10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________ 

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2017

OR

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

Commission file number 1-12522

_______________________________________ 

EMPIRE RESORTS, INC.

(Exact name of registrant as specified in its charter)

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

(845) 807-0001

(Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically 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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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

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

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

As of April 30, 2017, there were 31,176,869 shares of the registrant’s common stock outstanding.

INDEX

PART I FINANCIAL INFORMATION		1
ITEM 1.	FINANCIAL STATEMENTS (Unaudited)	1
	Condensed Consolidated Balance Sheets as of March 31, 2017 and December 31, 2016	1
	Condensed Consolidated Statements of Operations for the Three-Month Periods Ended March 31, 2017 and 2016	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three-Month Periods Ended March 31, 2017 and 2016	3
	Condensed Consolidated Statements of Cash Flows for the Three-Month Periods Ended March 31, 2017 and 2016	4
	Notes to Condensed Consolidated Financial Statements	5
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	33
ITEM 4.	Controls and Procedures	33
PART II OTHER INFORMATION
ITEM 1.	Legal Proceedings	34
ITEM 1A.	Risk Factors	34
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
ITEM 3.	Defaults Upon Senior Securities	34
ITEM 4.	Mine Safety Disclosures	34
ITEM 5.	Other Information	34
ITEM 6.	Exhibits	34
SIGNATURES		35

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)

	March 31, 2017			December 31, 2016
Assets	(Unaudited)
Current assets:
Cash and cash equivalents	$	7,808		$	11,012
Restricted cash	1,058			1,078
Accounts receivable, net	763			921
Prepaid expenses and other current assets	3,927			4,335
Total current assets	13,556			17,346
Property and equipment, net	27,252			26,415
Capitalized Development Projects costs	254,494			202,438
Cash for Development Projects	393,353			26,384
Intangible asset	51,000			51,000
Cash collateral for deposit bond	15,000			15,000
Other assets	584			1,175
Total assets	$	755,239		$	339,758
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,123		$	2,268
Accrued Development Projects costs	45,659			41,933
Accrued expenses and other current liabilities	8,507			7,347
Total current liabilities	57,289			51,548
Long-term loan (related party), net of debt issuance costs	32,735			—
Term B Loan, net of debt issuance costs	387,016			—
Other long-term liabilities	9,271			8,644
Total liabilities	486,311			60,192
Stockholders’ equity:
Preferred stock, 5,000 shares authorized; $0.01 par value
Series B, $29 per share liquidation value, 44 shares issued and outstanding	—			—
Common stock, $0.01 par value, 150,000 shares authorized, 31,177 and 31,156 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively	312			312
Additional paid-in capital	534,749			533,813
Accumulated other comprehensive loss	(91		)	—
Accumulated deficit	(266,042		)	(254,559		)
Total stockholders’ equity	268,928			279,566
Total liabilities and stockholders’ equity	$	755,239		$	339,758

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

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Amounts in thousands, except per share data) (Unaudited)

	Three Months Ended March 31,
	2017			2016
Revenues:
Gaming	$	12,893		$	14,522
Food, beverage, racing and other	2,228			2,751
Gross revenues	15,121			17,273
Less: Promotional allowances	(352		)	(1,068		)
Net revenues	14,769			16,205
Operating costs and expenses:
Gaming	9,860			10,801
Food, beverage, racing and other	2,368			2,597
Selling, general and administrative	3,689			3,597
Development Projects expenses	4,269			3,067
Stock-based compensation	603			571
Depreciation	336			336
Total operating costs and expenses	21,125			20,969
Loss from operations	(6,356		)	(4,764		)
Amortization of debt issuance costs	(1,274		)	(2		)
Interest expense	(4,275		)	(411		)
Interest income	454			—
Net loss	(11,451		)	(5,177		)
Dividends on preferred stock	(42		)	(42		)
Net loss applicable to common stockholders	$	(11,493	)	$	(5,219	)
Weighted average common shares outstanding:
Basic	31,003			20,125
Diluted	31,003			20,125
Loss per common share:
Basic	$	(0.37	)	$	(0.26	)
Diluted	$	(0.37	)	$	(0.26	)

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

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Amounts in thousands, except per share data) (Unaudited)

	Three Months Ended March 31,
	2017			2016
Net loss	(11,451		)	(5,177		)
Other comprehensive loss:
Unrealized loss on Interest Rate Cap	(91		)	—
Comprehensive loss	$	(11,542	)	$	(5,177	)

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

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amounts in thousands) (Unaudited)

	Three Months Ended March 31,
	2017			2016
Cash flows provided by (used in) operating activities:
Net loss	$	(11,451	)	$	(5,177	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	336			336
Amortization of debt issuance costs	1,274			2
Non-cash interest expense	727			231
Stock-based compensation	603			571
Changes in operating assets and liabilities:
Restricted cash—NYSGC Lottery and Purse Accounts	(17		)	424
Accounts receivable	158			188
Prepaid expenses and other current assets	408			(1,382		)
Other assets	—			(4		)
Accounts payable	855			912
Accrued expenses and other current liabilities	2,388			(8,289		)
Net cash used in operating activities	(4,719		)	(12,188		)
Cash flows provided by (used in) investing activities:
Purchase of property and equipment	(1,172		)	(28		)
Capitalized Development Projects costs	(48,329		)	(15,268		)
Cash collateral for deposit bond	—			(15,000		)
License fee payment for the casino project	—			(51,000		)
Net change in cash for Development Projects	(366,969		)	(155,222		)
Restricted cash—racing capital improvement	37			25
Other	5			—
Net cash used in investing activities	(416,428		)	(236,493		)
Cash flows provided by (used in) financing activities:
Proceeds from Term B Loan	415,000			—
Proceeds from long-term loan (related party)	32,000			—
Payment of debt issuance costs and Interest Rate Cap fees	(28,750		)	—
Proceeds from January 2016 Rights Offering, net of expenses	—			286,032
Series B Preferred Stock dividend payment	(32		)	(167		)
Series E Preferred Stock and dividend redemption	—			(30,711		)
Other payments	(275		)	—
Net cash provided by financing activities	417,943			255,154
Net (decrease) / increase in cash and cash equivalents	(3,204		)	6,473
Cash and cash equivalents, beginning of period	11,012			6,412
Cash and cash equivalents, end of period	$	7,808		$	12,885
Supplemental disclosures of cash flow information:
Cash paid for interest	$	—		$	231
Non-cash investing and financing activities:
Accrued Development Projects costs	$	45,659		$	25,925

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

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EMPIRE RESORTS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Note A. Organization and Nature of Business

Basis for Presentation

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

The condensed consolidated financial statements and notes as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and March 31, 2016 include the accounts of Empire and its subsidiaries. All intercompany balances and transactions are eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared under the rules and regulations of the Securities and Exchange Commission ("SEC") applicable for interim periods, and therefore do not include all information necessary for complete financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Our financial statements require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent liabilities. Actual amounts could differ from those estimates. These condensed consolidated financial statements reflect all adjustments (consisting primarily of normal recurring accruals) which are, in the Company’s opinion, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for our interim periods may not be necessarily indicative of the results of operations that may by achieved for the entire year.

Liquidity and Capital Resources

The accompanying condensed 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, as well as the net proceeds of the Term Loan Facility, the Kien Huat Montreign Loan (each as defined below) and the $35 million required to be deposited into the lender-controlled account created under the Term Loan Facility, which are discussed below, will be sufficient to meet working capital requirements and the expected costs of the Development Projects (defined below) for at least the next 12 months. Additionally, following the opening of the casino project (the "Casino Project") to the public, which is expected to occur in March 2018, the Revolving Credit Facility (defined below) will be available for use towards the working capital needs, capital expenditures and for other general corporate purposes of the Project Parties (defined below), subject to our ability to meet the conditions therein. Whether these resources are adequate to meet the Company’s liquidity needs beyond that period, including with respect to the costs of the entertainment village project (the "Entertainment Village Project") and the golf course project (the "Golf Course Project" and, together with the Casino Project and Entertainment Village Project, the "Development Projects") , will depend on the Company’s growth and operating results and the final designs and progress of the Development Projects. In addition, cost overruns, delays in the construction schedule or changes in design are among the factors that may increase the projected costs of the Development Projects, which may also require us to raise additional capital. Pursuant to the Term Loan Facility, Montreign Operating is required to deposit $35 million into the lender-controlled account holding the net proceeds of the Term Loan Facility and the Kien Huat Montreign Loan, which amount will be used towards the Entertainment Village Project. Of this payment, $15 million is required to be deposited by June 30, 2017, and the remaining $20 million is required to be deposited by December 31, 2017. The $35 million must be funded in the form of a further equity contribution to Montreign Operating, for which the Company expects to raise additional debt or equity capital by the dates on which the deposits must be made. Additionally, the Company expects to raise furniture, fixtures and equipment ("FF&E") financing of up to $40 million to complete the Development Projects. To raise additional capital necessary for the Development Projects, to meet obligations under the Term Loan Facility or for the general corporate purposes of the Company, we may seek to enter into strategic agreements, joint ventures or similar agreements or we may sell additional debt or equity in public or private transactions, including pursuant to the commitment of Kien Huat to backstop a rights offering of Empire in the amount of $35 million. The sale of additional equity could result in additional dilution to the Company’s existing stockholders, and financing arrangements may not be available to us, or may not be available in necessary amounts or on acceptable terms.

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As of March 31, 2017, we had total current assets of approximately $13.6 million and total current liabilities of approximately $57.3 million, which includes approximately $45.7 million in accrued Development Projects costs. As of March 31, 2017, our total assets included approximately $393.4 million of remaining net proceeds from the Term Loan Facility (as defined and discussed below), which will be used to pay the accrued Development Projects costs included in our current liabilities. The net proceeds from the Term Loan Facility, which are being used to pay the costs of the Development Projects, are presented on the Condensed Consolidated Balance Sheet as Cash for Development Projects.

We have had continuing net losses and negative cash flow from operating activities, including a loss from operations of $6.4 million for the three months ended March 31, 2017. The net loss for the three months ended March 31, 2017 was primarily related to the Development Projects expenses in the amount of $4.3 million that could not be capitalized. Additionally, $52.1 million of the costs incurred for the Development Projects were capitalized for the three months ended March 31, 2017.    

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 video gaming machines ("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 related expenses such as the New York State Gaming Commission's ("NYSGC") share of VGM revenue and the Monticello Harness Horsemen’s Association (the “MHHA”) and the Agriculture and New York State Horse Breeding Development Fund’s contractually required shares of revenue.

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. Some elements of the racing revenues from Off-Track Betting Corporations (“OTBs”) 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, beverage 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 months ended March 31, 2017 and 2016 are as follows:

	Three Months Ended
	March 31, 2017		March 31, 2016
	(in thousands)
Food and beverage	$	165	$	360
Non-subsidized free play	124		589
Players club awards	63		119
Total retail value of promotional allowances	$	352	$	1,068

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The estimated cost of providing complimentary food, beverage and other items for the three months ended March 31, 2017 and 2016 are as follows:

	Three Months Ended
	March 31, 2017		March 31, 2016
	(in thousands)
Food and beverage	$	232	$	530
Non-subsidized free play	73		347
Players club awards	63		119
Total cost of promotional allowances	$	368	$	996

Accounts receivable

Accounts receivable, net of allowances, are stated at the amount the Company expects to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectability of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and the Company’s judgment of collectability. 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. The Company recorded an allowance for doubtful accounts of approximately $171,000 as of March 31, 2017 and December 31, 2016.

Other long-term liabilities

The difference between our cash payments and straight-line rent on our leases of $8.5 million and $8.0 million at March 31, 2017 and December 31, 2016, respectively, is included in other long-term liabilities.

Common stock - loss per share

The Company computes basic loss per share by dividing net loss applicable to holders of common stock by the weighted-average common stock outstanding for the period. Diluted loss per share reflects the potential dilution of earnings that could occur if securities or contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three-month periods ended March 31, 2017 and 2016 were the same.

The following table shows the approximate number of common stock equivalents outstanding at March 31, 2017 and 2016 that could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share for the three months ended March 31, 2017 and 2016, because their inclusion would have been anti-dilutive:

	Outstanding at
	March 31, 2017	March 31, 2016
Options	31,000	52,000
Warrants	133,000	133,000
Option Matching Rights	18,000	22,000
Unvested Restricted stock	180,000	199,000
Total	362,000	406,000

Interest Rate Cap Agreement

In February 2017, the Company entered into an interest rate cap agreement with Credit Suisse AG, International, pursuant to which the Company has effectively limited its exposure to increases in interest rates on its Term B Loan balance from May 1, 2017 through February 28, 2018 and then for a portion of its Term B Loan balance through July 31, 2019 (the "Interest Rate Cap"). The Company paid $675,000 for the Interest Rate Cap. The cost of the Interest Rate Cap will be amortized over its term as interest expense. The fair value of the Interest Rate Cap was $584,000 at March 31, 2017 and is presented at fair value as

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other assets on the Condensed Consolidated Balance Sheet. The difference between the fair value and amortized cost is recorded as an adjustment to accumulated other comprehensive loss.

Accumulated Other Comprehensive Loss

As of March 31, 2017, accumulated other comprehensive loss of $91,000 consisted solely of the fair value adjustment relating to the Interest Rate Cap.

Fair value

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

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

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

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

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

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

The Company used a third party to complete the valuation of its Interest Rate Cap, which is considered a Level 2 asset and is measured at fair value on a recurring basis using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows for the Interest Rate Cap.

