Depreciation		344			327			17			5	%
Total costs and expenses		18,404			17,576			828			5	%
Income from operations		455			990			(535	)		(54	)%
Interest expense		(218	)		(342	)		124			(36	)%
Interest income		3			2			1			50	%
Income before income taxes		240			650			(410	)		(63	)%
Income tax provision		0			0						0	%
Net income	$	240		$	650		$	(410	)		(63	)%

Gaming revenue

Gaming revenue increased by $281,000, or 2%, for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011. Our daily patron visits increased 3% and the average daily win per unit increased 2% from $159.85 for the three months ended June 30, 2011 to $162.62 for the three months ended June 30, 2012, as we continue to concentrate our marketing efforts on more profitable guests and programs to increase loyalty. Our VGM hold percentage was 6.9% and 7.1% for the three months ended June 30, 2012 and 2011, respectively.

Food, beverage, racing and other revenue

Food, beverage, racing and other revenue increased by $419,000, or 15%, for the three months ended June 30, 2012 as compared to the three months ended June 30, 2011, due to increased food, beverage and other revenues of $100,000 and racing revenue of $314,000.

Food, beverage and other revenues increased primarily due to higher food and beverage promotional offers compared to a reduced food and beverage promotional program offered in 2011. Racing revenue increased primarily due to the receipt of most of the Off-Track Betting Corporations (“OTB’s”) statutory payments of $314,000; that due to the uncertainty of collection, are accounted for as revenue when received.

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Promotional allowances

Promotional allowances increased by $407,000, or 89%, for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011, primarily due to increased food and beverage comps of $259,000 and non-subsidized free play of $119,000. The increase in food and beverage comps is primarily due to a reduction of food and beverage comp expense of $167,000 in 2011 due to a change in marketing strategy. The food and beverage point program was modified to permit certain players to redeem their accumulated food points for non-subsidized free play. This program spanned multiple months and most players did not redeem their food points for non-subsidized free play until the third quarter of 2011. In 2012, we have increased our food and beverage comp program, as well as our non-subsidized free play offerings accounting for the remaining increases in food and beverage comps and non-subsidized free play.

Gaming costs

Gaming costs increased by $278,000, or 2%, for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011, primarily due to an increase in NYL and other commissions of $193,000 resulting from higher gaming revenue as compared to the same period in the prior year. Other gaming costs related to equipment and HVAC repairs of $47,000 and higher gaming payroll costs of $45,000 also contributed to this variance.

Food, beverage, racing and other costs

Food, beverage, racing and other costs increased approximately $122,000, or 5%, for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011, primarily due to an increase in food, beverage, racing and other payroll and benefit cost of $58,000, Racing costs increased due to purses of $50,000 resulting from the higher gaming revenue and the horsemen’s share of the statutory payments received from the OTB’s as compared to the same period in the prior year.

Selling, general and administrative expenses

Selling, general and administrative expenses increased $564,000, or 20%, for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011, primarily due to an increase in professional fees of $499,000 as a result of higher legal costs of $477,000 and other administrative costs of $50,000.

Stock-based compensation expense

Stock-based compensation decreased $153,000, or 48%, primarily as a result of a smaller amount of options vesting and granted to directors and officers for the three months ended June 30, 2012 compared to the three months ended June 30, 2011.

Interest expense

Interest expense decreased $124,000, or 36%, for the three months ended June 30, 2012, as compared to the three months ended June 30, 2011, due to a reduction in debt outstanding.

Results of Operations

The results of operations for six months ended June 30, 2012 and 2011 (unaudited) are summarized below:

	2012			2011			Variance			Percentage variance
	(dollars in thousands)
Revenues:
Gaming	$	31,041		$	29,019		$	2,022			7	%
Food, beverage, racing and other		6,330			5,196			1,134			22	%
Gross revenues		37,371			34,215			3,156			9	%
Less: Promotional allowances		(1,230	)		(740	)		(490	)		66	%
Net revenues		36,141			33,475			2,666			8	%
Costs and expenses:
Gaming		22,546			21,374			1,172			5	%
Food, beverage, racing and other		5,495			5,012			483			10	%
Selling, general and administrative		6,103			4,895			1,208			25	%
Stock-based compensation		351			679			(328	)		(48	)%
Depreciation		690			648			42			6	%
Total costs and expenses		35,185			32,608			2,577			8	%
Income from operations		956			867			89			10	%
Interest expense		(443	)		(780	)		337			(43	)%
Interest income		3			5			(2	)		(40	)%
Income before income taxes		516			92			424			461	%
Income tax provision		(6	)		0			(6	)		0	%
Net income	$	510		$	92		$	418			454	%

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Gaming revenue

Gaming revenue increased by $2 million, or 7%, for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011. Our daily patron visits increased 5%; and the average daily win per unit increased 6% from $144.44 for the six months ended June 30, 2011 to $153.65 for the six months ended June 30, 2012, as we continue to concentrate our marketing efforts on more high valued gaming guests. Our VGM hold percentage was 7.1% and 7.2% for the six months ended June 30, 2012 and 2011, respectively.

Food, beverage, racing and other revenue

Food, beverage, racing and other revenue increased by $1.1 million, or 22%, for the six months ended June 30, 2012 as compared to the six months ended June 30, 2011, due to increased food, beverage and other revenues of $183,000 and racing revenue of $951,000.

Food, beverage and other revenues increased primarily due to higher food cash sales due to a favorable pricing structure and more visits, as well as an enhanced food and beverage promotional program compared to a reduced program in 2011; which permitted the redemption of food points for non-subsidized free play. Racing revenue increased primarily due to the receipt of most of the Off-Track Betting Corporations (“OTB’s”) statutory payments of $797,000; that due to the uncertainty of collection are accounted for as revenue when received.

Promotional allowances

Promotional allowances increased by $490,000, or 66%, for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011, primarily due to increased food and beverage comps of $277,000 and non-subsidized free play of $146,000. The increase in food and beverage comps is primarily due to a reduction of food and beverage comp expense of $167,000 in 2011 due to a change in marketing strategy. The food and beverage point program was modified to permit certain players to redeem their accumulated food points for non-subsidized free play. This program spanned multiple months and most players did not redeem their food points for non-subsidized free play until the third quarter of 2011. In 2012, we have increased our food and beverage comp program, as well as our non-subsidized free play offerings accounting for the remaining increases in food and beverage comps and non-subsidized free play.

Gaming costs

Gaming costs increased by $1.2 million, or 5%, for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011, primarily due to an increase in NYL and other commissions of $1.1 million resulting from higher gaming revenue over last year.

Food, beverage, racing and other costs

Food, beverage, racing and other costs increased approximately $483,000, or 10%, for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011, primarily due to an increase in food, beverage, racing and other payroll and benefit costs of $149,000. Racing costs increased due to purses of $276,000 resulting from the higher gaming revenue and the horsemen’s share of the statutory payments received from the OTB’s during the six months ended June 30, 2012.

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Selling, general and administrative expenses

Selling, general and administrative expenses increased $1.2 million, or 25%, for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011, primarily due to an increase in professional fees of $1.0 million resulting from higher legal costs of $840,000 and other administrative costs of $135,000.

Stock-based compensation expense

Stock-based compensation decreased $328,000, or 48%, primarily as a result of a smaller amount of options vesting and granted to directors and officers for the six months ended June 30, 2012 compared to the six months ended June 30, 2011.

Interest expense

Interest expense decreased $337,000, or 43%, for the six months ended June 30, 2012, as compared to the six months ended June 30, 2011, due to a reduction in debt outstanding.

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. We anticipate that our current cash and cash equivalents and cash generated from operations will be sufficient to meet our strategic and working capital requirements for at least the next twelve months. The adequacy of these resources to meet our liquidity needs beyond that period will depend on our growth, operating results, and ability to refinance or otherwise satisfy our obligations under our long-term loan with a related party. If we require additional capital resources to grow our business at a future date, we may seek to sell additional debt or equity. The sale of additional equity could result in additional dilution to our existing stockholders and financing arrangements may not be available to us, or may not be available in amounts or on terms acceptable to us.

On November 17, 2010, we entered into a loan agreement (the “Loan Agreement”) with Kien Huat Realty III Limited (“Kien Huat”), our largest stockholder, pursuant to which Kien Huat agreed to make a short-term bridge loan in the principal amount of $35 million (the “Bridge Loan”) to us, subject to the terms and conditions set forth in the Loan Agreement and represented by a convertible promissory note (the “Note”), dated November 17, 2010. Proceeds of the Bridge Loan were used to effectuate the repurchase of our then outstanding Senior Notes in accordance with the terms of that certain settlement agreement, dated September 23, 2010, by and between the Company, the trustee under the indenture for the Senior Notes and certain beneficial owners of the Senior Notes.