At March 31, 2017, the estimated fair value of the Company's Term B Loan (as defined below) outstanding was approximately $414.4 million and the carrying value was approximately $415.0 million. The fair value of the Kien Huat Montreign Loan (as defined below) has not been estimated due to its related party nature and lack of comparable market information.

Stock-based compensation

The cost of all stock-based awards to employees, officers, directors and consultants, including grants of employee stock options and restricted stock, is recognized in the financial statements based on the fair value of the awards at grant date. The fair value of stock option awards would be determined using the Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the market price of Empire’s common stock on the date of grant. The fair value of stock-based awards is recognized as stock-based compensation expense on a straight-line basis over the requisite service period from the date of grant. As of March 31, 2017, there was approximately $1.9 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Company’s equity compensation plan. That cost is expected to be recognized over a period of 2.75 years. This expected cost does not include the impact of any future stock-based compensation awards.

8

Income taxes

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

Intangible Assets

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

On December 21, 2015, the Company was granted a gaming license (the "Gaming Facility License"), for which it paid $51 million on March 30, 2016. The term of the Gaming Facility License is 10 years from the effective date, which was March 1, 2016. Amortization will not commence until the completion of construction and the opening to the general public of the Casino Project. Amortization will be recognized on a straight-line basis beginning at that time and continuing until the license is up for renewal in 2026. During the period that the Company is not amortizing the intangible asset, the Company will assess it for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Recent Accounting Pronouncements

In May 2014, the FASB issued new revenue recognition guidance, which will supersede nearly all existing revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve the core principle, the new guidance implements a five-step process for customer contract revenue recognition. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Entities can transition to the new guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption.

The Company currently anticipates adopting this accounting standard during the first quarter of 2018, with a cumulative-effect adjustment as of the date of adoption. Although we are still evaluating the full impact of this standard on our consolidated financial statements, the Company has concluded that the adoption of this standard will affect how we account for our customer loyalty program(s) as well as the classification of revenues between gaming, food and beverage, lodging, retail, entertainment and other. Under our current customer loyalty program, customers earn points based on their level of play, which may be redeemed for various benefits, such as cash back or dining, among others. We currently determine our liability for unredeemed points based on the estimated costs of services or merchandise to be provided and estimated redemption rates. Under the new standard, points awarded under our customer loyalty program are considered a material right given to the players based on their gaming play and the promise to provide points to players will need to be accounted for as a separate performance obligation. The new standard will require us to allocate the revenues associated with the players’ activity between gaming revenue and the value of the points and to measure the liability based on the estimated standalone value of the points earned after factoring in the likelihood of redemption. As a result, we expect that gaming revenues will be reduced with a corresponding increase, in total, of food and beverage, lodging, retail, entertainment and other revenues. The revenue associated with the points earned will be recognized in the period in which they are redeemed. The quantitative effects of these changes have not yet been determined and are still being analyzed.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"), which provides guidance for accounting for leases. Under ASU 2016-02, the Company will be required to recognize the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard must be adopted using a modified retrospective approach and provides for certain practical expedients. Early adoption is permitted. The Company has not yet completed its assessment of the impact of the new standard on the Company's consolidated financial statements. The Company currently anticipates adopting this standard during 2019.

In March 2016, FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which provides guidance for accounting for stock-based compensation for employees. Under ASU 2016-09, several aspects of the accounting for share-based payment award transactions are simplified,

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including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company adopted this standard during the first quarter of 2017 and there was no material impact from the implementation this guidance.

Note C. Prepaid Expenses and Other Assets

Our wholly-owned subsidiary, Monticello Raceway Management, Inc. ("MRMI"), has participated in the New York State Empire Zones real estate tax credit program for over 10 years. Under this program, the Company receives a refund for real estate taxes paid during the year, after the end of New York State's fiscal year. Beginning in 2014, the amount of the tax credit received is reduced by 20% each year until the tax credit ends for the Company at December 31, 2017. For the year ended December 31, 2017, the Company will receive a 20% refund for real estate taxes paid. The amounts of the expected real estate tax credits are included in prepaid expenses and other current assets on the accompanying Condensed Consolidated Balance Sheet at March 31, 2017 and December 31, 2016, and were approximately $609,000 and $1.3 million, respectively.

Prepaid expenses and other current assets, as presented on the Condensed Consolidated Balance Sheet, are comprised of the following at March 31, 2017 and December 31, 2016:

	March 31, 2017		December 31, 2016
	(in thousands)
Empire Zones real estate tax credit	$	609	$	1,325
Prepaid real estate taxes	981		558
Prepaid insurance	608		919
Inventory	175		177
Prepaid gaming expenses	214		61
Development escrow and security refundable deposit	627		623
Prepaid other	713		672
Total prepaid expenses and other current assets	$	3,927	$	4,335

Note D. Property and Equipment

Property and Equipment

Property and equipment consists of the following:

	March 31, 2017			December 31, 2016
	(in thousands)
Land	$	770		$	770
Land improvements	1,759			1,758
Buildings	4,727			4,727
Building improvements	28,116			28,088
Vehicles	319			307
Furniture, fixtures and equipment	4,374			4,278
Construction in Progress	1,954			919
	42,019			40,847
Less—Accumulated depreciation	(14,767		)	(14,432		)
	$	27,252		$	26,415

Depreciation expense was approximately $336,000 for each of the three-month periods ended March 31, 2017 and 2016, respectively.

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The VGMs in the Company’s facility are owned by the NYSGC and, accordingly, the Company's consolidated financial statements include neither the cost nor the depreciation of those devices.

Note E. Development Projects Costs, Cash Collateral for Deposit Bond and Cash for Development Projects

Development Projects Costs

At March 31, 2017 and December 31, 2016, total capitalized Development Projects costs were approximately $254.5 million and $202.4 million, respectively. Total capitalized Development Projects costs consist of construction costs, site development, contractor insurance, general conditions, construction manager fees, and professional fees such as architectural, legal and accounting fees, and is reflected on the Condensed Consolidated Balance Sheet as capitalized Development Projects costs. Interest expense totaling $3.7 million was capitalized during the three-month period ended March 31, 2017.

During the three-month period ended March 31, 2017, total Development Projects costs incurred were approximately $56.3 million, of which $52.0 million was capitalized and $4.3 million was expensed. Development Projects expenses consisted of $2.6 million of land lease costs, $652,000 of salary and related benefits, $353,000 of bank charges, $158,000 of real estate taxes, $143,000 of insurance expenses, $93,000 of marketing expenses, $35,000 of consulting and professional service fees, and an additional $218,000 of pre-opening expenses.

During the three-month period ended March 31, 2016, total Development Projects costs incurred were approximately $44.3 million, of which $41.2 million was capitalized and $3.1 million was expensed. Development Projects expenses consisted of $2.6 million of land lease costs, $194,000 of consulting and professional service fees, $97,000 of real estate taxes, $106,000 of insurance expenses, and an additional $113,000 of pre-opening expenses.

Cash Collateral for Deposit Bond

In February 2016, the Company deposited $15 million in performance bonds to guarantee the completion of the Development Projects. These funds will be returned to the Company upon the satisfactory completion of the Development Projects.

Cash for Development Projects

At March 31, 2017, the $393.4 million of Cash for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At December 31, 2016, the $26.4 million of Cash for Development Projects on the Condensed Consolidated Balance Sheet represented the remaining funds from the January 2016 Rights Offering (defined below) to be utilized for the Development Projects.

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Note F. Accrued Development Projects Costs, Accrued Expenses and Other Current Liabilities

Accrued Development Projects costs at March 31, 2017 and December 31, 2016 were $45.7 million and $41.9 million, respectively, and were primarily comprised of amounts due to the Casino Project's construction manager, as well as amounts due to the architect and other vendors for costs incurred for the Development Projects.

Accrued expenses and other current liabilities, as presented on the Condensed Consolidated Balance Sheet, are comprised of the following:

	March 31, 2017		December 31, 2016
	(in thousands)
Liability for horse racing purses	$	1,244	$	1,139
Accrued payroll	1,058		1,897
Accrued interest payable	3,536		—
Accrued redeemable points	172		167
Liability to NYSGC	142		360
Liability for local progressive jackpot	947		907
Accrued settlement liability	—		758
Accrued professional fees	365		308
Federal tax withholding payable	115		78
Accrued other	928		1,733
Total accrued expenses and other current liabilities	$	8,507	$	7,347

Note G. Term Loan Agreement and Revolving Credit Agreement

Term Loan Agreement

On January 24, 2017 (the "Loan Closing Date"), Montreign Operating entered into a Building Term Loan Agreement (the “Term Loan Agreement”) with Montreign Operating, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as administrative agent. The Term Loan Agreement provides for loans to be made to Montreign Operating in an aggregate principal amount of $485 million (the “Term Loan Facility”).

The Term Loan Facility consists of $70 million of Term A loans ( the “Term A Loan”) and $415 million of Term B loans (the “Term B Loan”). The Term B Loan was borrowed in full on the Loan Closing Date and the proceeds were used to pay fees and expenses related to the financing and fund various lender-controlled accounts. The proceeds of the Term Loan Facility (including proceeds of the Term A Loan, which will be deposited into the lender-controlled accounts upon borrowing) will be made available to Montreign Operating, subject to Montreign Operating satisfying the disbursement conditions set forth in the Term Loan Agreement and related loan documents, to pay debt service and costs relating to the development and construction of the Development Projects.

The Term A Loan may be borrowed during the period from the Loan Closing Date to July 24, 2018, subject to meeting the conditions set forth in the Term Loan Agreement at the time of the borrowing. The Term A Loan will mature on January 24, 2022 and the Term B Loan will mature on January 24, 2023. Interest will accrue on outstanding borrowings under the Term A Loan at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. Interest will accrue on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a LIBOR floor of 1%) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. In addition, Montreign Operating will pay a commitment fee to each Term A Loan lender (“Term A Lender”) equal to the undrawn amount of such Term A Lender’s Term A Loan commitment multiplied by a rate equal to 2.5% per annum for the period commencing on the Loan Closing Date through March 24, 2018 and 5.0% per annum thereafter.

As of March 31, 2017, $415 million was outstanding under the Term B Loan and there were no borrowings outstanding under the Term A Loan. No principal repayments are due prior to the projected Casino Project opening date (which is expected to be March 1, 2018). Thereafter, principal payments are due at the end of each calendar quarter. The first loan repayment is due June 30, 2018. The following table lists the annual principal repayments due under the Term B Loan agreement:

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	(in thousands)
2017	$0
2018	3,113
2019	4,150
2020	4,150
2021	4,150
2022 to 2023	399,437

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

Revolving Credit Agreement

On the Loan Closing Date, Montreign Operating also entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”) with Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent. The Revolving Credit Agreement provides for loans or other extensions of credit to be made to Montreign Operating in an aggregate principal amount of up to $15 million (including a letter of credit sub-facility of $10 million) (the “Revolving Credit Facility”), the proceeds of which may be used for working capital needs, capital expenditures and other general corporate purposes following the opening of the Casino Project to the public. The Revolving Credit Facility will mature on January 24, 2022. Interest will accrue on outstanding borrowings at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum.

Collateral and Other Provisions

The Term Loan Facility and the Revolving Credit Facility are each guaranteed by Empire Resorts Real Estate I, LLC ("ERREI") and Empire Resorts Real Estate II, LLC ("ERREII" and together with ERREI, the "Montreign Subsidiaries"), both indirect, wholly-owned subsidiaries of Montreign Operating, and are secured by security interests in substantially all the real and personal property of Montreign Operating and the Montreign Subsidiaries and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding Company, LLC ("Montreign Holding"), a wholly-owned subsidiary of Empire. In addition, Empire delivered a completion guaranty in connection with the Term Loan Facility guaranteeing the completion of the construction of the Casino Project and the Entertainment Village Project. Empire’s liability under the completion guaranty (excluding lender’s enforcement costs) is capped at $30 million.

The Term Loan Facility and the Revolving Credit Agreement contain representations and warranties, affirmative covenants, negative covenants and financial covenants that are usual and customary, including representations, warranties and covenants that, among other things, restrict the ability of Montreign Operating and the Montreign Subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, or make dividends or other distributions. Additionally, Montreign Operating is required to deposit $35 million into the lender-controlled account holding the net proceeds of the Term Loan Facility and the Kien Huat Montreign Loan, which amount will be used towards the Entertainment Village Project. Of the $35 million, $15 million is required to be deposited by June 30, 2017 and the remaining $20 million is required to be deposited by December 31, 2017. The Company must fund the $35 million in the form of a further equity contribution to Montreign Operating. The Company expects to raise additional debt or equity capital by the dates on which the deposits must be made.

Obligations under the Term Loan Agreement and the Revolving Credit Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including, among others: nonpayment of principal, interest or fees; breach of the affirmative or negative covenants; revocation of a gaming license for seven consecutive business days; and a change of control (as such term is defined in the Term Loan Agreement) of Montreign Operating.

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Note H. Long-Term Loans (Related Party)

Conversion of Kien Huat Note

On November 17, 2010, Empire entered into a loan agreement (the "2010 Kien Huat Loan Agreement") with Kien Huat Realty III Limited ("Kien Huat") pursuant to which Empire issued a convertible promissory note (the "2010 Kien Huat Note") in the original principal amount of $35.0 million, of which $17.4 million was outstanding as of December 31, 2015. On February 17, 2016, upon consummation of the January 2016 Rights Offering (defined below), the 2010 Kien Huat Note was converted into 1,332,058 shares of common stock (the "Note Conversion") in accordance with the terms of the 2010 Kien Huat Loan Agreement.