The Note provided that the Bridge Loan bears interest at a rate of 5% per annum, payable in cash in arrears monthly, during its initial term. The maturity date of the Bridge Loan was the earlier of the consummation of our rights offering and June 30, 2011 (the “Outside Date”). As of May 20, 2011, the date of the consummation of the rights offering described below, certain conditions were satisfied including the following: (1) five business days have passed after the date on which the rights issued in the rights offering expire and the offering of our common stock pursuant thereto is terminated, (2) we prepaid the indebtedness in an amount equal to 100% of the aggregate amount of gross proceeds received by us for exercised rights pursuant to the rights offering, (3) the proceeds from the rights offering are insufficient to repay the Bridge Loan in full and we have not otherwise prepaid the Bridge Loan in full, and (4) no monetary or other material default as defined in the Loan Agreement is continuing, and thus, the maturity date of the remaining unpaid principal amount of the Bridge Loan was extended for a term of two years at an interest rate of 5% per annum convertible at a price equal to the exercise price of the rights issued in the rights offering (period of such extension is referred to as the “Extension Term”).

Subject to and upon compliance with the provisions of the Loan Agreement, during the Extension Term, Kien Huat has the right to convert all or any portion of the principal sum evidenced by the Note such that the unconverted portion is $1,000 or a multiple of $1.00 in excess thereof into fully paid and non-assessable shares of our common stock at a conversion rate of initially 377 shares of common stock per $1,000 in principal amount, which represents a conversion price of approximately $2.65 per share, subject to adjustment in accordance with the Loan Agreement, by surrender of the Note, in whole or in part in the manner provided in the Loan Agreement.

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If, as of any date during the Extension Term (the “Measuring Date”), the average of the last reported bid prices of common stock for the twenty consecutive trading days as defined in the Loan Agreement, ending on the trading day prior to the Measuring Date exceeds 200% of the conversion price in effect on the Measuring Date, then we are entitled to elect that Kien Huat convert all of the principal sum evidenced by the Note into shares of our common stock in accordance with the terms and provisions of the Loan Agreement. If we do not elect to force conversion of the Note and there have been no events of default as defined in the Loan Agreement, we may voluntarily prepay the Bridge Loan in whole or in part, with all interest accrued through the applicable period, absent notice from Kien Huat of its election to convert the Note.

On May 20, 2011 the rights offering was consummated and our stockholders validly subscribed for 6,628,925 shares of our common stock, par value $0.01 per share, in the rights offering. The rights were exercised at $2.65 per share, resulting in total gross proceeds of approximately $17.6 million, which were used to repay the Bridge Loan. Pursuant to the Loan Agreement, we have satisfied the conditions to extend the maturity date of the Bridge Loan to May 17, 2013.

On August 8, 2012, we and Kien Huat entered into Amendment No. 1 (the “Amendment”) to the Loan Agreement. Pursuant to the Amendment, the maturity date of the loan made pursuant to the Loan Agreement (the “Loan”) was extended from May 17, 2013 to December 31, 2014. In consideration of the extension of the maturity date of the Loan, effective as of the Amendment Date, the rate of interest was amended to be 7.5% per annum in place of 5% per annum. In addition, we agreed to pay Kien Huat upon execution a one-time fee of $174,261, or 1% of the outstanding principal amount of the Loan as of the date of the Amendment. Except for these amendments, the Loan Agreement remains unchanged and in full force and effect.

As of June 30, 2012, we had total current assets of approximately $19.4 million and current liabilities of approximately $9.7 million. We expect that we will be able to fund our operations in the ordinary course over at least the next twelve months.

Net cash provided by operating activities was approximately $46,000 and approximately $1.4 million during the six months ended June 30, 2012 and 2011, respectively. The decrease was primarily due to an Empire Zone real estate tax credit due to us of approximately $1.2 million.

Net cash used in investing activities was approximately $2.8 million and $382,000 for the six months ended June 30, 2012 and 2011, respectively. The increase was primarily a result of higher project development costs of approximately $2.9 million incurred related to the EPT Property development offset by a reduction in restricted cash-racing capital improvement of $186,000 during the six months ended June 30, 2012.

Net cash used in financing activities was approximately $0 and $126,000 during the six months ended June 30, 2012 and 2011, respectively.

On March 13, 2012, our Board authorized the issuance of 92,414 shares of our common stock in payment of dividends due for the year ended December 31, 2011 on our Series B Preferred Stock. The recorded value of these shares was approximately $234,000.

On March 14, 2011, our Board authorized issuance of 59,548 shares of our common stock in payment of dividends due for the year ended December 31, 2010 on our Series B Preferred Stock. The value of these shares when issued was approximately $114,000.

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 RWB, 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.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are a smaller reporting company and, therefore, we are not required to provide information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and

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evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Management believes, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

We carried out an evaluation as of June 30, 2012 under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial 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 Financial Officer concluded that our disclosure controls and procedures are effective to timely alert them to any material information (including our consolidated subsidiaries) that must be included in our periodic Securities and Exchange Commission filings.

Changes in Our Financial Reporting Internal Controls.

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Securities Exchange Act of 1934, as amended) during the fiscal quarter ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Bryanston Group v. Empire Resorts, Inc.

A complaint has been filed in the Supreme Court of The State of New York, New York County (the “New York County Court”) on or about July 12, 2010 against us. The lawsuit arises out of a recapitalization agreement entered into on December 10, 2002 pursuant to which we issued Series E preferred stock to Bryanston Group, Inc. and Stanley Tollman, among others. The original complaint was brought by Bryanston Group, Inc. and Stanley Tollman alleging that we breached the terms of the recapitalization agreement by (i) failing to use the funds from the 2009 investment by Kien Huat to redeem the Series E preferred shares and pay dividends on the shares; and (ii) paying in excess of $1 million per year in operating expenses (including paying the settlement to our former chief executive officer, Joseph Bernstein) while not redeeming the Series E preferred shares and paying dividends on the shares. The plaintiffs had sought a preliminary injunction to require us to put into escrow funds sufficient to pay the purchase price for the redemption of the Series E shares and the dividends. On August 30, 2010, the New York County Court denied plaintiffs’ request. On September 24, 2010, we filed a motion to dismiss the original complaint. The Court denied our motion to dismiss the original complaint on March 28, 2011. We filed an answer to the original complaint. On July 10, 2012, plaintiffs filed and served an amended complaint. The amended complaint, in addition to the allegations from the original complaint, alleges that we breached the terms of the recapitalization agreement in two additional ways by (i) failing to use the funds from the 2004 issuance of senior secured convertible notes to redeem the Series E preferred shares and pay dividends; and (ii) failing to use the funds from the 2010 investment by Kien Huat to redeem the Series E preferred shares and pay dividends. We filed our answer to the amended complaint on or about July 23, 2012. While we cannot predict the outcome of this litigation, we believe the lawsuit is without merit and will aggressively defend our interests.

Monticello Raceway Management, Inc. v. Concord Associates L.P.

On January 25, 2011, our subsidiary, MRMI, filed a complaint in the Sullivan County Court against Concord, an affiliate of Louis R. Cappelli who is a significant stockholder. The lawsuit seeks amounts that we believe are owed to us under an agreement between Concord, MRMI and the Monticello Harness Horsemen’s Association, Inc. (the “Horsemen’s Agreement”). Pursuant to the Horsemen’s Agreement, until the earlier to occur of the commencement of operations at the gaming facilities to be developed by Concord at the site of the former Concord hotel and former Concord resort or July 31, 2011, we were to continue to pay to the Monticello Harness

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Horsemen’s Association, Inc. 8.75% of the net win from VGM activities at Monticello Casino and Raceway, and Concord was to pay the difference, if any, between $5 million per year and 8.75% of the net win from VGM activities (“VGM Shortfall”) during such period. As of December 31, 2010, we believe Concord owed us approximately $300,000 for the VGM Shortfall. Concord has contested its responsibility to make such VGM Shortfall payments to us and on March 10, 2011 Concord filed a motion to dismiss, claiming that there was no shortfall because the term of the obligation was a two year period, not annually. We filed reply affirmations and requested that the Sullivan County Court treat Concord’s motion and our cross-motion as summary judgment motions. On June 23, 2011, the Court advised the parties that it would treat our cross-motion as a summary judgment motion. MRMI filed its reply affirmation on August 8, 2011. On November 4, 2011, the Sullivan County Court denied Concord’s motion to dismiss, and denied MRMI’s summary judgment motion without prejudice to renew after conducting pre-trial discovery. On December 8, 2011, MRMI filed an appeal of the denial of the summary judgment motion and on December 9, 2011, Concord filed a cross-appeal for the portion of the decision that denied Concord’s motion to dismiss. MRMI and Concord are engaging in pre-trial discovery. While we are unable at this time to estimate the likelihood of a favorable outcome in this matter, we intend to prosecute vigorously our claims against Concord.