Kien Huat Construction Loan Agreement

On October 13, 2016, Montreign Operating and Kien Huat entered into a loan agreement (the "KH Construction Loan Agreement") pursuant to which Kien Huat agreed to make available to Montreign Operating up to an aggregate of $50 million of loans to pay the expenses of the Casino Project while the debt financing for the Development Projects was being finalized. The term of the KH Construction Loan Agreement would expire on the earlier of (i) the consummation of financing in an amount no less than the remaining contract amount under the Casino Project construction contract and (ii) October 13, 2017. In connection with the closing of the Term Loan Facility and the Kien Huat Montreign Loan, on January 24, 2017, the KH Construction Loan Agreement expired pursuant to its terms without being utilized by Montreign Operating. Montreign Operating paid Kien Huat a commitment fee of $500,000 upon execution of the KH Construction Loan. The commitment fee was capitalized and was included in other assets at December 31, 2016. It was written off on January 24, 2017 upon the issuance of the Kien Huat Montreign Loan Agreement (defined and described below).     

Kien Huat Montreign Loan Agreement

On the Loan Closing Date, Kien Huat and Montreign Holding entered into a loan agreement (the "Kien Huat Montreign Loan Agreement"), pursuant to which Montreign Holding obtained from Kien Huat a loan in the principal amount of $32.3 million (the "Kien Huat Montreign Loan"), the net proceeds of which were used as a capital contribution to Montreign Operating for use towards the expenses of the Development Projects. The Kien Huat Montreign Loan will mature on February 24, 2024 (the “Kien Huat Loan Maturity Date”), which date may be extended by Kien Huat in its sole discretion by up to an additional year.

The Kien Huat Montreign Loan bears interest at a rate of 12% per annum. Prior to the Kien Huat Loan Maturity Date, interest on the Kien Huat Montreign Loan shall accrue and be added to the outstanding principal of the Kien Huat Montreign Loan (the “Principal Indebtedness”) on the first business day of each calendar month beginning on February 1, 2017 (each an “Interest Payment Date”) and shall thereafter be deemed to be part of the Principal Indebtedness. The Principal Indebtedness, including all interest due through the applicable Interest Payment Date and other amounts due under the Kien Huat Montreign Loan, shall be payable in cash on the Kien Huat Loan Maturity Date. Notwithstanding the foregoing, Montreign Holding shall be required to pay in cash to Kien Huat, at the end of any “accrual period” (as defined in Section 1275(a)(5) of the Internal Revenue Code of 1986, as amended (the “Code”)) ending after the fifth anniversary of the Loan Closing Date, the aggregate amount by which (x) the sum of (i) the amount of accrued interest on the Kien Huat Montreign Loan that has been added to the Principal Indebtedness plus (ii) any other accrued but unpaid original issue discount (as determined under Section 163(i) of the Code) on the Kien Huat Montreign Loan from the closing date through the end of such accrual period, in each case that has not been paid in cash, exceeds (y) the product of (i) the “issue price” (as defined for purposes of the Code) and (ii) the “yield to maturity” (as defined for purposes of the Code). In addition to the interest payable on the Kien Huat Montreign Loan, Kien Huat was entitled to a commitment fee of 1%, which fee was added to the Principal Indebtedness of the Kien Huat Montreign Loan.

Until the Kien Huat Montreign Loan is repaid in full, Montreign Holding shall make no dividend or other distributions to Empire except for purposes of (i) paying bona fide corporate overhead expenses in an amount not to exceed $9 million (which amount is subject to further reduction pursuant to the Kien Huat Montreign Loan Agreement) and (ii) the payment of taxes by Empire, to the extent also permitted by the Term Loan Agreement with respect to distributions to Montreign Operating. The Kien Huat Montreign Loan may be prepaid in full or in part at any time without premium or penalty.

The obligations of Montreign Holding under the Kien Huat Montreign Loan Agreement are secured by a pledge of all the membership interests of Montreign Holding by Empire. The Kien Huat Montreign Loan Agreement contains representations and warranties and affirmative covenants that are usual and customary, including representations, warranties and covenants that, among other things, restrict Montreign Holding’s use of the proceeds of the Kien Huat Montreign Loan to expenses relating to the Development Projects. Obligations under the Kien Huat Montreign Loan Agreement may be accelerated upon certain customary

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events of default (subject to grace periods, as appropriate), including, among others, nonpayment of principal, interest or fees, breach of the affirmative covenants and a default with respect to the payment of principal or interest under the Term Loan Facility by Montreign Operating or acceleration of the Term Loan Facility for any reason.

Note I. Bryanston Settlement Agreement

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

On March 7, 2016, the Company redeemed the outstanding Series E Preferred Stock held by the Bryanston Parties for approximately $30.7 million pursuant to the terms of the Bryanston Settlement Agreement. Because the event that caused the entire liability to become due occurred during 2016, the liability was recorded pursuant to the payment terms in place at December 31, 2015, of which $1.5 million was recorded as a current liability and the remainder was recorded as a long-term liability on the December 31, 2015 balance sheet. Interest expense associated with the change in the redemption amount of the liability was $231,000 for the three months ended March 31, 2016.

Note J. Stockholders’ Equity

Authorized Capital

On November 1, 2016, Empire filed the Second Amended and Restated Certificate of Incorporation (the "Restated Charter”) with the Secretary of State of the State of Delaware. Pursuant to the Restated Charter, Empire’s authorized capital stock consists of 155 million shares, of which 150 million shares are common stock, par value $0.01 per share, and five million shares are preferred stock, par value $0.01 per share.

Common Stock

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

January 2016 Rights Offering

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

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

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Pursuant to the January 2016 Standby Purchase Agreement, we paid Kien Huat a commitment fee of $1,450,000, which is equal to 0.5% of the maximum amount of the January 2016 Rights Offering, and reimbursed Kien Huat for expenses in the amount of $50,000.

Preferred Stock and Dividends

The Company’s Series B Preferred Stock has voting rights of 0.054 votes per share and each share is convertible into 0.054 shares of its common stock. It has a liquidation value of $29 per share and is entitled to annual cumulative dividends of $2.90 per share payable quarterly in cash. The Company has the right to pay dividends on an annual basis by issuing shares of its common stock at the rate of $3.77 per share. The value of shares of common stock issued as payment is based upon the average closing price for the shares of common stock for the 20 trading days preceding January 30 of the year following that for which the dividends are due. At March 31, 2017 and December 31, 2016, there were 44,258 shares of Series B Preferred Stock outstanding.

The Board authorized the cash payment of the Series B Preferred Stock on March 8, 2016. Quarterly dividend payments in the amount of $32,087 were made on April 1, 2016, July 1, 2016, October 3, 2016 and January 3, 2017. On April 3, 2017, a payment of $32,087 was made for the first quarter of 2017.

On March 2, 2016, the Board authorized the cash payment of dividends due for the year ended December 31, 2015 on the Series B Preferred Stock in the amount of approximately $167,000. At December 31, 2015, the Company had undeclared cash dividends on the Series B Preferred Stock of approximately $167,000 and payment was made the same day. The cash dividend was calculated as if it were a dividend issued in shares of common stock, which in accordance with the terms of the Series B Preferred Stock, means the amount of the cash payment is the annual cash dividend value (if it had been paid quarterly) multiplied by 1.3.

Note K. Concentration

As of March 31, 2017, the Company had one debtor, Woodbine Entertainment Group, which represented 10.8% of the total net outstanding racing-related accounts receivable. As of December 31, 2016, the Company had one debtor, Hawthorne OTB, which represented 16.9% of the total net outstanding racing-related accounts receivable.

Note L. Commitments and Contingencies

Legal Proceedings

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

Contingent Liability Settlement

On January 4, 2017, the Company entered into an agreement (the “2017 Settlement Agreement”) to issue 33,333 registered shares (the "Settlement Shares") of its common stock to an individual as part of the settlement of a claim asserted in connection with such individual's alleged provision of certain services to the Company. Pursuant to the 2017 Settlement Agreement, the Company issued the Settlement Shares on January 9, 2017. The 2017 Settlement Agreement provided for a mutual full release of all potential claims upon the Company's delivery of such Settlement Shares to the individual. The amount of the liability of $758,000 was included in accrued expenses at December 31, 2016.

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Operating leases

The following table represents the minimum future lease payments under the Company's operating leases at March 31, 2017:

Payments due by Period
Year ending December 31,	Total Lease Payments
	(in thousands)
2017	$	9,000
2018	10,550
2019	7,775
2020	7,800
2021	8,300
2022 to 2056	370,274
Total	$	413,699

The details of lease commitments are described below.

Casino Lease

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

The following table represents the future fixed rent payments under the Casino Lease at March 31, 2017:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1) (2)	$9,000
2018 (2) (3)	10,500
2019 (3)	7,500
2020 (3)	7,500
2021 (3)	8,000
2022 to 2056 (3)	354,624

(1) Until February 29, 2016, the Company continued to make payments of $500,000 per month it would have made under the Original Option Agreement (defined below). From March 1, 2016 until February 28, 2017, option payments made by the Company under a certain option agreement, originally executed on December 21, 2011 and last amended on June 20, 2014, which totaled $8.5 million, were applied against fixed rent due by the Company under the Casino Lease for such period.

(2) From March 1, 2017 through August 31, 2018, fixed rent is $1.0 million per month.

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

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

Golf Course Lease

On December 28, 2015, ERREI entered into a sublease (the “Golf Course Lease”) with the Adelaar Developer, LLC (the "Destination Resort Developer") for the lease of the parcel on which the golf course is located (the "Golf Course Parcel"). The terms of the Golf Course Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Golf Course Lease, there is no percentage rent due. Fixed rent payments under the Golf Course Lease are represented in the table below:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1)(2)	$0
2018 (2)	0
2019 (2)	125
2020 (2)	150
2021 (2)	150
2022 to 2056 (2) (3)	7,825

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

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

year.

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

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

Entertainment Village Lease

On December 28, 2015, Empire Resorts Real Estate II, LLC ("ERREII"), an indirect, wholly-owned subsidiary of Montreign Operating, entered into a sublease (the “Entertainment Village Lease”) with the Destination Resort Developer, for the lease of the parcel of land on which the Entertainment Village would be built (the "Entertainment Village Parcel" and, together with the Casino Parcel and Golf Course Parcel, the "Project Parcels"). The terms of the Entertainment Village Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Entertainment Village Lease, there is no percentage rent due. Fixed rent payments under the Entertainment Village Lease are represented in the table below:

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Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1)(2)	$0
2018 (2)	50
2019 (2)	150
2020 (2)	150
2021 (2)	150
2022 to 2056 (2) (3)	7,825

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

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

(3) From September 2028 through the remainder of the term of the Entertainment Village Lease, fixed rent will equal $250,000 per year.

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

Purchase Option Agreement

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

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

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

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Note M. Related Party Transactions

Moelis Agreements

On December 9, 2013, the Company executed a letter agreement, as supplemented by a letter dated May 20, 2015, (together, the "Moelis Letter Agreement") pursuant to which it engaged Moelis & Company LLC ("Moelis") to act as its financial advisor in connection with the Casino Project. In the event a financing is consummated, the Moelis Letter Agreement contemplates additional transaction-based fees would be earned by Moelis.

At the close of the January 2016 Rights Offering, Moelis was paid approximately $2.1 million for financial advisory services in connection with the Casino Project pursuant to the Moelis Letter Agreement.

On January 24, 2017, in connection with the closing of the Term Loan Facility and the Revolving Credit Facility, Moelis was paid approximately $2.5 million for financial advisory services pursuant to the Moelis Letter Agreement.

In March 7, 2017, Montreign Operating entered into an engagement agreement with Moelis (the "Moelis-Montreign Engagement Agreement") pursuant to which Moelis will act as exclusive financial advisor to Montreign Operating. Pursuant to the Moelis-Montreign Engagement Agreement, Moelis is entitled to an advisory fee of $100,000, which was paid upon execution, and reimbursement of expenses up to $75,000. The Moelis-Montreign Engagement Agreement will automatically terminate on December 31, 2017, unless either party terminates earlier.

Gregg Polle, a director of the Company, is a Managing Director of Moelis. Mr. Polle recused himself from participating in the discussion of the Moelis Letter Agreement, the Moelis-Montreign Engagement Agreement and the determination of whether to enter into such agreements.

RWS License Agreement

On March 31, 2017, Montreign Operating entered into a license agreement (the “RWS License Agreement”) with RW Services Pte Ltd (“RWS”). Pursuant to the RWS License Agreement, RWS granted Montreign Operating the non-exclusive, non-transferable, revocable and limited right to use certain “Genting” and “Resorts World” trademarks (the “RWS Licensed Marks”) in connection with the development, marketing, sales, management and operation (the “Permitted Uses”) of the Development Projects. The right to use the RWS Licensed Marks may be assigned or sublicensed only in certain limited circumstances. However, any use of the RWS Licensed Marks for a purpose other than the Permitted Uses will require the prior written consent of RWS. The Company expects the name of the Casino Project (the “Casino Name”) to be “Resorts World” used in combination with additional words as mutually agreed upon by Montreign Operating and RWS. The right to use the Casino Name is exclusive to Montreign Operating. Montreign Operating will have the right to use the Casino Name in connection with on-line gaming.

The initial term of the RWS License Agreement will expire on December 31, 2027, and shall be extended automatically for additional terms of 12 months each, up to a maximum of 39 additional terms, unless either of the parties provides notice to terminate the RWS License Agreement or upon the mutual written consent of both parties. Montreign Operating’s rights and obligations under the RWS License Agreement are subject to and governed by the rules and regulations applicable to Montreign Operating’s gaming operations at the Casino Project, and the fiduciary obligations of the boards of directors of Montreign Operating and Empire, as well as the fiduciary obligations of Kien Huat. Beginning on the date on which the Casino Project opens to the public, Montreign Operating will pay to RWS a fee equivalent to a percentage of Net Revenue (as such term is defined in the RWS License Agreement) generated in each calendar year from (i) all activity at the Casino Project, (ii) each specific use of the RWS Licensed Marks in the Entertainment Village or Golf Course and (iii) each specific use of the Casino Name in connection with on-line gaming. The percentage of Net Revenue payable as the fee is a low single digit percentage that will increase incrementally between the third year and sixth year of the term of the RWS License Agreement and will remain a low single digit percentage during the entire term of the RWS License Agreement.

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

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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, 2016.

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, 2016, which could cause actual results to differ materially from those contained in any forward-looking statement. Many of these factors are beyond our ability to control or predict.

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

Overview

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

The Destination Resort and Development Projects

On December 21, 2015, Montreign Operating was awarded a Gaming License by the NYSGC to operate the Casino Project to be located at the site of a four-season destination resort being developed in the Town of Thompson in Sullivan County, approximately 90 miles from New York City (the "Destination Resort"), which is described below. Montreign Operating is the sole holder of a Gaming Facility License in the Hudson Valley-Catskill region, which consists of Columbia, Delaware, Dutchess, Greene, Orange, Sullivan and Ulster counties in New York State. The Gaming Facility License became effective on March 1, 2016.

The Destination Resort is to be located on approximately 1,700 acres owned by EPT Concord II, LLC ("EPT") and EPR Concord II, L.P. ("EPR LP"), two wholly-owned subsidiaries of EPR Properties, which are unrelated to the Company. The resort casino project (the "Casino Project") is part of the initial development of the Destination Resort, which will also include an indoor waterpark lodge (the "Waterpark"), a Rees Jones-redesigned "Monster" golf course (the "Golf Course Project") and an entertainment village, which will include hotel, retail, restaurants and other amenities (the "Entertainment Village Project" and, together with the Casino Project and the Golf Course Project, the "Development Projects"). In addition to the Casino Project, subsidiaries of Montreign Operating are responsible for developing the Entertainment Village Project and the Golf Course Project. Subsidiaries of EPR Properties are responsible for developing the Waterpark.

Monticello Casino and Raceway

Through 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, approximately 90 miles northwest of New York City. Monticello Casino and Raceway operates 1,110 VGMs, which includes 1,070 video lottery terminals ("VLTs") and 40 electronic table game positions ("ETGs"). VGMs are similar to slot machines, but they are connected to a central system and report financial information to the central system. ETGs include the games of roulette, blackjack and 3-card poker. 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 our races to offsite pari-mutuel wagering facilities.

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In a letter dated December 23, 2016, the NYSGC approved MRMI's racetrack and simulcast license renewal applications for calendar year 2017. Generally, the annual license renewal process requires the NYSGC to review the financial responsibility, experience, character and general fitness of MRMI and its management.

The Destination Resort and the Development Projects

The Destination Resort is located on approximately 1,700 acres (the "EPT Property") in the Town of Thompson in Sullivan County, New York. The Casino Project is part of the initial phase of the Destination Resort, which will also include the Waterpark, the Golf Course Project and the Entertainment Village Project (the Casino Project, the Waterpark, the Golf Course Project and the Entertainment Village Project, collectively the “Initial Projects”). The Company currently expects the construction of the Development Projects will cost approximately $909 million, which includes $744 million of currently expected costs for the Development Projects, $72 million for contingency and interest reserves, $51 million for the Gaming Facility License fee and $42 million of original issue discount and financing and legal fees.

The Casino Project

The Casino Project is designed to meet five-star and five-diamond standards and is expected to include:

• a 90,500-square foot main casino floor featuring 2,150 slot machines and 100 table games, which will include Asian-themed games;

• a 6,500-square foot poker room featuring 16 - 18 tables;

• a designated 3,800-square foot VIP/high-limit area located on the main gaming floor, which will offer slot machines, table games, and a player’s lounge offering food and beverages;

• an 18-story hotel tower containing 332 luxury rooms (including at least eight 1,000–1,200-square foot garden suites, seven 2,400-square foot two-story townhouse villas, and 12 penthouse-level suites), indoor pools and two fitness centers;

• a separate 4,000-square foot private gaming area containing six private VIP gaming salons, a private gaming cage, and butler service;

• 27,000 square feet of multi-purpose meeting and entertainment space with seating capacity for 2,500 people that includes access to outdoor terraces and approximately 7,000 square feet of meeting room space;

• a 7,500-square foot spa located on the VIP level; and

• eight restaurants and seven bars.

As of April 30, 2017, approximately 89% of the Guaranteed Maximum Price (defined below) under the construction manager agreement with LP Ciminelli for the Casino Project has been contracted. Additionally, approximately 53% of the construction of the Casino Project is complete.

Gaming Facility License

The Gaming Facility License became effective on March 1, 2016. The Gaming Facility License will have an initial duration of 10 years from March 1, 2016 and will be renewable thereafter for a period of at least an additional 10 years, as determined by the NYSGC. The Gaming Facility License is also subject to certain conditions established by the NYSGC, including the following:

•     the payment of an aggregate license fee of $51 million, which was paid on March 30, 2016;

• causing the investment of not less than approximately $854 million (the “Minimum Capital Investment”) in the development of the Initial Projects and infrastructure for the Destination Resort in accordance with the submitted plans for the Casino Project and the Destination Resort;

• deposit of a bond representing 10% of the Minimum Capital Investment (the "Minimum Capital Investment Deposit"), which was completed on March 1, 2016;

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• commencement of gaming operations on or before March 1, 2018;

• compliance with New York State minority-owned and woman-owned business enterprise ("MWBE") requirements with respect to the Casino Project; and

• the creation of a minimum of 1,425 full-time and 96 part-time jobs.

The Golf Course Project and the Entertainment Village Project

ERREI and ERREII are responsible for the development and construction of the Golf Course Project and the Entertainment Village Project, respectively. The development of the Entertainment Village Project is expected to be built-out in phases. The Company is currently preparing the design plans for the Entertainment Village Project, which will consist of a non-gaming hotel with 100-200 guest rooms as well as dining, entertainment and retail offerings. The targeted rating for this hotel and its related amenities is in the range of 3-Star and 3-Diamond standards to serve mid-market customers. On December 8, 2016, the Company submitted to the Town of Thompson Planning Board (the "Planning Board") an application for the approval for the site plan for the hotel to be located within the Entertainment Village Project. The Planning Board held a special public hearing to consider the application on March 1, 2017.

The Company has obtained final site approval from the Planning Board for, and has begun site preparation of, the redesign of the Golf Course Project. On December 28, 2016, the Planning Board extended this site plan approval for a period of six months to allow the Company to coordinate the commencement of construction and to obtain final approval of updates to the wetlands permits from the United States Army Corps of Engineers and the New York State Department of Environmental Conservation, if required.

Master Development Agreement and Completion Guaranties

On December 28, 2015 (the “MDA Effective Date”), the Project Parties, on the one hand, and EPR, on the other hand, entered into an Amended and Restated Master Development Agreement (as amended, the “MDA”), which amends and restates that certain master development agreement by and between EPT and MRMI originally executed on December 14, 2012. The MDA defines and governs the overall relationship between EPR and the Project Parties with respect to the development, construction, operation, management and disposition of the Initial Projects.

In accordance with the terms of the MDA, the Project Parties shall each be responsible for the development and construction of their portion of the Development Projects. On December 28, 2015, Empire entered into a Completion Guaranty, guaranteeing completion of the development and construction obligations of the Project Parties described in this paragraph.

In accordance with the terms of the MDA, EPR is responsible for the development and construction of the Waterpark and the common infrastructure-related improvements (such as streets, sidewalks, sanitary and storm sewer lines, water, gas, electric, telephone and other utility lines, systems, conduits and other similar facilities) for the Destination Resort. EPR has agreed to be responsible for the development and construction of the Waterpark with a minimum capital investment of $120 million, and the infrastructure for the Destination Resort. EPR financed the costs of the infrastructure by the issuance of tax-exempt bonds by a local development corporation. The debt service for these infrastructure bonds will be funded through special district tax assessments, a portion of which will be allocated to each of the parcels on which the Initial Projects are being built. EPR and the Project Parties have agreed to a capped dollar amount on the special district tax assessment for each of the parcels on which the Development Projects are being built, above which the Project Parties will not be responsible. On December 28, 2015, EPR Properties, a real estate investment trust and the parent company of EPR, entered into a Completion Guaranty, guaranteeing completion of the development and construction obligations of EPR described in this paragraph.

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

On January 24, 2017, the MDA was amended to (a) reflect that EPR has secured bond financing in connection with its infrastructure development obligations and (b) account for increases in the common infrastructure budget (and corresponding increases in Empire’s common infrastructure cap amount) in connection with the development of additional roads and increase in the budgeted amounts for New York State Electric and Gas costs. The changes to Empire’s common infrastructure cap

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amount were also reflected in each of the amendments to the Casino Lease, Golf Course Lease and Entertainment Village Lease.

Development Project Parcel Leases and Purchase Option Agreement

On December 28, 2015, the Project Parties entered into the Casino Lease, the Golf Course Lease, the Entertainment Village Lease and the Purchase Option Agreement (see Note L. "Commitments and Contingencies" to the Condensed Consolidated Financial Statements for more information). Option payments made by the Company pursuant to that certain option agreement, originally executed on December 21, 2011 and last amended on June 20, 2014 (the "Original Option Agreement"), which total $8.5 million, were applied against rent amounts due to EPT as rent under the Casino Lease. The Original Option Agreement, which granted the Company the right to lease the Casino Parcel, was superseded by the Casino Lease, Golf Course Lease and the Entertainment Village Lease, which are described above in Note L. "Commitments and Contingencies" to the Condensed Consolidated Financial Statements for more information.

Development Project Branding

RWS License Agreement

On March 31, 2017, Montreign Operating entered into the RWS License Agreement pursuant to which RWS granted Montreign Operating the non-exclusive, non-transferable, revocable and limited right to use certain RWS Licensed Marks in connection with the development, marketing, sales, management and operation of the Development Projects. See Note M. "Related Party Transactions" to the Condensed Consolidated Financial Statements for more information.

JCJ Architecture

Montreign Operating has entered into a professional services agreement with JCJ Architecture PC, which is a standard architectural agreement with normal and customary terms, and addresses, among other things, architectural services, dates of completion of the Casino Project and MWBE participation in the Casino Project.

ERREII has also entered into a professional services agreement with JCJ Architecture PC, which is a standard architectural agreement with normal and customary terms, and addresses, among other things, architectural services, dates of completion of the Entertainment Village Project and any necessary MWBE participation in the Entertainment Village Project.

LP Ciminelli

Montreign Operating has entered into a construction manager agreement with LP Ciminelli, Inc., which is a standard construction manager agreement with normal and customary terms, and addresses, among other things, the Guaranteed Maximum Price of approximately $511 million for the Casino Project (the "Guaranteed Maximum Price"), completion commitments and MWBE participation in the Casino Project. 

Monticello Casino and Raceway

Monticello Casino and Raceway began racing operations in 1958 and currently features the following:

• 1,070 VLTs and 40 ETGs (collectively 1,110 VGMs);

• year-round live harness horse racing;

• year-round simulcast pari-mutuel wagering on thoroughbred and harness horse racing from around the world;

• a 3,000-seat grandstand with retractable windows and a 100-seat clubhouse and bar, which are currently closed;

• parking spaces for 2,000 cars and 10 buses;

• an a la carte restaurant and a two-outlet food court with seating capacity for up to 100 patrons;

• a 1,386-square foot multi-functional space used for events;

• a 1,525-square foot simulcast room located directly adjacent to the gaming floor, with access to a small grandstand;

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• a casino bar; and

• an entertainment lounge with seating for 75 patrons.

VGM Operations

We operate a 45,000-square foot VGM facility known as Monticello Casino and Raceway. The VGMs are owned by New York State and VGM activities in New York State are overseen by the NYSGC. Revenues derived from our VGM operations consist of VGM revenues and food and beverage revenues.

Gross VGM revenues consist of the total amount wagered at our VGMs, less prizes awarded. The statute provides a

marketing allowance for racetracks operating video lottery programs of 10% on the first $100 million of net revenues generated

and 8% thereafter. Video lottery gaming is permitted for no more than 20 consecutive hours per day and on no day can such operation be conducted past 6:00 a.m.

Raceway Operations

Raceway operations, simulcasting and pari-mutuel wagering activities in New York State are overseen by the NYSGC. We derive our racing revenue principally from the following:

• wagering at Monticello Casino and Raceway on live races run at Monticello Casino and Raceway;

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

using export simulcasting;

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

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

simulcasting; and

• program and certain other ancillary activities.

Simulcasting

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

On November 3, 2014, MRMI and the MHHA entered into an agreement that governs the conduct of MRMI and MHHA relating to horseracing purse payments, the simulcasting of horse races and certain other payments (the “2014 MHHA Agreement”). The term of the 2014 MHHA Agreement expires seven years from the date the NYSGC approves the Casino Project to engage in legalized gaming. On that same date, MHHA will also receive, subject to adjustment for corporate events, 200,000 shares of common stock and a warrant to purchase 60,000 shares of common stock, the proceeds of any sales of which will provide additional monies for the harness horsemen’s purse account.