Concord Associates, L.P. v. Entertainment Properties Trust

On March 7, 2012, Concord and various affiliates filed a complaint against EPR and us in the United States District Court for the Southern District of New York (the “SDNY”). The lawsuit arises out of our exclusivity agreement and option agreement with EPR for the potential development of the site of the EPT Property located in Sullivan County, New York. Following a pre-motion conference held on April 25, 2012, Concord and its affiliates filed an amended complaint on June 18, 2012, against EPR and us, and added Genting New York LLC and Kien Huat as defendants. The amended complaint asserts the same federal antitrust claims and seeks the same damages as in the original complaint alleging that all defendants have obstructed and delayed Concord from establishing a harness racetrack and VGM facility at the site of the former Concord Hotel in the Town of Thompson, New York, that would compete with other “reasonably accessible casinos/racinos for legal casino gaming business” and other “reasonably accessible casino hotel and resort facilities for tourism patrons” in the “New York-Northeastern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area.” As in the original complaint, Concord’s amended complaint further asserts that the Company has monopolized the market for “gaming and racing” in the “Catskills Region” and has tortiously interfered with EPT’s performance of its contracts and business relations with Concord. The amended complaint seeks damages in an amount to be determined at trial but not less than $500 million (subject to automatic trebling under federal antitrust laws), unspecified punitive damages with respect to Concord’s tortious interference claims, and permanent injunctive relief against EPR and our agreements. By Stipulation and Order entered by the SDNY on July 6, 2012, we, shall answer, move or otherwise respond to the amended complaint by July 25, 2012. In letters dated July 25, 2012, the defendants requested a pre-motion conference concerning our proposed motion to dismiss the amended complaint. On July 27, 2012, Concord submitted a letter in response to the defendant letters. Although we are continuing to assess our available options in terms of responding to this amended complaint, we believe this lawsuit is without merit and will aggressively defend our interests.

Other Proceedings

We are a party from time to time to various other 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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ITEM 1A. RISK FACTORS

We are a smaller reporting company and, therefore, we are not required to provide information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

On August 8, 2012, we and Kien Huat entered into Amendment No. 1 (the “Amendment”) to the Loan Agreement. Pursuant to the Amendment, the maturity date of the loan made pursuant to the Loan Agreement (the “Loan”) was extended from May 17, 2013 to December 31, 2014. In consideration of the extension of the maturity date of the Loan, effective as of the Amendment Date, the rate of interest was amended to be 7.5% per annum in place of 5% per annum. In addition, we agreed to pay Kien Huat upon execution a one-time fee of $174,261, or 1% of the outstanding principal amount of the Loan as of the date of the Amendment. Except for these amendments, the Loan Agreement remains unchanged and in full force and effect.

On August 8, 2012, we adopted a cash bonus plan for our senior executives. Pursuant to the bonus plan, up to $350,000 shall be set aside for possible award to Joseph D’Amato, Laurette Pitts, Nanette Horner and Charles Degliomini for fiscal year 2012. Bonuses may be awarded to each of the named senior executives in amounts determined by the Compensation Committee of the Board of Directors and based upon the recommendation of Mr. D’Amato for the named senior executives other than himself. Bonuses totaling up to the $350,000 aggregate maximum under this plan may be awarded in the event our earnings before interest, tax, depreciation and amortization (“EBITDA”) for the 2012 fiscal year meets or exceeds 80% of the target EBITDA that is established by the Compensation Committee at the beginning of each fiscal year. The aggregate maximum amount available for award pursuant to the bonus plan may be reduced in proportion to the amount by which our EBITDA for the fiscal year misses the target EBITDA. The amount of individual bonuses awarded pursuant to the bonus plan will be based 50% upon whether we met or exceeded our EBITDA target and 50% based upon individual performance in the fiscal year, which shall be recommended by Mr. D’Amato and approved by the Compensation Committee. Awards shall be made pursuant to the bonus plan in the first quarter of the succeeding fiscal year.

On August 8, 2012, the Board of Directors appointed Laurette Pitts, our current Senior Vice President and Chief Financial Officer, as Chief Operating Officer of the Company. In addition to Ms. Pitts’ new title, Ms. Pitts will retain her current titles. In connection with such appointment, we expect to extend Ms. Pitts’ employment term from December 13, 2012 to December 31, 2014 and to increase her salary from $215,000 to $230,000 per year. Please see our annual report on Form 10-K for the fiscal year ended December 31, 2011, which was filed on March 19, 2012, for Ms. Pitts’ biographical information.

On August 8, 2012, the Board of Directors set the date for the 2012 Annual Meeting of Stockholders (the “Annual Meeting”) as November 6, 2012. The record date, time and location of the Annual Meeting will be as set forth in our proxy statement for the Annual Meeting. Because the date of the upcoming Annual Meeting is more than 30 days before the anniversary of the 2011 Annual Meeting of Stockholders, the previously disclosed deadlines for submitting proposals or nominations to us are inapplicable. Stockholders wishing to submit proposals or nominations must do so in writing not later than the close of business on September 14, 2012, to us at our offices at c/o Monticello Casino and Raceway, Route 17B, P.O. Box 5013, Monticello, New York 12701.

ITEM 6. EXHIBITS

10.1	Letter Agreement, dated May 30, 2012, by and between Monticello Raceway Management, Inc. and EPT Concord II, LLC. (1)
10.2	Letter Agreement, dated June 30, 2012, by and between Monticello Raceway Management, Inc. and EPT Concord II, LLC. (2)
10.3	Employment Agreement, dated June 29, 2012, by and between Empire Resorts, Inc. and Charles Degliomini. (3)
10.4	Loan Agreement Amendment No. 1, dated August 8, 2012, by and between Empire Resorts, Inc. and Kien Huat Realty III Limited.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data File (XBRL).

(1) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.’s Current Report on Form 8-K (an “8-K”), filed with the Securities and Exchange Commission (the “Commission”) on May 31, 2012.

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(2) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.’s 8-K, filed with the Commission on July 6, 2012 (the “7/6/2012 8-K”).

(3) Incorporated by reference to Exhibit 10.2 to the 7/6/2012 8-K.

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SIGNATURES

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

	Empire Resorts, Inc.
Dated: August 14, 2012	/s/ Joseph A. D’Amato
	Joseph A. D’Amato
	Chief Executive Officer

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SIGNATURES

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

	Empire Resorts, Inc.
Dated: August 14, 2012	/s/ Laurette J. Pitts
	Laurette J. Pitts
	Chief Financial Officer

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EXHIBIT INDEX

10.1	Letter Agreement, dated May 30, 2012, by and between Monticello Raceway Management, Inc. and EPT Concord II, LLC. (1)
10.2	Letter Agreement, dated June 30, 2012, by and between Monticello Raceway Management, Inc. and EPT Concord II, LLC. (2)
10.3	Employment Agreement, dated June 29, 2012, by and between Empire Resorts, Inc. and Charles Degliomini. (3)
10.4	Loan Agreement Amendment No. 1, dated August 8, 2012, by and between Empire Resorts, Inc and Kien Huat Realty III Limited.
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data File (XBRL).

(1) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.’s Current Report on Form 8-K (an “8-K”), filed with the Securities and Exchange Commission (the “Commission”) on May 31, 2012.

(2) Incorporated by reference to Exhibit 10.1 to Empire Resorts, Inc.’s 8-K, filed with the Commission on July 6, 2012 (the “7/6/2012 8-K”).

(3) Incorporated by reference to Exhibit 10.2 to the 7/6/2012 8-K.

EX-10.4

Exhibit 10.4

AMENDMENT NO. 1 TO LOAN AGREEMENT

AMENDMENT NO. 1 TO THE LOAN AGREEMENT (this “Amendment”) made effective as of August 8, 2012 by and between EMPIRE RESORTS, INC., a Delaware corporation (hereinafter “Borrower”) and KIEN HUAT REALTY III LIMITED (hereinafter “Lender”).

WITNESSETH:

WHEREAS, Borrower and Lender entered into a Loan Agreement, dated as of November 17, 2010 (hereinafter the “Loan Agreement”);

WHEREAS, Borrower and Lender have agreed to extend the term of the loan (the “Loan”) made pursuant to the Loan Agreement in accordance with the terms of this Amendment (the “Extension”).

NOW, THEREFORE, the parties hereto agree to amend the Loan Agreement as follows, effective as of the date hereof:

1. The definition of “Interest Rate” in Section 1.01 shall be amended by deleting the reference to 5.00% in (ii) and inserting 7.50% in place thereof such that the interest rate applicable during the Extension Term shall be 7.50%.

2. To amend the Extended Maturity Date and the length of the Extension Term, Section 2.02(c)(iv) shall be amended by deleting the words “the Interest Payment Date in the month containing the two-year anniversary of the Initial Maturity Date” and inserting the words “December 31, 2014” in place thereof.

3. In consideration of the Extension, Borrower agrees to pay to Lender a one-time fee equal to $174,260.56 , or one percent (1%) of the outstanding balance of the Loan as of the date hereof.