Pari-mutuel Wagering

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

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Critical Accounting Estimates

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

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

For further information on our critical accounting estimates, see Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2016. There have been no material changes to these estimates during the three-month period ended March 31, 2017.

Results of Operations - Three Months ended March 31, 2017 Compared to Three Months ended March 31, 2016

The results of operations for the three months ended March 31, 2017 and 2016 (unaudited) are summarized below (dollars in thousands):

	March 31, 2017			March 31, 2016			Variance $			Variance %
Revenues:
Gaming	$	12,893		$	14,522		$	(1,629	)	(11	)%
Food, beverage, racing and other	2,228			2,751			(523		)	(19	)%
Gross revenues	15,121			17,273			(2,152		)	(12	)%
Less: Promotional allowances	(352		)	(1,068		)	716			(67	)%
Net revenues	14,769			16,205			(1,436		)	(9	)%
Costs and expenses:
Gaming	9,860			10,801			(941		)	(9	)%
Food, beverage, racing and other	2,368			2,597			(229		)	(9	)%
Selling, general and administrative	3,689			3,597			92			3	%
Development expenses	4,269			3,067			1,202			39	%
Stock-based compensation	603			571			32			6	%
Depreciation	336			336			—			—	%
Total costs and expenses	21,125			20,969			156			1	%
Loss from operations	(6,356		)	(4,764		)	(1,592		)	33	%
Amortization of debt issuance costs	(1,274		)	(2		)	(1,272		)	63,600	%
Interest expense	(4,275		)	(411		)	(3,864		)	940	%
Interest income	454			—			454
Loss before income taxes	(11,451		)	(5,177		)	(6,274		)	121	%
Income tax provision	—			—			—			—	%
Net loss	$	(11,451	)	$	(5,177	)	$	(6,274	)	121	%

Gaming revenue

Gaming revenue decreased by approximately $1.6 million, or 11%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, from $14.5 million to $12.9 million. Handle decreased $17.3 million, or 8%, for the same period, primarily due to the poor weather conditions in the 2017 period as compared to milder conditions in 2016. VGM hold percentage decreased to 6.4% for the three months ended March 31, 2017 versus 6.7% for the same period in 2016, which partially caused the decrease in gaming revenue. Additionally, the average daily win per unit decreased from $143.77 to $127.85 for the same period.

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Food, beverage, racing and other revenue

Food, beverage, racing and other revenue decreased by approximately $523,000, or 19%, for the three months ended March 31, 2017 as compared to the three months ended March 31,2016, from $2.8 million to $2.2 million. Food and beverage revenue decreased approximately $351,000 for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, due to reduced sales in the food court and the closure of the buffet in December 2016 (which had generated $344,000 in revenues in the 2016 period). The Terrace Room was renovated and reopened as the Upper Deck, an a la carte restaurant.

Racing revenue decreased by $120,000 for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. The decrease in racing revenue is due to lower pari-mutuel and simulcasting commissions and lower receipts of OTB's statutory payments this quarter versus the same quarter last year. The decreased revenue in pari-mutuel and simulcasting commissions is due in part to a reduced horse population, resulting in fewer races and higher operating costs that adversely impact the operating margins of the revenue stream. Other revenue decreased by approximately $52,000 for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, due to lower ATM revenues, insurance settlement and vendor rebates.

Promotional allowances

Promotional allowances decreased by approximately $716,000, or 67%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, from $1.1 million to $352,000. Subsidized free play decreased $465,000 in the three-month 2017 period as compared to the 2016 period, due to an adjustment received from NYSGC for the quarter ended March 31, 2016. Coupons and discounts decreased $192,000 from the same period last year, due to lower promotional activity in the 2017 period. In addition, player club awards decreased approximately $72,000 as compared to last year. Partially offsetting these decreases were increases in food, beverage and discretionary complimentaries of $13,000.

Gaming costs

Gaming costs decreased by approximately $941,000, or 9%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, from $10.8 million to $9.9 million. NYSGC and other commissions decreased approximately $969,000 as compared to the same period in the prior year due to lower gaming revenue. Gaming wages and related benefits increased by approximately $21,000 as compared to the same period in the prior year, due to higher compensation expenses. Other gaming expenses increased by approximately $7,000, due to slightly higher expenditures for utilities, software costs and repairs and maintenance.

Food, beverage, racing and other costs

Food, beverage, racing and other costs decreased by approximately $229,000, or 9%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, from $2.6 million to $2.4 million, primarily due to lower food and beverage cost of goods sold of $163,000, due to lower sales volume. Additionally, purse and racing-related expenses decreased $34,000, and payroll and related benefit costs decreased $29,000, due to lower sales and staffing. Other costs increased by $3,000 in 2017 as compared to the 2016 period.

Selling, general and administrative expenses

Selling, general and administrative expenses increased by approximately $92,000, or 3%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, from $3.6 million to $3.7 million. Payroll and related benefit costs increased by approximately $213,000, primarily due to higher staffing levels. Real estate taxes increased $136,000 due to the phase-out of the Empire Zones tax credit program. State franchise taxes increased by $65,000, due to taxes on increased paid-in capital. Insurance expense increased $41,000, due to higher rates. Marketing expenses increased $39,000 for the 2017 period as compared to the prior year. There was also an aggregate increase of $28,000 in other expenses across various expense categories in 2017. Professional fees decreased $219,000 as compared to last year. Outside director fees decreased $140,000 in 2017 as compared to last year. NASDAQ and SEC-related expenses decreased $72,000 from the 2016 period, due to higher expenses in 2016 resulting from the January 2016 Rights Offering.

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Development Projects expenses

Development Projects expenses increased approximately $1.2 million, or 39%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, from $3.1 million to $4.3 million. During the three months ending March 31, 2017, payroll and related benefit costs increased $692,000, primarily due to new hires to staff the casino management team. Bank fees increased $350,000, due to fees associated with the line of credit. Advertising increased $85,000, due to efforts to increase branding. Land lease fees increased $61,000 and real estate taxes increased $64,000 as compared the same period in 2016. In addition, insurance expense increased $37,000 and pre-opening expenses increased $42,000 over the same period in the prior year. Partially offsetting these increases were savings of $163,000 from lower legal, consultants and other professional services fees incurred during the 2017 period.

Amortization of debt issuance costs

Amortization of debt issuance costs increased approximately $1.3 million for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, from $2,000 to $1.3 million. The increase in amortization expense is due to the financing for the new Term Loan Facility and the Kien Huat Montreign Loan for the construction of the Development Projects.

Interest expense

Interest expense increased approximately $3.9 million, or 940%, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, from $411,000 to $4.3 million. The increase in interest expense is due to borrowing under the Term B Loan Facility for the construction of the Development Projects. The amount of interest expense relating to the Series E Preferred Stock recorded was $231,000 for the three months ended March 31, 2016, due to the redemption of the Series E Preferred Stock in January 2016.

Interest income

Interest income increased approximately $454,000, for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016. The increase in interest income is due to interest received on the investment of unused cash for Development Projects.

Liquidity and Capital Resources

The accompanying consolidated financial statements have been prepared on a basis that contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company anticipates that its current cash and cash equivalents balances and cash generated from operations, as well as the net proceeds of the Term Loan Facility, the Kien Huat Montreign Loan and the $35 million required to be deposited into the lender-controlled account created under the Term Loan Facility, which are discussed below, will be sufficient to meet working capital requirements and the expected costs of the Development Projects for at least the next 12 months. Additionally, following the opening of the Casino Project to the public, which is expected to occur in March 2018, the Revolving Credit Facility will be available for use towards the working capital needs, capital expenditures and for other general corporate purposes of the Project Parties, subject to our ability to meet the conditions therein. Whether these resources are adequate to meet the Company’s liquidity needs beyond that period, including with respect to the costs of the Entertainment Village Project and the Golf Course Project, will depend on the Company’s growth and operating results and the final designs and progress of the Development Projects. In addition, cost overruns, delays in the construction schedule or changes in design are among the factors that may increase the projected costs of the Development Projects, which may also require us to raise additional capital. Pursuant to the Term Loan Facility, Montreign Operating is required to deposit $35 million into the lender-controlled account holding the net proceeds of the Term Loan Facility and the Kien Huat Montreign Loan, which amount will be used towards the Entertainment Village Project. Of the $35 million, $15 million is required to be deposited by June 30, 2017 and the remaining $20 million is required to be deposited by December 31, 2017. The Company must fund the $35 million in the form of a further equity contribution to Montreign Operating. The Company expects to raise additional debt or equity capital by the dates on which the deposits must be made. Additionally, the Company expects to raise furniture, fixtures and equipment ("FF&E") financing of up to $40 million to complete the Development Projects. To raise additional capital necessary for the Development Projects, to meet obligations under the Term Loan Facility or for the general corporate purposes of the Company, we may seek to enter into strategic agreements, joint ventures or similar agreements or we may sell additional debt or equity in public or private transactions, including pursuant to the commitment of Kien Huat to backstop the Follow-on Rights Offering (as defined and discussed below) in the amount of $35 million, which is discussed below. The sale

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of additional equity could result in additional dilution to the Company’s existing stockholders and financing arrangements may not be available to us, or may not be available in necessary amounts or on acceptable terms.

As of March 31, 2017, we had total current assets of approximately $13.6 million and total current liabilities of approximately $57.3 million, which includes approximately $45.7 million in accrued Development Projects costs. As of March 31, 2017, our total assets included approximately $393.4 million of remaining net proceeds from the Term Loan Facility, which will be used to pay the accrued Development Projects costs included in our current liabilities. The net proceeds from the Term Loan Facility, which will be used for Development Projects costs, are presented on the balance sheet as a non-current asset.

We have had continuing net losses and negative cash flow from operating activities, including a loss from operations of $6.4 million for the three months ended March 31, 2017. The net loss for the three months ended March 31, 2017 was primarily related to the development expenses in the amount of $4.3 million that could not be capitalized. Amortization of debt issuance costs was $1.3 million and interest expense was $4.3 million for the three-month period ended March 31, 2017. Additionally, $52.0 million of the costs incurred for the Development Projects were capitalized for the three months ended March 31, 2017.

The Gaming Facility License became effective on the License Award Effective Date, which was March 1, 2016. The Gaming Facility License is subject to certain conditions established by the NYSGC, which conditions, in addition to the Minimum Capital Investment, require Montreign Operating, and any successors and assigns, among other things, to (i) pay an aggregate license fee of $51 million within 30 days of the License Award Effective Date, and (ii) deposit via cash or bond 10% of the Minimum Capital Investment on the License Award Effective Date. On March 1, 2016, the Minimum Capital Investment Deposit, upon which Empire's Gaming Facility License was granted, was made in the aggregate amount of $85.4 million. The Project Parties' portion of the Minimum Capital Investment Deposit was made in the form of a deposit bond representing approximately $65.1 million, which is 10% of the Company's Minimum Capital Investment in the Casino Project, Golf Course and Entertainment Village. EPR's portion of the Minimum Capital Investment Deposit was made in the form of a deposit bond representing approximately $20 million, which is 10% of its Minimum Capital Investment in the Infrastructure and the Waterpark. The NYSGC will release the Minimum Capital Investment Deposit upon confirmation that 85% of the Company's proposed Minimum Capital Investment has been expended. The collateral security for the bond will be paid to the surety in installments as follows: (i) $15 million was paid on February 26, 2016; (ii) $20 million on July 1, 2017; and (iii) approximately $30.1 million on January 15, 2018, unless the surety has been discharged and released from all liability under the bond and the surety has determined that all obligations to the surety under an indemnity agreement have been fully paid, performed and satisfied.

To support the Company's financing needs for the Casino Project and, subsequently, the Entertainment Village Project and the Golf Course Project, Kien Huat entered into a series of commitment letters with the Company, which was last amended on September 22, 2015 (as amended, the "Kien Huat Commitment Letter"). Pursuant to the Kien Huat Commitment Letter, Kien Huat committed to an equity investment in the Company in the aggregate amount of $375 million in support of the Development Projects, the redemption of the Series E Preferred Stock and for working capital purposes. Kien Huat has invested an aggregate of $340 million of such commitment pursuant to the January 2015 Standby Purchase Agreement and the January 2016 Standby Purchase Agreement, each of which is described below. Kien Huat also agreed to participate in, and backstop, a follow-on rights offering on the same terms and conditions and at the same subscription price as the January 2016 Rights Offering, in an amount not to exceed $35 million (the "Follow-On Rights Offering").

On January 5, 2015, the Company commenced the January 2015 Rights Offering of non-transferable subscription rights to holders of record of our common stock and Series B Preferred Stock as of January 2, 2015. In connection with the January 2015 Rights Offering, on January 2, 2015, the Company and Kien Huat entered into the January 2015 Standby Purchase Agreement. Pursuant to the January 2015 Standby Purchase Agreement, Kien Huat agreed to exercise in full its basic subscription rights granted in the January 2015 Rights Offering within 10 days of its grant. In addition, Kien Huat agreed it would exercise all rights not otherwise exercised by the other holders in an aggregate amount not to exceed $50 million. The January 2015 Rights Offering closed on February 6, 2015 and the Company received net proceeds of approximately $49.5 million, which were used to pay the expenses of the Casino Project. Pursuant to the January 2015 Standby Purchase Agreement, we paid Kien Huat a commitment fee of $250,000 and reimbursed Kien Huat for its expenses in the amount of $40,000.

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

29

amount not to exceed $290 million. The January 2016 Rights Offering closed on February 17, 2016 and the Company received net proceeds of approximately $286.0 million, which were used to pay the expenses of the Development Projects, to redeem the Series E Preferred Stock and for the working capital purposes of the Company. Pursuant to the January 2016 Standby Purchase Agreement, we paid Kien Huat a commitment fee of $1,450,000 and reimbursed Kien Huat for its expenses in the amount of $50,000.