4. Borrower hereby (1) unconditionally ratifies and confirms, renews and reaffirms all of its obligations under the Loan Agreement and each of the other Loan Documents, (2) acknowledges and agrees that such obligations remain in full force and effect, binding on and enforceable against it in accordance with the terms, covenants and conditions of the Loan Agreement as amended hereby and the other Loan Documents, in each case, without impairment, but subject to bankruptcy, insolvency and similar laws of general applicability relating to or affecting creditors’ rights and to general equity principles, and (3) represents, warrants and covenants that, to its knowledge, and taking into account the affect of this Amendment, (i) as of the date hereof, it is not in default under the Loan Agreement or any of the other Loan Documents beyond any applicable notice and cure periods, and (ii) as of the date hereof, there are no defenses, offsets or counterclaims against the Indebtedness.

The parties hereby agree that except as specifically provided in and modified by this Amendment, Loan Agreement is in all other respects hereby ratified and confirmed and references to the Loan Agreement shall be deemed to refer to the Loan Agreement as modified by this Amendment. Defined terms used and not otherwise defined herein shall have the meanings set forth in the Loan Agreement.

*        *        *         *        *

IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day and year first written above.

EMPIRE RESORTS, INC.
By:	/s/ Joseph A. D’Amato
Name:	Joseph A. D’Amato
Title:	Chief Executive Officer
KIEN HUAT REALTY III LIMITED
By:	/s/ Gerard Lim Ewe Keng
Name:	Gerard Lim Ewe Keng
Title:	Director

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Joseph A. D’Amato, Chief Executive Officer, certify that:

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

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

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

4. The registrant’s other certifying officer(s) 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(s) 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.

Dated: August 14, 2012	/s/ Joseph A. D’Amato
	Joseph A. D’Amato
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

RULE 13A-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Laurette J. Pitts, Chief Financial Officer, certify that:

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

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

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

4. The registrant’s other certifying officer(s) 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(s) 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.

Dated: August 14, 2012	/s/ Laurette J. Pitts
	Laurette J. Pitts
	Chief Financial Officer

EX-32.1

  Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

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

In connection with the Quarterly Report of Empire Resorts, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), I, Joseph A. D’Amato, Chief Executive Officer, do hereby certify, to my knowledge:

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

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

Date: August 14, 2012
By:	/s/ Joseph A. D’Amato
	Joseph A. D’Amato
	Chief Executive Officer

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

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

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

In connection with the Quarterly Report of Empire Resorts, Inc. (the “Company”) on Form 10-Q for the quarterly period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), I, Laurette J. Pitts, Chief Financial Officer, do hereby certify, to my knowledge:

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

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

Date: August 14, 2012
By:	/s/ Laurette J. Pitts
	Laurette J. Pitts
	Chief Financial Officer

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

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Stockholders Equity (Details Textual) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Mar. 13, 2012	Mar. 14, 2011
Schedule of Stockholders Equity (Textual) [Abstract]
Stock-based compensation expense	$ 167,000	$ 319,000	$ 351,000	$ 679,000
Total unrecognized compensation	$ 407,000		$ 407,000
Vesting period for unrecognized compensation cost to be recognized			2 years
Authorized issuance					92,414	59,548
Approximate value of the authorized issuance					234,000	114,000

XML

Accrued Expenses and Other Current Liabilities

6 Months Ended

Jun. 30, 2012

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued Expenses and Other Current Liabilities

Note D. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities are comprised of the following:

	June 30, 2012		December 31, 2011
	(in thousands)
Liability for horseracing purses	$	1,098	$	726
Accrued payroll		843		949
Accrued redeemable points		329		324
Liability to NYL		412		744
Liability for local progressive jackpot		596		419
Accrued professional fees		3,116		967
Accrued other		1,045		1,321
Total accrued expenses and other current liabilities	$	7,439	$	5,450

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Subsequent Events (Details Textual) (USD $)	6 Months Ended
	Jun. 30, 2012	Nov. 17, 2010
Subsequent Events (Textual) [Abstract]
Debt instrument loan agreement one-time fee	174,261
Percentage of fees as of outstanding principal amount	1.00%
Senior executive bonus	350,000
Expected extension in employment term	December 13, 2012 to December 31, 2014
Loans Payable [Member]
Subsequent Event [Line Items]
Extended maturity date of Bridge loan after amendment	May 17, 2013
Bridge Loan interest rate after amendment		5.00%
Amendment One [Member] | Loans Payable [Member]
Subsequent Event [Line Items]
Extended maturity date of Bridge loan after amendment	Dec. 31, 2014
Bridge Loan interest rate after amendment	7.50%
Maximum [Member]
Subsequent Event [Line Items]
Earnings before interest, tax depreciation and amortization bonus plan percentage	80.00%
Increased salary from company	230,000
Minimum [Member]
Subsequent Event [Line Items]
Earnings before interest, tax depreciation and amortization bonus plan percentage	50.00%
Increased salary from company	215,000

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Project Development Costs

6 Months Ended

Jun. 30, 2012

Project Development Costs [Abstract]

Project Development Costs

Note C. Project Development Costs

In December 2011, the Company entered into the Option Agreement with EPT, which was amended on March 30, 2012, April 30, 2012, May 30, 2012 and June 30, 2012. Pursuant to the Option Agreement, EPT granted the Company the option to lease certain EPT property located in Sullivan County, New York pursuant to the terms of a lease negotiated between the parties. In connection with the execution of the Option Agreement, the Company paid EPT the Option Payment ($750,000) which is classified as project development costs. The option may be exercised only to the extent the Company (or its affiliate) simultaneously exercises other options in connection with the Master Development Agreement. In addition, the Company’s rights and EPT’s obligations pursuant to the Option Agreement are subject to certain existing EPT agreements. Subject to the terms and conditions of the Option Agreement, EPT shall not grant to any third party the right to lease the EPT Property during the Option Exercise Period.

In addition to the Option Payment, project development costs included other direct costs incurred by the Company in consummating the Option Agreement and related lease, as well as other project development costs for the EPT Property. At June 30, 2012, project development costs totaled approximately $5.9 million.

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets:
Cash and cash equivalents	$ 11,823	$ 14,601
Restricted cash	1,870	1,354
Accounts receivable, net	1,706	1,478
Prepaid expenses and other current assets	3,971	2,769
Total current assets	19,370	20,202
Property and equipment, net	26,934	27,494
Project development costs	5,933	957
Other assets	602	1,181
Total assets	52,839	49,834
Current liabilities:
Accounts payable	2,235	2,079
Accrued expenses and other current liabilities	7,439	5,450
Total current liabilities	9,674	7,529
Long-term loan, related party	17,426	17,426
Total liabilities	27,100	24,955
Commitments and contingencies
Stockholders' equity:
Common stock, $0.01 par value, 150,000 shares authorized, 30,023 and 29,931 shares issued and outstanding in 2012 and 2011, respectively	300	299
Additional paid-in capital	145,553	145,204
Accumulated deficit	(126,969)	(127,479)
Total stockholders' equity	25,739	24,879
Total liabilities and stockholders' equity	52,839	49,834
Series A
Stockholders' equity:
Preferred stock, 5,000 shares authorized; $0.01 par value -	0	0
Series B
Stockholders' equity:
Preferred stock, 5,000 shares authorized; $0.01 par value -	0	0
Series E
Stockholders' equity:
Preferred stock, 5,000 shares authorized; $0.01 par value -	$ 6,855	$ 6,855

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Summary of Business and Basis for Presentation

6 Months Ended

Jun. 30, 2012

Summary of Business and Basis for Presentation [Abstract]

Summary of Business and Basis for Presentation

Note A. Summary of Business and Basis for Presentation

Basis for Presentation

The condensed consolidated financial statements and notes as of June 30, 2012 and December 31, 2011 and for the three and six months ended June 30, 2012 and 2011 are unaudited and include the accounts of Empire Resorts, Inc. (“Empire”) and subsidiaries (the “Company”).

The condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and the footnotes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. These condensed consolidated financial statements reflect all adjustments (consisting of normal recurring accruals) which are, in the Company’s opinion, necessary for the fair presentation of the financial position, results of operations and cash flows for the interim periods. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2011. The results of operations for the interim period may not be indicative of results to be expected for the full year.

Liquidity

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. The Company anticipates that its current cash and cash equivalents balances and cash generated from operations will be sufficient to meet its strategic and working capital requirements for at least the next twelve months. The adequacy of these resources to meet the Company’s liquidity needs beyond that period will depend on the Company’s growth, operating results, and ability to refinance or otherwise satisfy its long-term loan with a related party. If the Company requires additional capital resources to grow its business at a future date, it may seek to sell additional debt or equity. The sale of additional equity could result in additional dilution to the Company’s existing stockholders and financing arrangements may not be available to the Company, or may not be available in amounts or on terms acceptable to the Company. See Note I. Subsequent Events.

Nature of Business

Through Empire’s wholly-owned subsidiary, Monticello Raceway Management, Inc. (“MRMI”), the Company currently owns and operates Monticello Casino and Raceway, a 45,000 square foot video gaming machine (“VGM”) and harness horseracing facility located in Monticello, New York, 90 miles northwest of New York City. Monticello Casino and Raceway operates 1,110 VGMs, which includes 20 electronic table game positions (“ETGs”) as an agent for the New York Lottery (“NYL”). VGM activities in the State of New York are overseen by the NYL. VGMs are similar to slot machines, but they are connected to a central system and report financial information to the central system. The Company also generates 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.

On November 4, 2011, each holder of a New York racetrack license with a VGM facility, with the exception of Aqueduct who has a management agreement, received a joint letter (the “Letter”) from the NYL and the New York State Racing and Wagering Board (“RWB”), which notified the license holders that RWB has commenced its review of the holder’s racetrack license renewal application for calendar year 2012. The Letter said that, for the first time since the commencement of VGM operations, the NYL and RWB will be conducting a joint review of applicant license materials. While there has been no change to the laws governing racing or VGM operations, the Letter also indicated that the RWB is considering an open competition process for the re-award of licenses forfeited for failure to meet licensing and operating standards and is also considering whether all track licenses should be subject to an open competition for determining licensure for the 2013 calendar year. Generally, the annual license renewal process requires the RWB to review the financial responsibility, experience, character and general fitness of MRMI and its management. The Company cooperated fully with RWB and NYL during this annual review in pursuit of the renewal of MRMI’s racetrack and simulcast licenses. The Company submitted its 2012 license renewal applications and supplemental information to RWB and NYL. RWB informed the Company that MRMI continued to operate under the 2011 licenses prior to RWB’s formal action on MRMI’s 2012 license renewal applications. On May 30, 2012, the RWB granted MRMI’s license renewals through December 31, 2012, conditioned upon the Company’s continued cooperation with RWB staff regarding certain stockholders and the requirement that the Company immediately notify the RWB in the event of any change in percentages of Empire’s ownership and whether certain Empire stockholders vote their shares.

The Company has joined with other VGM facility operators in New York State to form the New York Gaming Association, whose principal effort is to seek approval for passage of a constitutional amendment authorizing table games at the VGM facilities in New York, which would permit the Company to develop and operate a full-scale casino which would include slot machines and table game wagering and the extension of credit. Generally, a constitutional amendment must be approved by both houses of the New York State Legislature (“Legislature”), approved again by a newly elected Legislature, and approved by the voters at a general election, in which instance it becomes effective on the following January 1. On March 15, 2012, Governor Andrew Cuomo, Assembly Speaker Sheldon Silver and Senate Majority Leader Dean Skelos announced that a constitutional amendment authorizing up to seven non-tribal casinos at locations to be determined by the Legislature, was approved by the Legislature. A newly elected Legislature would have to pass the amendment again next year before it goes to a general referendum in November 2013. However, there can be no assurance given that an amendment to the New York State Constitution to permit full-scale casino gaming will be passed in a timely manner, or at all, or that, if such amendment were passed, the Company would be able to effectively develop and operate a full-scale casino.

The enacted New York State budget includes legislation to replace the RWB and NYL with a Gaming Commission that will establish and supervise four divisions to carry out responsibilities relating to the regulation and enforcement of lottery, charitable gaming, gaming, and horse racing and pari-mutuel wagering. Each division will be supervised by a division director. The gaming division will be responsible for the appropriate operation and administration of the Company’s VGM operations and the horse racing and pari-mutuel wagering division will be responsible for the supervision, regulation and administration of the Company’s horse racing and pari-mutuel wagering activities. The Gaming Commission was expected to begin on or about October 1, 2012; however, as part of the New York Governor’s Program Bill #45, the Gaming Commission is expected to begin on or about February 1, 2013.

Development

On April 12, 2011, Empire announced it had executed an exclusivity agreement with Entertainment Properties Trust (“EPR”) and MSEG LLC to explore exclusively the joint development of the companies’ respective properties located in Sullivan County, New York. EPR’s subsidiary EPT Concord II, LLC (“EPT”) is the sole owner of 1,500 acres located at the site of the former Concord Resort (the “EPT Property”). The exclusivity agreement also committed the parties to work towards the execution of a master development agreement (the “Master Development Agreement”) to develop the EPT Property.

On December 21, 2011, the Company entered into an option agreement with EPT, which agreement was amended on March 30, 2012, April 30, 2012, May 30, 2012 and June 30, 2012 (as amended, (the “Option Agreement”). Pursuant to the Option Agreement, EPT granted the Company a sole and exclusive option (the “Option”) to lease certain EPT property located in Sullivan County, New York pursuant to the terms of a lease negotiated between the parties. The initial term of the Option Agreement expires on December 21, 2012 (the “Option Exercise Period”). In addition, subject to the conditions of the Option Agreement, the Option Exercise Period may be extended for one or more six month periods; provided, however, in no event shall the Option Exercise Period extend beyond June 30, 2013.

In connection with the execution of the Option Agreement, the Company paid EPT an option payment in the amount of $750,000 (the “Option Payment”) which was classified as project development costs. Any extension of the Option Exercise Period shall be accompanied by an additional option payment of $750,000. The Option may be exercised only to the extent the Company (or its affiliate) simultaneously exercises other options in connection with the master development agreement. Pursuant to the Option Agreement, the parties agreed to work towards entering into a master development agreement by October 1, 2012. In addition, the Company’s rights and EPT’s obligations pursuant to the Option Agreement are subject to certain existing EPT agreements. Subject to the terms and conditions of the Option Agreement, EPT shall not grant to any third party the right to lease the EPT Property during the Option Exercise Period.

On March 8, 2012, EPT and Empire presented an overview of the master plan for redevelopment of the former EPT Property in Sullivan County, New York to the Town of Thompson Town Board. In addition, on March 8, 2012, EPT and Empire formally submitted the proposed redevelopment plan to the Town of Thompson for an assessment of its environmental impact as prescribed by the State Environmental Quality Review (“SEQR”) provisions of the New York Environmental Conservation Law. Thereafter, EPT submitted the Draft Generic Environmental Impact Statement (DGEIS) and Draft Environmental Impact Statement (DEIS) to the Town of Thompson for the redevelopment plan. On July 25, 2012, the Town of Thompson provided EPT with the Notice of Completion of Draft DGEIS/DEIS and Notice of SEQR Hearing. The SEQR hearing is scheduled for August 28, 2012.

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Project Development Costs (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2011	Jun. 30, 2012
Project Development Costs (Textual) [Abstract]
Option payment classified project development costs	$ 750,000
Project development costs	$ 957,000	$ 5,933,000

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Long Term Loan Related Party (Details Textual) (USD $)	1 Months Ended	6 Months Ended
	Nov. 17, 2010	Jun. 30, 2012	May 20, 2011
Short Term Loan Related Party (Textual) [Abstract]
Principal sum evidenced by the Note such that the unconverted portion multiple		1.00
Bridge Loan [Member]
Short Term Loan Related Party (Textual) [Abstract]
Bridge Loan bears interest rate	5.00%
Extend maturity date of Bridge loan		May 17, 2013
Possible maturity date of bridge loan		Jun. 30, 2011
Number of business days after rights offering expire		5 days
Empire Prepaid Indebtedness in Amount Equal Aggregate Amount of Gross Proceeds Received	100.00%
Principal amount of the Bridge Loan extended		2 years
Bridge Loan [Member] | Kien Huat Realty Limited [Member]
Short Term Loan Related Party (Textual) [Abstract]
Short-term bridge loan in the principal amount	35,000,000		17,600,000
Provisions for Loan Agreement	1,000
Non-assessable shares of Empire's common stock at a conversion rate		377
shares of common stock	$ 1,000
principal amount, which represents a conversion price	$ 2.65
Conversion Price in Effect on Measuring Date	200.00%
Average of last reported bid prices common stock for consecutive trading days		20 days

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note B. Summary of Significant Accounting Policies

Revenue recognition and Promotional allowances

Gaming revenue is the net difference between gaming wagers and payouts for prizes from VGMs, 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 NYL’s share of VGM revenue and the Monticello Harness Horsemen’s Association and Agriculture and New York State Horse Breeding Development Fund’s contractually required percentages.

Food, beverage, racing and other revenue, includes food and beverage sales, racing revenue earned from pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks and miscellaneous income. The Company recognizes racing revenues before deductions of such related expenses as purses, stakes and awards. The statutory 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”) 605-50, “Revenue Recognition—Customer Payments and Incentives”.

The retail value of complimentary food, beverages and other items provided to the Company’s guests is included in gross revenues and then deducted as promotional allowances. The estimated cost of providing such food, beverage and other items as promotional allowances is included in food, beverage, racing and other expense. In addition, promotional allowances include non-subsidized free play offered to the Company’s guests based on their relative gaming worth and prizes included in certain promotional marketing programs.