Upon consummation of the January 2016 Rights Offering, the 2010 Kien Huat Note in the original principal amount of $35 million, of which $17.4 million was outstanding as of December 31, 2015, which was issued by the Company to Kien Huat pursuant to the 2010 Kien Huat Loan Agreement, was converted into 1,332,058 shares of our common stock pursuant to the terms of the Note Conversion. The Note Conversion, along with the payment of interest due, satisfied the 2010 Kien Huat Note in full.

To further fund the Development Projects, on January 24, 2017, Montreign Operating entered into the Term Loan Agreement and Montreign Holding entered into the Kien Huat Montreign Loan Agreement. In connection with the consummation of the Term Loan Agreement, on the Loan Closing Date, the Kien Huat Construction Loan Agreement dated October 13, 2016, by and between Kien Huat and Montreign Operating expired on its terms without being utilized by Montreign Operating. Montreign Operating and Kien Huat had entered into the Kien Huat Construction Loan Agreement to provide Montreign Operating with short-term access to up to $50 million of loans to pay the expenses of the Casino Project while the debt financing for the Development Projects was being finalized.

The Term Loan Agreement provides Montreign Operating with an aggregate principal amount of $485 million senior secured first lien term loans, consisting of $70 million of Term A Loans and $415 million of Term B Loans. The obligations of Montreign Operating under the Term Loan Facility are guaranteed by the Montreign Subsidiaries and are secured by security interests in substantially all of the assets of the Project Parties, as well as by a pledge of the membership interests in Montreign Operating. In connection with the Term Loan Facility, Empire provided a completion guaranty capped at $30 million on the completion of construction of the Casino Project and the Entertainment Village Project. Pursuant to the Kien Huat Montreign Loan Agreement, Montreign Holding obtained the Kien Huat Montreign Loan in the principal amount of $32.3 million, of which $32.0 million will be contributed to the Development Project Parties as capital contribution. The obligations of Montreign Holding under the Kien Huat Montreign Loan Agreement are secured by a pledge of all the membership interests in Montreign Holding. Following the opening of the Casino Project to the public, the Company will be able to utilize the Revolving Credit Facility for the working capital needs, capital expenditures and other general corporate purposes of the Project Parties.

As a condition to the Term Loan Facility, the net proceeds of the Term B Loan, all of which was funded on the Loan Closing Date, and the Kien Huat Montreign Loan, were deposited into certain accounts controlled by the lenders under the Term Loan Facility. Any drawings on the Term A Loan, which may be made only after all of the proceeds of the Term B Loan have been deployed in the construction of the Development Projects or the operations of the Project Parties, will also be deposited into the same lender-controlled accounts. The Company has a further obligation to fund these lender-controlled accounts with $35 million in support of the Entertainment Village Project. Of this amount, $15 million is required to be deposited by June 30, 2017 and the remaining $20 million is required to be deposited by December 31, 2017. The Company expects to raise additional debt or equity capital by the dates on which the deposits must be made. In order to access the funds (including the net proceeds of the Term Loan Facility and the Kien Huat Montreign Loan) held in these lender-controlled accounts, Montreign Operating must satisfy the applicable disbursement conditions set forth in the Term Loan Agreement and ancillary agreements, such as providing evidence that the withdrawn funds are used for permitted purposes in connection with the Development Projects. Moreover, at the time of each borrowing under the Term Loan Facility, Montreign Operating must confirm that the representations and warranties made in the Term Loan Agreement have not been breached and that it is otherwise compliant with the terms of the Term Loan Agreement. In connection with the Term Loan Facility, the Company incurred $778,000 of financing fees as of December 31, 2016. These fees have been capitalized and were included in other assets at December 31, 2016 and will be amortized on a straight-line basis over the life of the Term Loan Facility.

The Term Loan Agreement, the Kien Huat Montreign Loan Agreement and the Revolving Credit Agreement contain representations and warranties and affirmative covenants, negative covenants and financial covenants that are usual and customary, including representations, warranties and covenants that, among other things, restrict the ability of Montreign Holding and the Project Parties to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, or make dividends or other distributions. In addition, in order to be able to draw on the $70 million Term A Loan, Montreign Operating must meet the conditions to borrowing under the Term A Loan at the time of such draw down. Pursuant to the loan agreements, the Project Parties may not incur additional indebtedness except for, among other things, obligations pursuant to hedging agreements required under the Term Loan Agreement, capital lease obligations and purchase money indebtedness (including FF&E financing) in an amount not exceeding $40 million, subordinated indebtedness so long as the proceeds are applied pursuant to the terms of the Term Loan Agreement and other indebtedness not exceeding $10 million. The Project Parties and Montreign Holding may not make any dividend or other distribution, redeem or otherwise acquire any equity

30

securities or subordinated indebtedness or enter into advisory, management or consulting agreements with an affiliate of any Project Party other than payments pursuant to tax sharing agreements, distributions in an amount not exceeding 1% of the net revenues of the Project Parties in any fiscal year, repurchase of capital stock of the Company in an amount not exceeding $1 million and required by the NYSGC, and certain available amounts of cash based on the application of financial covenants. In the fiscal quarter following the full opening of the Casino Project, as such term is defined in the Term Loan Agreement, Montreign Operating will also be subject to financial covenants relating to interest coverage ratio, lien leverage ratio and consolidated capital expenditures. Under the Kien Huat Montreign Loan Agreement, until the Kien Huat Montreign Loan is repaid in full, Montreign Holding is also restricted from making distributions to Empire except for purposes of (i) paying bona fide corporate overhead expenses in an amount not to exceed $9 million (which amount is subject to further reduction pursuant to the Kien Huat Montreign Loan Agreement) and (ii) making payments pursuant to a tax sharing agreement. Montreign Operating will have mandatory prepayment obligations under the Term Loan Agreement based on Excess Cash Flow, as defined in the Term Loan Agreement, after the Full Opening Date. In addition, following the discharge of the Term Loan Facility in full, Montreign Operating will have mandatory prepayment obligations under the Revolving Credit Facility based on excess cash flow, as defined in the Revolving Credit Agreement.

To comply with requirements under the Term B Loan, Montreign Operating entered into an interest rate cap agreement (the “Interest Rate Cap”) with Credit Suisse International on a notional amount of $415 million (subject to reduction in accordance with the terms of the Interest Rate Cap).  In return for the premium paid on entering into the Interest Rate Cap, Montreign Operating will receive monthly payments from Credit Suisse International starting on May 31, 2017 if one-month US Dollar LIBOR is greater than the agreed cap rate. 

We may also seek to enter into other strategic agreements, joint ventures or similar agreements or we may sell additional debt or equity in public or private transactions in support of the Development Projects and our ongoing operations. On October 14, 2016, we filed a universal shelf registration statement on Form S-3 (the "Shelf Registration Statement") covering the offer and sale of $250 million of our securities. The Shelf Registration Statement, which also carried over $83.8 million of our securities registered on an expiring shelf registration statement that remained unsold, was declared effective on November 17, 2016. As of April 30, 2017, we had up to approximately $333.0 million available for future issuances under the Shelf Registration Statement. Unless otherwise indicated in a prospectus supplement, the Company expects the net proceeds from the sale of securities will be used to support the Development Projects, capital expenditures at Empire’s existing facility, working capital and for other general corporate purposes. The Company may also use a portion of the net proceeds to acquire or invest in businesses, products and technologies that are complementary to our business.

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

Net cash used in operating activities was approximately $4.7 million and $12.2 million during the three months ended March 31, 2017 and 2016, respectively. We continue to have net losses and negative cash flow from operating activities, due to the expenses we are incurring related to the Development Projects. We incurred $4.3 million and $3.1 million of Development Projects costs during the three months ended March 31, 2017 and 2016, respectively, which amounts could not be capitalized. Operating activity for the three months ending March 31, 2016 was significantly affected by accrued Casino Project development expenses as of December 31, 2015, which were incurred prior to receiving the Gaming Facility License. Cash flows for the three-month 2017 period included a $2.4 million increase in accrued expenses. Our operating cash flows for the three months ended March 31, 2017 were negatively impacted by severe weather during the first quarter that caused a reduction in revenues. The decrease in cash flow in the 2017 period was partially due to an increase of $1.3 million in amortization of debt issuance costs and a $727,000 increase in non-cash interest expense.

Net cash used in investing activities was approximately $416.4 million and $236.5 million for the three months ended March 31, 2017 and 2016, respectively. The increase over 2016 is primarily due to a $367.0 million change in cash restricted for the Development Projects and $48.3 million of capitalized Development Projects costs. Our total assets include approximately $393.4 million of remaining net proceeds available from the Term Loan Facility, which are presented on the Condensed Consolidated Balance Sheet as a non-current asset. The proceeds of the Term Loan Facility may be used solely to pay for the expenses relating to the Development Projects. For the three months ending March 31, 2016, we incurred approximately $15.0 million for a cash collateral bond, $51.0 million for a license fee payment for the Casino Project and $15.3 million for development projects.

Net cash provided by financing activities was approximately $418.0 million and $255.2 million for the three months ended March 31, 2017 and 2016, respectively. Approximately $415.0 million was received from the proceeds of the Term Loan Facility

31

in January 2017, and an additional $32.0 million was borrowed from Kien Huat. These amounts were reduced by $28.8 million of debt issuance costs and Interest Rate Cap fees. During the 2016 period, $286.0 million was received from the January 2016 Rights Offering, which was net of approximately $4.0 million of expenses and $30.7 million was used to redeem the Series E Preferred Stock.

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

The table below lists the payment commitments of the Company as of March 31, 2017. It has been updated from the disclosure in the Company's Form 10-K for the year ended December 31, 2016 to reflect the borrowings incurred on January 24, 2017 to finance the Development Projects.

			Payments due by period
			(in thousands)
Period ending March 31,	Casino Lease	Golf Course Lease	Entertainment Village Lease		Kien Huat Montreign Loan (1)	Term B Loan (2)	Total Payments
2018	$12,000	$0		$0	$0	$0	$12,000
2019	9,375	12		88	—	4,150	13,625
2020	7,500	150		150	—	4,150	11,950
2021	7,500	150		150	—	4,150	11,950
2022	8,375	150		150	—	4,150	12,825
2023 to 2056	352,374	7,788		7,787	76,250	398,400	842,599
Total	$397,124	$8,250		$8,325	$76,250	$415,000	$904,949

(1) The Kien Huat Montreign Loan includes accrued cumulative compounded interest and matures on February 24, 2024.

(2) The Term B Loan is a variable rate instrument; accordingly the payments reflected above include principal amounts only.

32

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Market risk is the risk of loss arising from adverse changes in market rates and prices, including interest rates, commodity prices and equity prices. We do not hold any market risk sensitive investments. The interest rate on the Term B Loan entered into on January 24, 2017, contains a variable component based on one-month LIBOR. However, the Interest Rate Cap entered into in February 2017 provides a limit on our exposure to increases in one-month LIBOR on the entire $415 million balance from May 1, 2017 through February 28, 2018. Accordingly, a one-point increase in LIBOR would increase interest incurred (prior to interest capitalization) by approximately $1.8 million, for the next 12 month period. The Kien Huat Montreign Loan has a fixed interest rate; accordingly, it does not subject us to interest rate risk.

Item 4. Controls and Procedures.

Evaluation of Controls and Procedures

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

We carried out an evaluation as of March 31, 2017, 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.

Changes in Internal Control over Financial Reporting

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

33

PART II- Other Information

Item 1. Legal Proceedings.

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

Item 1A. Risk Factors.

There have been no material changes in our risk factors from those set forth in our Form 10-K for the year ended December 31, 2016, which should be read in conjunction with this report.

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

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

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits.

10.1	License Agreement Between Montreign Operating Company, LLC and RW Services Pte Ltd, dated as of March 31, 2017*
10.2	Employment Agreement between Empire Resorts, Inc. and Ryan Eller, dated as of March 27, 2017 (incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K as filed with the Securities and Exchange Commission on March 27, 2017)
31.1	Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of the Executive Vice President - 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 Executive Vice President - Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	* Portions of this exhibit have been redacted pursuant to a request for confidential treatment under 17 C.F.R. Section 240.24b-2.
101	Interactive Data File (XBRL).

34

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: May 4, 2017	/s/ Joseph A. D’Amato
	Joseph A. D’Amato
	Chief Executive Officer

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: May 4, 2017	/s/ Laurette J. Pitts
	Laurette J. Pitts
	Executive Vice President - Chief Financial Officer

35

EX-10.1

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions hereof denoted with “[***]”

DATED THIS 31st DAY OF MARCH 2017

BETWEEN

RW SERVICES PTE LTD

AND

MONTREIGN OPERATING COMPANY, LLC

LICENSE AGREEMENT

{00501808.DOC.1}    

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions hereof denoted with “[***]”

THIS AGREEMENT is made on March 31, 2017 (the “Commencement Date”) between

RW SERVICES PTE LTD, a company incorporated in Singapore and having its registered address at 77, Robinson Road, #13-00 Robinson 77, Singapore 068896 (“RWS”) of the first part; And

MONTREIGN OPERATING COMPANY, LLC, a limited liability company formed in New York and having its registered address at c/o Monticello Raceway and Casino, 204 State Route 17B, P.O. Box 028, Monticello, New York 120701 (“MONTREIGN”) of the second part.