The retail value amounts included in promotional allowances for the three and six months ended June 30, 2012 and 2011 are as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(in thousands)
Food and beverage	$	420	$	160	$	740	$	463
Non-subsidized free play		317		198		250		104
Players club awards		127		99		240		173
Total retail value of promotional allowances	$	864	$	457	$	1,230	$	740

The estimated cost of providing complimentary food, beverages and other items for the three and six months ended June 30, 2012 and 2011 are as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(in thousands)
Food and beverage	$	429	$	146	$	756	$	502
Non-subsidized free play		187		116		148		61
Players club awards		127		99		240		173
Total cost of promotional allowances	$	743	$	361	$	1,144	$	736

Accounts receivable

Accounts receivable, net of allowances, are stated as 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. In the normal course of business, the Company settles wagers for other racetracks and is 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. As of June 30, 2012 and December 31, 2011, the Company recorded an allowance for doubtful accounts of approximately $202,000 and $177,000, respectively.

Earnings (loss) per common share

The Company computes basic earnings (loss) per share by dividing net income (loss) applicable to common shares by the weighted-average common shares outstanding for the period. Diluted earnings (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 earnings (loss) of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three months ended June 30, 2012 and the six months ended June 30, 2012 and 2011 were the same.

The following table shows the approximate number of common stock equivalents outstanding at June 30, 2012 and 2011 that could potentially dilute basic earnings per share in the future, but were not included in the calculation of diluted loss per share for the three months ended June 30, 2012, because their inclusion would have been anti-dilutive.

	Outstanding at June 30,
	2012		2011
Options		2,078,000		2,553,000
Warrants		1,083,000		1,083,000
Option matching rights		1,277,000		1,795,000
Restricted stock		170,000		17,000
Shares to be issued upon conversion of convertible debt		19,726,000		19,726,000
Total		24,334,000		25,174,000

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 its financial assets and liabilities that had not been previously carried at fair value. The Company’s financial instruments are comprised of current assets, current liabilities and a long-term loan, related party. Current assets and current liabilities approximate fair value due to their short-term nature. As of June 30, 2012, the Company’s management was unable to estimate reasonably the fair value of the long-term loan, related party due to the inability to obtain quotes for similar credit facilities.

Estimates and assumptions

The preparation of financial statements in conformity with 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.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent accounting pronouncements

The Company does not believe that any recently issued, but not effective, accounting standards, if currently adopted, will have a material effect on its consolidated financial position, results of operations, or cash flows.

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Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000	5,000
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	150,000	150,000
Common stock, shares issued	30,023	29,931
Common stock, shares outstanding	0	29,931
Series A
Preferred stock, per share liquidation value	$ 1,000	$ 1,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Series B
Preferred stock, per share liquidation value	$ 29	$ 29
Preferred stock, shares issued	44	44
Preferred stock, shares outstanding	44	44
Series E
Preferred stock, per share redemption value	$ 10	$ 10
Preferred stock, shares issued	1,731	1,731
Preferred stock, shares outstanding	1,731	1,731

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Accrued Expenses and Other Current Liabilities (Tables)

6 Months Ended

Jun. 30, 2012

Accrued Expenses and Other Current Liabilities [Abstract]

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities are comprised of the following:

	June 30, 2012		December 31, 2011
	(in thousands)
Liability for horseracing purses	$	1,098	$	726
Accrued payroll		843		949
Accrued redeemable points		329		324
Liability to NYL		412		744
Liability for local progressive jackpot		596		419
Accrued professional fees		3,116		967
Accrued other		1,045		1,321
Total accrued expenses and other current liabilities	$	7,439	$	5,450

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Aug. 10, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	EMPIRE RESORTS INC
Entity Central Index Key	0000906780
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		30,023,287

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Summary of Business and Basis for Presentation (Details Textual) (USD $)	6 Months Ended
	Jun. 30, 2012 Game_Positions Machines sqft sqmi acre
Summary of Business and Basis for Presentation (Textual) [Abstract]
Size of video gaming machine and harness horse racing facility	45,000
Distance From northwest of New York City	90
Number of video gaming machine	1,110
Number of electronic table game	20
Joint development of properties sole owner of area covered	1,500
Option agreement exercised period	beyond June 30, 2013
Option payment deferred lease costs	$ 750,000

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Revenues:
Gaming	$ 16,427	$ 16,146	$ 31,041	$ 29,019
Food, beverage, racing & other	3,296	2,877	6,330	5,196
Gross revenues	19,723	19,023	37,371	34,215
Less: Promotional allowances	(864)	(457)	(1,230)	(740)
Net revenues	18,859	18,566	36,141	33,475
Costs and expenses:
Gaming	11,776	11,498	22,546	21,374
Food, beverage, racing and other	2,746	2,624	5,495	5,012
Selling, general and administrative	3,372	2,808	6,103	4,895
Stock-based compensation	166	319	351	679
Depreciation	344	327	690	648
Total costs and expenses	18,404	17,576	35,185	32,608
Income from operations	455	990	956	867
Interest expense	(218)	(342)	(443)	(780)
Interest income	3	2	3	5
Income before income taxes	240	650	516	92
Income tax provision	0	0	(6)	0
Net income	240	650	510	92
Undeclared dividends on preferred stock	(388)	(388)	(776)	(776)
Net (loss)income applicable to common shares	$ (148)	$ 262	$ (266)	$ (684)
Weighted average common shares outstanding, basic	30,023	26,295	29,979	24,749
Weighted average common shares outstanding, diluted	30,023	38,318	29,979	24,749
(Loss) income per common share, basic	$ 0.00	$ 0.01	$ (0.01)	$ (0.03)
(Loss) income per common share, diluted	$ 0.00	$ 0.01	$ (0.01)	$ (0.03)

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Concentration

6 Months Ended

Jun. 30, 2012

Concentration [Abstract]

Concentration

Note G. Concentration

One debtor, Churchill Downs, Incorporated represented approximately 19% and 11% of the total accounts receivable as of June 30, 2012 and December 31, 2011, respectively.

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Stockholders Equity

6 Months Ended

Jun. 30, 2012

Stockholders Equity [Abstract]

Stockholders' Equity

Note F. Stockholders’ Equity

Stock-based compensation expense was approximately $167,000 and $319,000 for the three months ended June 30, 2012 and 2011, respectively, and approximately $351,000 and $679,000 for the six months ended June 30, 2012 and 2011, respectively. As of June 30, 2012, there was approximately $407,000 of total unrecognized compensation cost related to non-vested share-based compensation awards granted under Empire’s plans. That cost is expected to be recognized over the remaining vesting period of less than two years. This expected cost does not include the impact of any future stock-based compensation awards.

On March 13, 2012, Empire’s Board of Directors (the “Board”) authorized the issuance of 92,414 shares of Empire’s common stock as payment of dividends due for the year ended December 31, 2011 on its Series B preferred stock. The value of these shares when issued was approximately $234,000.

On March 14, 2011, the Board authorized the issuance of 59,548 shares of Empire’s common stock as payment of dividends due for the year ended December 31, 2010 on its Series B preferred stock. The approximate value of these shares when issued was $114,000.

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Accrued Expenses and Other Current Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Accounts Payable and Accrued Liabilities, Current
Liability for horseracing purses	$ 1,098	$ 726
Accrued payroll	843	949
Accrued redeemable points	329	324
Liability to NYL	412	744
Liability for local progressive jackpot	596	419
Accrued professional fees	3,116	967
Accrued other	1,045	1,321
Total accrued expenses and other current liabilities	$ 7,439	$ 5,450

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Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Summary of retail value amounts included in promotional allowances and estimated cost of providing complimentary food, beverages and other items
Total retail value of promotional allowances	$ 864	$ 457	$ 1,230	$ 740
Total cost of promotional allowances	743	361	1,144	736
Food and beverage [Member]
Summary of retail value amounts included in promotional allowances and estimated cost of providing complimentary food, beverages and other items
Total retail value of promotional allowances	420	160	740	463
Total cost of promotional allowances	429	146	756	502
Non-subsidized free play [Member]
Summary of retail value amounts included in promotional allowances and estimated cost of providing complimentary food, beverages and other items
Total retail value of promotional allowances	317	198	250	104
Total cost of promotional allowances	187	116	148	61
Players club awards [Member]
Summary of retail value amounts included in promotional allowances and estimated cost of providing complimentary food, beverages and other items
Total retail value of promotional allowances	127	99	240	173
Total cost of promotional allowances	$ 127	$ 99	$ 240	$ 173

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Revenue recognition and Promotional allowances

Revenue recognition and Promotional allowances

Gaming revenue is the net difference between gaming wagers and payouts for prizes from VGMs, 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 NYL’s share of VGM revenue and the Monticello Harness Horsemen’s Association and Agriculture and New York State Horse Breeding Development Fund’s contractually required percentages.

Food, beverage, racing and other revenue, includes food and beverage sales, racing revenue earned from pari-mutuel wagering on live harness racing and simulcast signals to and from other tracks and miscellaneous income. The Company recognizes racing revenues before deductions of such related expenses as purses, stakes and awards. The statutory 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”) 605-50, “Revenue Recognition—Customer Payments and Incentives”.

The retail value of complimentary food, beverages and other items provided to the Company’s guests is included in gross revenues and then deducted as promotional allowances. The estimated cost of providing such food, beverage and other items as promotional allowances is included in food, beverage, racing and other expense. In addition, promotional allowances include non-subsidized free play offered to the Company’s guests based on their relative gaming worth and prizes included in certain promotional marketing programs.

Accounts receivable

Accounts receivable

Accounts receivable, net of allowances, are stated as 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. In the normal course of business, the Company settles wagers for other racetracks and is 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.

Earnings (loss) per common share

Earnings (loss) per common share

The Company computes basic earnings (loss) per share by dividing net income (loss) applicable to common shares by the weighted-average common shares outstanding for the period. Diluted earnings (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 earnings (loss) of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three months ended June 30, 2012 and the six months ended June 30, 2012 and 2011 were the same.

Fair value

Fair value

The Company follows the provisions of ASC 820, “Fair Value Measurement,” issued by the FASB for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value, requires certain disclosures and discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow) and the cost approach (cost to replace the service capacity of an asset or replacement cost). The Company chose not to elect the fair value option as prescribed by FASB, for its financial assets and liabilities that had not been previously carried at fair value. The Company’s financial instruments are comprised of current assets, current liabilities and a long-term loan, related party. Current assets and current liabilities approximate fair value due to their short-term nature. As of June 30, 2012, the Company’s management was unable to estimate reasonably the fair value of the long-term loan, related party due to the inability to obtain quotes for similar credit facilities.

Estimates and assumptions

Estimates and assumptions

The preparation of financial statements in conformity with 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.

Reclassifications

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Recent accounting pronouncements

Recent accounting pronouncements

The Company does not believe that any recently issued, but not effective, accounting standards, if currently adopted, will have a material effect on its consolidated financial position, results of operations, or cash flows.

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Note H. Commitments and Contingencies

Legal Proceedings

Bryanston Group v. Empire Resorts, Inc.

A complaint has been filed in the Supreme Court of The State of New York, New York County (the “New York County Court”) on or about July 12, 2010 against Empire. The lawsuit arises out of a recapitalization agreement entered into on December 10, 2002 pursuant to which the Company issued Series E preferred stock to Bryanston Group, Inc. and Stanley Tollman, among others. The original complaint was brought by Bryanston Group, Inc. and Stanley Tollman alleging that the Company breached the terms of the recapitalization agreement by (i) failing to use the funds from the 2009 investment by Kien Huat to redeem the Series E preferred shares and pay dividends on the shares; and (ii) paying in excess of $1 million per year in operating expenses (including paying the settlement to the Company’s former chief executive officer, Joseph Bernstein) while not redeeming the Series E preferred shares and paying dividends on the shares. The plaintiffs had sought a preliminary injunction to require the Company to put into escrow funds sufficient to pay the purchase price for the redemption of the Series E shares and the dividends. On August 20, 2010, the New York County Court denied plaintiffs’ request. On September 24, 2010, the Company filed a motion to dismiss the original complaint. The Court denied the Company’s motion to dismiss the original complaint on March 28, 2011. The Company filed an answer to the original complaint. On July 10, 2012, plaintiffs filed and served an amended complaint. The amended complaint, in addition to the allegations from the original complaint, alleges that the Company breached the terms of the recapitalization agreement in two additional ways by (i) failing to use the funds from the 2004 issuance of senior secured convertible notes to redeem the Series E preferred shares and pay dividends; and (ii) failing to use the funds from the 2010 investment by Kien Huat to redeem the Series E preferred shares and pay dividends. The Company filed its answer to the amended complaint on or about July 23, 2012. While the Company cannot predict the outcome of this litigation, it believes the lawsuit is without merit and will aggressively defend its interests.

Monticello Raceway Management, Inc. v. Concord Associates L.P.

On January 25, 2011, Empire’s subsidiary, MRMI, filed a complaint in the Sullivan County Court against Concord, an affiliate of Louis R. Cappelli who is a significant stockholder. The lawsuit seeks amounts that MRMI believes is owed to it under an agreement between Concord, MRMI and the Monticello Harness Horsemen’s Association, Inc. (the “Horsemen’s Agreement”). Pursuant to the Horsemen’s Agreement, until the earlier to occur of the commencement of operations at the gaming facilities to be developed by Concord at the site of the former Concord hotel and former Concord resort or July 31, 2011, MRMI was to continue to pay to the Monticello Harness Horsemen’s Association, Inc. 8.75% of the net win from VGM activities at Monticello Casino and Raceway, and Concord was to pay the difference, if any, between $5 million per year and 8.75% of the net win from VGM activities (“VGM Shortfall”) during such period. As of December 31, 2010, MRMI believes Concord owed it approximately $300,000 for the VGM Shortfall. Concord has contested its responsibility to make such VGM Shortfall payments to MRMI and on March 10, 2011 Concord filed a Motion to Dismiss, claiming that there was no shortfall because the term of the obligation was a two-year period, not annually. MRMI filed reply affirmations and requested that the Sullivan County Court treat Concord’s motion and the Company’s cross-motion as summary judgment motions. On June 23, 2011, the Court advised the parties that it would treat the Company’s cross-motion as a summary judgment motion. MRMI filed its reply affirmation on August 8, 2011. On November 4, 2011, the Sullivan County Court denied Concord’s motion to dismiss, and denied MRMI’s summary judgment motion without prejudice to renew after conducting pre-trial discovery. On December 8, 2011, MRMI filed an appeal of the denial of the summary judgment motion and on December 9, 2011, Concord Associates filed a cross-appeal for the portion of the decision that denied Concord’s motion to dismiss. MRMI and Concord are engaging in pre-trial discovery. While MRMI is unable at this time to estimate the likelihood of a favorable outcome in this matter, it intends to prosecute vigorously its claims against Concord.

Concord Associates, L.P. v. Entertainment Properties Trust

On March 7, 2012, Concord and various affiliates filed a complaint against EPR and the Company in the United States District Court for the Southern District of New York (the “SDNY”). The lawsuit arises out of the Company’s exclusivity agreement and option agreement with EPR for the potential development of the site of the EPT Property located in Sullivan County, New York. Following a pre-motion conference held on April 25, 2012, Concord and its affiliates filed an amended complaint on June 18, 2012, against EPR and the Company, and added Genting New York LLC and Kien Huat as defendants. The amended complaint asserts the same federal antitrust claims and seeks the same damages as in the original complaint alleging that all defendants have obstructed and delayed Concord from establishing a harness racetrack and VGM facility at the site of the former Concord Hotel in the Town of Thompson, New York, that would compete with other “reasonably accessible casinos/racinos for legal casino gaming business” and other “reasonably accessible casino hotel and resort facilities for tourism patrons” in the “New York-Northeastern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area.” As in the original complaint, Concord’s amended complaint further asserts that the Company has monopolized the market for “gaming and racing” in the “Catskills Region” and has tortiously interfered with EPT’s performance of its contracts and business relations with Concord. The amended complaint seeks damages in an amount to be determined at trial but not less than $500 million (subject to automatic trebling under federal antitrust laws), unspecified punitive damages with respect to Concord’s tortious interference claims, and permanent injunctive relief against EPR and the Company’s agreements. By Stipulation and Order entered by the SDNY on July 6, 2012, the Company shall answer, move or otherwise respond to the amended complaint by July 25, 2012. In letters dated July 25, 2012, the defendants requested a pre-motion conference concerning the Company’s proposed motion to dismiss the amended complaint. On July 27, 2012, Concord submitted a letter in response to the defendant letters. Although the Company is continuing to assess its available options in terms of responding to this amended complaint, the Company believes this lawsuit is without merit and will aggressively defend its interests.

Other Proceedings

The Company is a party from time to time to various other 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 the Company’s consolidated financial position, results of operations or cash flows.

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Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

Note I. Subsequent Events

On August 8, 2012, the Company and Kien Huat entered into Amendment No. 1 (the “Amendment”) to the Loan Agreement. Pursuant to the Amendment, the maturity date of the loan made pursuant to the Loan Agreement (the “Loan”) was extended from May 17, 2013 to December 31, 2014. In consideration of the extension of the maturity date of the Loan, effective as of the Amendment Date, the rate of interest was amended to be 7.5% per annum in place of 5% per annum. In addition, the Company agreed to pay Kien Huat upon execution a one-time fee of $174,261, or 1% of the outstanding principal amount of the Loan as of the date of the Amendment. Except for these amendments, the Loan Agreement remains unchanged and in full force and effect.

On August 8, 2012, the Company adopted a cash bonus plan for the senior executives of the Company. Pursuant to the bonus plan, up to $350,000 shall be set aside for possible award to Joseph D’Amato, Laurette Pitts, Nanette Horner and Charles Degliomini for fiscal year 2012. Bonuses may be awarded to each of the named senior executives in amounts determined by the Compensation Committee of the Board of Directors and based upon the recommendation of Mr. D’Amato for the named senior executives other than himself. Bonuses totaling up to the $350,000 aggregate maximum under this plan may be awarded in the event MRMI’s earnings before interest, tax, depreciation and amortization (“EBITDA”) for the 2012 fiscal year meets or exceeds 80% of the target EBITDA that is established by the Compensation Committee at the beginning of each fiscal year. The aggregate maximum amount available for award pursuant to the bonus plan may be reduced in proportion to the amount by which MRMI’s EBITDA for the fiscal year misses the target EBITDA. The amount of individual bonuses awarded pursuant to the bonus plan will be based 50% upon whether MRMI met or exceeded its EBITDA target and 50% based upon individual performance in the fiscal year, which shall be recommended Mr. D’Amato and approved by the Compensation Committee. Awards shall be made pursuant to the bonus plan in the first quarter of the succeeding fiscal year.