WHEREAS:

A. MONTREIGN has been granted a license to develop and operate a casino (“Montreign Resort Casino”) which includes, without limitation, casino tables, slots, restaurants, parking and transportation facilities and such other facilities or amenities as may be added thereto at any time and from time to time (“Montreign Project”). In addition, in connection with the Montreign Project, subsidiaries of Montreign will be developing an entertainment village, which will include a hotel, retail, restaurant, shopping and entertainment (the “Entertainment Village”) and the “Monster” golf course (the “Golf Course” and, together with the Montreign Project and the Entertainment Village, the “Projects”).

B. In addition, RWS has rights to license the use of the IP Rights (as herein defined) in connection with the development, management, operation and marketing of the Projects.

C. MONTREIGN desires to obtain certain rights to use the IP Rights on the Properties and in connection with the Projects, subject to the terms and conditions as hereinafter contained.

THIS AGREEMENT WITNESSES that in consideration of, among other things, the mutual promises contained in this Agreement, the Parties hereby agree as follows:

1. Definitions and Interpretations

1.1 In this Agreement, unless the context otherwise requires, the following words and phrases shall have the respective meanings assigned to them:

“Agreement”	means this Agreement in respect of the licensing of the IP Rights, including all Schedules attached hereto and any amendments in writing thereto;
“Affiliates”	means, with respect to any person, any other person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such first mentioned person. For the purposes of this definition, the terms “control”, “controlled by”, and “under common control with” shall mean the possession, directly or indirectly, of the majority voting rights or of the power to direct or cause the direction of the management, or policies of a person (whether through the ownership of securities, or partnership or other ownership interest, by contract or otherwise);
“Brand Manual(s)”	means the brand manuals developed by RWS to implement the use of the Genting Trade Mark and the Resorts World Trade Mark pursuant to this Agreement, as amended, supplemented, or otherwise modified from time to time by RWS;

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions hereof denoted with “[***]”

“Business Day”	means a day (other than a Saturday or Sunday) on which banks are generally open for normal banking transactions in New York, New York in the United States of America;
“Casino Facilities”	means legal casino facilities only;
“Confidential Information”	has the meaning assigned to it in clause 9.2;
“Commencement Date”	has the meaning assigned to it in the preambles;
“Default Rate”	has the meaning assigned to it in clause 4.4;
“Differential Sum”	has the meaning assigned to it in clause 4.4;
“Effective Date”	means the date the Montreign Project opens to the public for business, including any soft opening for business;
“Enhancement”	has the meaning assigned to it in clause 5.5;
“Entertainment Village”	has the meaning assigned to it in Recital A;
“Entertainment Village Property”	means the premises demised by the Lease, dated December 28, 2015, by and between Adelaar Developer, LLC and Empire Resorts Real Estate II, LLC;
“Extension Term”	has the meaning assigned to it in clause 3.2;
“Excluded Receipts”	Has the meaning as follows: a)any gratuities or service charges added to the bill of a customer, guest or patron and passed on to employees of the Montreign Project; b)revenues corresponding to any credits or refunds made to customers, guests or patrons c)any sums and credits received by the Montreign Project; for lost or damaged merchandise d)any insurance proceeds other than for business interruption related to casualty or damage and other than proceeds that reimburse the Montreign Project for any cost accounted as an expense under GAAP; e) any receipts from sales taxes, use taxes, excise taxes, gross receipt taxes, admission taxes, entertainment taxes, tourist taxes or charges received from customers, guests or patrons and passed on to a Governmental Authority; f)any condemnation awards other than for temporary condemnation; g)revenue recorded for interest, distributions, or dividends earned on bank accounts and investments; h)complimentaries;

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions hereof denoted with “[***]”

	i)ATM fees, check cashing fees and other miscellaneous revenue (to be mutually agreed upon); j)Issuance of free play and other promotional items; k)Any receivables written off as bad debt by Montreign when so written off by Montreign Any recovered bad debts would however be recognized as part of net revenue in the period that they are recovered; and l)Any proceeds generated from Gaming Operations or other activities on the Properties held for charitable purposes;
“Expense Cap”	has the meaning assigned to it in clause 6.8;
“Fiscal Year”	means the 12-month period ending on 31 December of each year, or such other fiscal year as MONTREIGN may select from time to time;
“GAAP”	means generally accepted accounting principles in the United States as set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants from time to time and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession;
“Gaming Authorities”	has the meaning assigned to it in clause 10.3;
“Gaming License”	shall mean any licenses, permits, approvals, registrations, findings of suitability or other authorizations from any Governmental Authority required to own, develop, lease or operate (directly or indirectly) the Projects because of the gaming operations conducted or proposed to be conducted thereat or by MONTREIGN, including all such licenses, permits, approvals, registrations, findings of suitability or other authorizations granted under applicable Laws;
“Gaming Operations”	means the conduct of any gambling on the Montreign Property, including all aspects of management, operations, establishment of working policies, employee supervision, security, accounting, and financial control of such gambling activities;
“Genting IP”	means the Genting Trade Mark to the extent such rights subsist in the Territory;
“Genting Trade Mark”	means the trade marks and service marks as depicted in Schedule 1and any other trade mark or service mark which incorporates the words “Genting” and/or the logo as depicted in Schedule 1as may be notified by RWS to MONTREIGN from time to time, in each case to the extent such trade marks and service marks subsist in the Territory. The list of the relevant registrations of the Genting Trade Mark include, but are not limited to, the trade marks depicted on Schedule 1;
“Golf Course”	has the meaning assigned to it in Recital A;
“Golf Course Property”	means the premises demised by the Lease, dated December 28, 2015, by and between Adelaar Developer, LLC and Empire Resorts Real Estate I, LLC;

Confidential Treatment Requested by Empire Resorts, Inc.

IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions hereof denoted with “[***]”

“Government Authority” or “Governmental Authority”	means any nation or government, any state, county, regional, local or municipal government, any bureau, department, agency or other political subdivision thereof, and any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, government (including any court), including, without limitation, Gaming Authorities;
“Integrated Resorts”	means large scale entertainment destinations, comprising without limitation theme parks, spas, convention facilities, concert halls, large retail facilities, parks, and/or other entertainment facilities;
“Intellectual Property Rights”	means: (i) copyright, patents, database rights and rights in trademarks, designs, know-how and confidential information (whether registered or unregistered); (ii) applications for registration, and the right to apply for registration, for any of these rights; and (iii) all other intellectual property rights and equivalent or similar forms of protection existing anywhere in the world;
“Initial License Term”	has the meaning assigned to it in clause 3.1;
“IP Rights”	means such rights as RWS has in the Genting IP and the Resorts World IP;
“Law(s)”	means any federal, state, local or foreign law, in each case, whether written or established by custom or tradition, including common law, and any regulation, rule, requirement, policy, judgment, order, writ, decree, ruling, award, approval, authorisation, consent, license, waiver, variance, guideline or permit of, or any agreement with, any Governmental Authority;
“Licensed Marks”	means the Genting Trade Mark and the Resorts World Trade Mark collectively;
“License Notices”	has the meaning assigned to it in clause 6.2;
“License Term”	has the meaning assigned to it in clause 3.2;
“Marketing”	has the meaning assigned to it in clause 2.2;
“Marketing Materials”	has the meaning assigned to it in clause 2.2;
“Marks Transition Period”	has the meaning assigned to it in clause 6.8;
“Montreign Project”	has the meaning assigned to it in Recital A;
“Montreign Property”	means the premises demised by the Lease, dated December 28, 2015, by and between EPT Concord II, LLC and Montreign Operating Company, LLC;
“Net Revenue”	Means Net Revenue, as such term is defined in GAAP, minus the Excluded Receipts;
“Parties”	means RWS and MONTREIGN collectively and “Party” means any of them, as the context may require;
“Permitted Purpose”	means the permitted use by MONTREIGN of the IP Rights licensed pursuant to this Agreement, as specifically set out in clauses2.1 and 2.2;
“Projects”	has the meaning assigned to it in Recital A;
“Properties”	means the Montreign Property, the Entertainment Village Property and the Golf Course Property
“License Fee”	has the meaning assigned to it in clause 4.1;
“Resort Facilities”	means each and all of hotels, convention centres, restaurants, theatre restaurants, exhibitions centres and recreation facilities;

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“Resorts World IP”	means Resorts World Trade Mark to the extent such rights subsist in the Territory;
“Resorts World Trade Mark”	means the trade marks as depicted in Schedule 2and any other trade mark or service mark which incorporates the words “Resorts World”, “RW” or the logo depicted in Schedule 2as may be notified by RWS to MONTREIGN from time to time, in each case to the extent such trademarks subsist in the Territory. The list of the relevant registrations of the Resorts World Trade Mark include, but are not limited to, the trade marks depicted on Schedule 2.
“SIAC”	means the Singapore International Arbitration Centre;
“Termination Transition Period”	shall have the meaning assigned to in in clause 3.3; and
“Territory”	means all countries in the world except Malaysia;
“True Up Payment Date”	has the meaning assigned to it in clause 4.4;
“Unsuitable Person”	shall have the meaning set forth in § 1318 of the Upstate New York Gaming and Economic Development Act.

1.2 In this Agreement any reference, express or implied, to an enactment (which includes any legislation in any jurisdiction) includes:

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1.2.1 that enactment as amended, extended or applied by or under any other enactment (before, on or after execution of this Agreement);

1.2.2 any enactment which that enactment re-enacts (with or without modification); and

1.2.3 any subordinate legislation made (before, on or after execution of this Agreement) under that enactment, including (where applicable) that enactment as amended, extended, or applied as described in clause 1.2.1 above, or under any enactment which it re-enacts as described in clause 1.2.2 above.

1.3 The Schedules form part of this Agreement.

1.4 Headings in this Agreement are for reference only and shall not affect the construction and interpretation of any provision herein contained.

1.5 Words importing the singular shall also include the plural and vice-versa where the context so requires. References to a person shall be construed as including references to an individual, firm, company, corporation, unincorporated body of persons or any state or agency thereof.

1.6 No rule of construction shall apply to the detriment of any Party by reason of that Party having control of and/or having been responsible for the preparation of this Agreement.

1.7 Any express statement of a right of a Party under this Agreement is without prejudice to any other right of that Party expressly stated in this Agreement or arising at law.

1.8 References to a company shall be construed so as to include any company, corporation or other body corporate or other legal entity, wherever and however incorporated or established.

1.9 The eiusdem generis rule does not apply to this Agreement. Accordingly, specific words indicating a type, class or category of thing do not restrict the meaning of general words following such specific words, such as general words introduced by the word other or a similar expression. Similarly, general words followed by specific words shall not be restricted in meaning to the type, class or category of thing indicated by such specific words.

1.10 Where an act is required to be done within a specified number of days after or from a specified date, the period is inclusive of and begins to run from the date so specified and if the last day of the period is not a Business Day, then the period shall include the next following Business Day.

1.11 A period of one (1) month is a reference to a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month save that, where any such period would otherwise end on a day which is not a Business Day, it shall end on the next Business Day, unless that day falls in the calendar month succeeding that in which it would otherwise have ended, in which case it shall end on the preceding Business Day provided that, if a period starts on the last Business Day in a calendar month or if there is no numerically corresponding day in the month in which that period ends, that period shall end on the last Business Day in that later month (and references to "months" shall be construed accordingly).

2. Grant of License

2.1 Subject to the terms and conditions of this Agreement, RWS hereby grants, and MONTREIGN hereby accepts, for the License Term, a non-exclusive, non-assignable (except as provided in clause 5.4), non-transferable, non-sublicensable (except as provided in clause 5.3), revocable, limited license to use the IP Rights, solely (i) on the Properties and (ii) for online gaming purposes, in connection with the development, marketing, sales, management and operation of the Projects. Notwithstanding anything to the contrary in this Agreement, the license RWS hereby grants to MONTREIGN in the use of “Resorts World” “in combination with any words mutually agreed by RWS and MONTREIGN as the mark identifying the Casino Project (the

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“Casino Name”) (in any form in accordance with the Brand Manual(s)) shall be an exclusive, non-assignable (except as provided in clause 5.4), non-transferable, non-sublicensable (except as provided in clause 5.3), revocable, limited license.

2.2 Notwithstanding clause 2.1 above, MONTREIGN shall be permitted to use the Licensed Marks outside the Properties (but at all times within the Territory) solely for the purpose of conducting advertising, promotion, publicity and other marketing activities (“Marketing”) to advance the business of the Projects as set forth herein. Such Marketing shall consist of:

(a) Traditional advertising in print, magazine, out-of-home, transit and broadcast media (whether transmitted in analog or digital formats), including television and radio;

(b) Digital and online marketing activities as set forth on Schedule 3 hereof; and

(c) Public relations, community relations, government relations, corporate relations, for-profit and not-for-profit sponsorship agreements;

(d) Printed and digital forms of marketing collateral to include, but not limited to, brochures, flyers, menus, stationary, directories, logoed hotel items and promotional items;

(e) Interior and exterior signage to include printed, digital and fabricated structures;

(f) Direct marketing to include mail, email, phone and targeted digital;

(g) Approved joint- and co-branded marketing and special events;

(h) Logoed gifts, retail items and promotional items;

(i) Player loyalty program cards and property gift cards;

(j) Any other marketing activities subsequently approved in writing by RWS.

(collectively, to the extent any such materials utilise any of the Licensed Marks, the “Marketing Materials”).

2.3 Unless otherwise agreed in writing by RWS, the license granted herein to use the IP Rights shall be limited to use within the Properties and for the purposes described in clauses 2.1 and 2.2 above (such purposes the “Permitted Purposes”). In addition, without the written consent of RWS, the Permitted Purposes shall not include the use of any IP Rights other than the Casino Name in connection with online gaming.