On August 8, 2012, the Board of Directors appointed Laurette Pitts, the Company’s current Senior Vice President and Chief Financial Officer, as Chief Operating Officer of the Company. In addition to Ms. Pitts’ new title, Ms. Pitts will retain her current titles. In connection with such appointment, the Company expects to extend Ms. Pitts’ employment term from December 13, 2012 to December 31, 2014 and to increase her salary from $215,000 to $230,000 per year. Please see the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2011, which was filed on March 19, 2012, for Ms. Pitts’ biographical information.

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of retail value amounts included in promotional allowances

The retail value amounts included in promotional allowances for the three and six months ended June 30, 2012 and 2011 are as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(in thousands)
Food and beverage	$	420	$	160	$	740	$	463
Non-subsidized free play		317		198		250		104
Players club awards		127		99		240		173
Total retail value of promotional allowances	$	864	$	457	$	1,230	$	740

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 three and six months ended June 30, 2012 and 2011 are as follows:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(in thousands)
Food and beverage	$	429	$	146	$	756	$	502
Non-subsidized free play		187		116		148		61
Players club awards		127		99		240		173
Total cost of promotional allowances	$	743	$	361	$	1,144	$	736

Summary of the approximate number of common stock equivalents outstanding

The following table shows the approximate number of common stock equivalents outstanding at June 30, 2012 and 2011 that could potentially dilute basic earnings per share in the future, but were not included in the calculation of diluted loss per share for the three months ended June 30, 2012, because their inclusion would have been anti-dilutive.

	Outstanding at June 30,
	2012		2011
Options		2,078,000		2,553,000
Warrants		1,083,000		1,083,000
Option matching rights		1,277,000		1,795,000
Restricted stock		170,000		17,000
Shares to be issued upon conversion of convertible debt		19,726,000		19,726,000
Total		24,334,000		25,174,000

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Summary of Significant Accounting Policies (Details Textual) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Summary of Significant Accounting Policies (Textual) [Abstract]
Allowance for doubtful accounts	$ 202,000	$ 177,000

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Concentration (Details Textual) (Credit Concentration Risk [Member])	Jun. 30, 2012	Dec. 31, 2011
Credit Concentration Risk [Member]
Concentration (Textual) [Abstract]
Total accounts receivable percentage	19.00%	11.00%

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net income	$ 510	$ 92
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	690	648
Provision (recovery) of doubtful accounts	25	(63)
Stock-based compensation	351	679
Changes in operating assets and liabilities:
Restricted cash -NY Lottery and Purse Accounts	(702)	(345)
Accounts receivable	(253)	(90)
Prepaid expenses and other current assets	(1,203)	250
Other assets	579	579
Accounts payable	156	(152)
Accrued expenses and other current liabilities	(107)	(200)
Net cash used in operating activities	46	1,398
Investing activities:
Purchases of property and equipment	(130)	(409)
Restricted cash - Racing capital improvement	186	27
Project development costs	(2,880)	0
Net cash used in investing activities	(2,824)	(382)
Financing activities:
Stock issuance costs	0	(126)
Net cash used in financing activities	0	(126)
Net (decrease) increase in cash and cash equivalents	(2,778)	890
Cash and cash equivalents, beginning of period	14,601	12,960
Cash and cash equivalents, end of period	11,823	13,850
Supplemental disclosures of cash flow information:
Interest paid	445	819
Non-cash investing and financing activities:
Common stock issued in settlement of preferred stock dividends	234	114
Repayment of long term loan, related party with proceeds from stock issued in rights offering	0	17,574
Project development costs included in accrued expenses	$ 2,095	$ 0

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Long-Term Loan, Related Party

6 Months Ended

Jun. 30, 2012

Short-Term Loan, Related Party [Abstract]

Short-Term Loan, Related Party

Note E. Long-Term Loan, Related Party

On November 17, 2010, Empire entered into a loan agreement (the “Loan Agreement”) with Kien Huat Realty III Limited (“Kien Huat”), pursuant to which Kien Huat agreed to make a short-term bridge loan in the principal amount of $35 million (the “Bridge Loan”) to Empire, subject to the terms and conditions set forth in the Loan Agreement and represented by a convertible promissory note (the “Note”), dated November 17, 2010. Proceeds of the Bridge Loan were used to effectuate the repurchase of the Company’s then outstanding Senior Notes in accordance with the terms of the Settlement Agreement between the Company and certain of the beneficial owners of the Senior Notes dated as of September 23, 2010.

The Note provided that the Bridge Loan bears interest at a rate of 5% per annum, payable in cash in arrears monthly, during its initial term. The maturity date of the Bridge Loan was the earlier of the consummation of Empire’s rights offering and June 30, 2011 (the “Outside Date”). As of May 20, 2011, the date of the consummation of the rights offering, certain conditions were satisfied including the following: (1) five business days have passed after the date on which the rights issued in the proposed rights offering expire and the offering of Empire’s common stock pursuant thereto is terminated, (2) Empire prepaid the indebtedness in an amount equal to 100% of the aggregate amount of gross proceeds received by it pursuant to the rights offering, (3) the proceeds from the rights offering are insufficient to repay the Bridge Loan in full and Empire has not otherwise prepaid the Bridge Loan in full, and (4) no monetary or other material default as defined in the Loan Agreement is continuing, and thus, the maturity date of the remaining unpaid principal amount of the Bridge Loan was extended for a term of two years at an interest rate of 5% per annum convertible at a price equal to the exercise price of the rights issued in the rights offering (period of such extension is referred to as the “Extension Term”).

Subject to and upon compliance with the provisions of the Loan Agreement, during the Extension Term, Kien Huat has the right to convert all or any portion of the principal sum evidenced by the Note such that the unconverted portion is $1,000 or a multiple of $1.00 in excess thereof into fully paid and non-assessable shares of Empire’s common stock at a conversion rate of initially 377 shares of common stock per $1,000 in principal amount, which represents a conversion price of approximately $2.65 per share, subject to adjustment in accordance with the Loan Agreement.

If, as of any date during the Extension Term (the “Measuring Date”), the average of the last reported bid prices of Empire’s common stock for the twenty consecutive trading days as defined in the Loan Agreement, ending on the trading day prior to the Measuring Date exceeds 200% of the conversion price in effect on the Measuring Date, then Empire is entitled to elect that Kien Huat convert all of the principal sum evidenced by the Note into shares of its common stock in accordance with the terms and provisions of the Loan Agreement. If Empire does not elect to force conversion of the Note and there have been no events of default as defined in the Loan Agreement, Empire may voluntarily prepay the Bridge Loan in whole or in part, with all interest accrued through the applicable period, absent notice from Kien Huat of its election to convert the Note.

The Company consummated its rights offering on May 20, 2011 and the proceeds were used to satisfy approximately $17.6 million of the Bridge Loan. Pursuant to the Loan Agreement, the Company has satisfied the conditions to extend the maturity date of the Bridge Loan to May 17, 2013. See Note I. Subsequent Events.

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Commitments and Contingencies (Details Textual) (USD $)	6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2012 Empire [Member]	Dec. 31, 2010 Concord [Member]
Commitments and Contingencies (Textual) [Abstract]
Percent of net win payable from VGM activities		8.75%
Amount of net win from VGM activities		$ 5,000,000
VGM Shortfall			300,000
Term of the obligation	2 years
Damages in an amount	500,000,000
Commitments and Contingencies (Additional Textual) [Abstract]
Operating Expenses hurdle rate	$ 1,000,000

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Summary of Significant Accounting Policies (Details 1)	Jun. 30, 2012	Jun. 30, 2011
Summary of the approximate number of common stock equivalents outstanding
Total number of common stock equivalents outstanding	24,334,000	25,174,000
Options [Member]
Summary of the approximate number of common stock equivalents outstanding
Total number of common stock equivalents outstanding	2,078,000	2,553,000
Warrants [Member]
Summary of the approximate number of common stock equivalents outstanding
Total number of common stock equivalents outstanding	1,083,000	1,083,000
Option matching rights [Member]
Summary of the approximate number of common stock equivalents outstanding
Total number of common stock equivalents outstanding	1,277,000	1,795,000
Restricted stock [Member]
Summary of the approximate number of common stock equivalents outstanding
Total number of common stock equivalents outstanding	170,000	17,000
Shares to be issued upon conversion of convertible debt [Member]
Summary of the approximate number of common stock equivalents outstanding
Total number of common stock equivalents outstanding	19,726,000	19,726,000