2.4 Genting Rewards Alliance Loyalty Program

2.4.1     During the License Term and subject to any applicable Law, RWS or its Affiliate may host and maintain a website for the Genting Rewards Alliance loyalty program currently located at www.gentingrewards.com for users in the Territory (the “Global Rewards Web Site”). Subject to MONTREIGN’s participation in the Genting Rewards Alliance, RWS will provide a link from the Global Rewards Web Site to the web sites and communication channels of MONTREIGN and will promote the Projects and provide central marketing activities for direct mailing programs of the Projects through the Global Rewards Web Site, including cross-promotion of the Montreign Resort Casino with other alliances of the Genting Rewards Alliance.

2.4.2 During the License Term and subject to any applicable Law, MONTREIGN may participate in the Genting Rewards Alliance loyalty program as an alliance member. The terms and conditions and the fees payable by MONTREIGN for participation in the Genting Rewards Alliance loyalty program, and the extent of MONTREIGN’S participation therein, shall be set forth in that certain Genting Rewards Alliance Agreement to be mutually agreed upon by the Parties. Nothing in this Agreement, shall limit the rights granted under Genting Rewards Alliance Agreement to the extent it is consummated.

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3. Duration

3.1 This Agreement shall commence on the Commencement Date and unless sooner terminated in accordance with clause 8, shall continue for a period from the Commencement Date until 31 December 2027 (“Initial License Term”).

3.2 The Initial License Term shall automatically be extended for further periods of twelve (12) months each (each, an “Extension Term,” collectively, the “Extension Terms”) up to a maximum of 39 Extension Terms unless RWS or MONTREIGN provides notice of termination pursuant to clause 8, clause 10.3 or clause 11.3.2 of this Agreement. During each Extension Term, all of the terms and conditions of this Agreement shall continue in full force and effect and all references to the “License Term” shall mean the Initial License Term and all Extensions Terms.

3.3. A transitional period shall commence immediately upon the date of the termination of the Initial License Term or Extension Term (such date, the “Termination Date”), as applicable, and shall continue for a period of twelve (12) months following the Termination Date (the “TerminationTransition Period”).  During the Termination Transition Period, RWS and MONTREIGN  shall coordinate and arrange for cessation of use of the IP Rights. Licensee shall bear the costs of any required changes to phase out the use of IP Rights.

The provisions of this clause 3.3 shall apply only in the event of the anticipated expiration of the License Term at the conclusion of such License Term under this Article 3 and shall not supersede clause 8.2 of this Agreement which allows transitional use of the Licensed Marks in the event of early termination under Article 8 of this Agreement. 

4. Fees, Payment and Withholding Taxes

4.1 In consideration of the rights and licenses granted by RWS to MONTREIGN pursuant to clause 2.1 and 2.2 and otherwise under this Agreement, MONTREIGN shall pay to RWS for the License Term from and after the Effective Date a license fee payable quarterly (“License Fee”) equivalent to a percentage of Net Revenue as designated in clause 4.2 below. The License Fee shall be pro-rated if the period between the Effective Date and 31 December of that Fiscal Year in which the Effective Date takes place is less than twelve (12) months. For purposes of clarification, although no License Fee shall be due for the period from the Commencement Date to the Effective Date, MONTREIGN shall have the right to use the IP Rights granted hereunder pursuant to the terms of this Agreement for pre-opening marketing activities which are not revenue generating.

4.2 During the term of the Agreement, the License Fee for the Initial License Term and for each Extension Term, if any, which License Fee shall be payable on a quarterly basis per clause 4.3, shall be as follows:

Yr #1 – [***]% of Net Revenues generated in that year from (i) all activity on the Montreign Property, (ii) the specific use of the Licensed Marks on the Entertainment Village Property and the Golf Course Property and (iii) the specific use of the Licensed Marks in connection with online gaming.

Yr #2 - [***]% Net Revenues generated in that year from (i) all activity on the Montreign Property, (ii) the specific use of the Licensed Marks on the Entertainment Village Property and the Golf Course Property and (iii) the specific use of the Licensed Marks in connection with online gaming.

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Yr #3 - [***]% Net Revenues generated in that year from (i) all activity on the Montreign Property (ii) the specific use of the Licensed Marks on the Entertainment Village Property and the Golf Course Property and (iii) the specific use of the Licensed Marks in connection with online gaming.

Yr #4 - [***]% Net Revenues generated in that year from (i) all activity on the Montreign Property, (ii) the specific use of the Licensed Marks on the Entertainment Village Property and the Golf Course Property and (iii) the specific use of the Licensed Marks in connection with online gaming.

Yr #5 - [***]% Net Revenues generated in that year from (i) all activity on the Montreign Property, (ii) the specific use of the Licensed Marks on the Entertainment Village Property and the Golf Course Property and (iii) the specific use of the Licensed Marks in connection with online gaming.

Yr #6 - [***]% Net Revenues generated in that year from (i) all activity on the Montreign Property, (ii) the specific use of the Licensed Marks on the Entertainment Village Property and the Golf Course Property and (iii) the specific use of the Licensed Marks in connection with online gaming.

Thereafter, the License Fee for any License Term shall be [***]% of Net Revenues generated in that License Term from (i) all activity on the Montreign Property, (ii) the specific use of the Licensed Marks on the Entertainment Village Property and the Golf Course Property and (iii) the specific use of the Licensed Marks in connection with online gaming.

4.3 Commencing on the Effective Date, the License Fee shall be due and payable in quarterly installments, due within thirty (30) days after the end of each quarter, calculated based on the internal quarterly financial statements of MONTREIGN.

4.4 Within ten (10) Business Days following completion of the audited financial statements of MONTREIGN for each Fiscal Year, and in no event later than one hundred and twenty (120) days from MONTREIGN’s Fiscal Year end (“True Up Payment Date”), there shall be a computation and true-up of the License Fee for such License Term accompanied by a copy of MONTREIGN’s audited financial statements, and either RWS or MONTREIGN, as applicable, shall pay to the other an amount equal to any difference between the aggregate License Fee for such Fiscal Year paid by MONTREIGN to RWS based on MONTREIGN’s quarterly financial statements during such License Term pursuant to clauses 4.1 and 4.2 above, and the License Fee calculated for such License Term based on the audited financial statements of Montreign, as so determined (“Differential Sum”) such that RWS shall pay the Differential Sum in respect of any negative difference and MONTREIGN shall pay the Differential Sum in respect of any positive difference as described in this clause 4.4. Concurrently with each payment of the License Fee, MONTREIGN shall furnish to RWS documentation reasonably satisfactory to RWS in support of the computation of such payment. Any payments of the License Fee not paid when due hereunder shall accrue and bear interest for each calendar quarter at one percent (1%) per month calculated on a daily basis (“Default Rate”), subject to applicable usury laws, in order to compensate RWS for the loss of the use of such delinquent payment.

4.5 Financial Records and Auditing. During the License Term and for a period of four (4) calendar years thereafter, MONTREIGN shall keep and maintain or shall cause its independent third party auditor to keep and maintain, financial statements and records relating to the subject matter of this Agreement for the purposes of confirming the License Fee to be accounted for and paid according to clause 4.1 (“Financial Records”). RWS or its agent (limited to a nationally recognized accounting firm) shall have the right upon advance written notice to MONTREIGN, to inspect and audit the Financial Records. The costs of any such inspection or audit shall be borne by RWS, unless such inspection or audit reveals a discrepancy adverse to RWS of five

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percent (5%) or more of the License Fee reported by MONTREIGN to RWS, in which case MONTREIGN shall be responsible for the actual costs of such inspection or audit.

4.6 In the event this Agreement is terminated for any reason, the Differential Sum shall be settled promptly on or before the True Up Payment Date in respect of the License Term immediately after termination and this provision shall survive termination of this Agreement for any reason whatsoever.

4.7 The Parties agree that the License Fee is a royalty or will be treated as such for all tax purposes. Under the United States Internal Revenue Code, such a royalty will be subject to a withholding tax, currently in the amount of thirty percent (30%), on all payments made to a foreign corporation (the “Withholding Obligation”). MONTREIGN agrees to withhold or deduct from the Quarterly License Fee payable to RWS and pay directly to the appropriate United States tax authority the Withholding Obligation. In the event of any change in the law such that the Withholding Obligation rate exceeds thirty percent (30%), MONTREIGN agrees to bear such additional withholding tax in excess of the thirty percent (30%) rate and to this end, MONTREIGN shall pay RWS such additional sums necessary to ensure the maximum Withholding Obligation suffered by RWI does not exceed thirty percent (30%).

5. Ownership; Reservation of Rights; No Sublicences.

5.1 All rights in any IP Rights not granted by RWS to MONTREIGN pursuant to this Agreement are expressly reserved to RWS, and no additional licenses are granted or implied hereunder. Except as set forth in this Agreement, MONTREIGN shall not (i) acquire any other right, title or interest in or to the use of any IP Rights or (ii) assert any claim to the IP Rights or any goodwill relating thereto, in each case, during or after the License Term. Except as expressly provided in this Agreement, MONTREIGN shall not use any Licensed Marks for any purpose or in any manner without first obtaining RWS’s written consent, which consent may be withheld in RWS’s sole and absolute discretion. For the avoidance of doubt, MONTREIGN shall have no right to use the Licensed Marks including, without limitation, in connection with the corporate name of MONTREIGN or any of its Affiliates or the registration of domain names, other than in connection with the Projects pursuant to the terms and conditions of this Agreement. The agreements as set out in Schedule 4attached hereto including, without limitation, the use of the Licensed Marks contemplated therein, are deemed approved as of the Commencement Date.

5.2 Nothing in this Agreement or elsewhere shall be construed to prevent or limit RWS and/or its Affiliates from (a) granting any other new licenses for the use of any IP Rights excluding the Casino Name, (b) encumbering, assigning, pledging or hypothecating any Licensed Mark in any way, or (c) using or exploiting for its own purposes (or for the purposes of any Affiliate of RWS) any IP Rights other than the Casino Mark in or in connection with any of its or any such Affiliate’s businesses or in any manner throughout the world, including the United States of America, to the extent it does not affect the enjoyment by MONTREIGN of the rights and license granted to MONTREIGN in the IP Rights in this Agreement.

5.3 MONTREIGN may not sublicense or assign to any person any IP Rights or any use thereof without RWS’s prior written approval, which approval may be withheld in RWS’s sole and absolute discretion. Notwithstanding the foregoing, MONTREIGN may, upon prior written approval of RWS, which approval shall not be unreasonably withheld or delayed, allow use of the IP Rights within the Projects by third parties providing services, including the operation of portions of the Projects by third party vendors or lessees. MONTREIGN acknowledges and agrees that it shall remain liable for all actions of such third party service providers and that no title, ownership, or intellectual property rights of any kind including, but not limited to, the

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right to sublicense, the IP Rights are, by virtue of this provision, granted to MONTREIGN or such third party service providers.

5.4 MONTREIGN shall not assign, transfer, grant any right in or create any trust in respect of, or purport to assign, transfer, grant any right in or create any trust in respect of, any of its rights or obligations in relation to the IP Rights under this Agreement save as expressly provided in this Agreement.

6. Conditions of Use of the IP Rights and Quality Control

6.1 RWS shall provide MONTREIGN with Brand Manuals. Subject to clause 6.8 below, the Brand Manuals shall apply from and after the date which is two (2) Business Days after MONTREIGN’s receipt of the Brand Manuals. Subject to clause 6.8 below, MONTREIGN shall use the Licensed Marks consistent with and in not violation of the Brand Manual. MONTREIGN acknowledges and agrees that (i) the Licensed Marks carry a reputation of high quality and integrity, (ii) the operation of the Montreign Project and, to the extent the Licensed Marks are used thereon, the Entertainment Village Project and the Golf Course Project, and the associated products and services bearing the Licensed Marks, in accordance with high standards set forth in the Brand Manuals are material conditions of this Agreement, and (iii) MONTREIGN will use of the Licensed Marks on the Montreign Project and, to the extent the Licensed Marks are used thereon, the Entertainment Village Project and the Golf Course Project, in accordance with such standards set forth in the Brand Manuals and in this Agreement.

6.2 Upon RWS’s request, MONTREIGN shall place all customary notices (“License Notices”) reasonably acceptable to RWS on any marketing, advertising or promotional materials, products and physical goods bearing the Licensed Marks, to identify the licensed use under this Agreement and the proprietary rights in and to such Licensed Marks.

6.3 Prior to any first use or exploitation of any Licensed Marks by MONTREIGN within a particular marketing channel, at least one (1) representative specimen showing such uses by MONTREIGN of such Licensed Marks, and the location of any License Notices thereon, on any Marketing Materials, shall be provided by MONTREIGN to RWS at MONTREIGN’s sole expense, together with any other reasonable information requested by RWS in connection to the Marketing Materials. Such materials shall also be subject to prepublication review by, and approval of, RWS. Except as otherwise agreed by the Parties, based upon exceptional circumstances, RWS shall have five (5) Business Days to review and approve any such specimen. If RWS does not respond within the applicable period, such specimen shall be deemed to have been approved. For the avoidance of doubt, any new Marketing channels proposed for use by MONTREIGN, even for an existing use or exploitation, shall be subject to this review. In addition, at RWS’s request, MONTREIGN will provide RWS with copies of all new or updated Marketing Materials used by Montreign on a quarterly basis.

6.4 MONTREIGN shall use the IP Rights and display the Licensed Marks only in a form and style which does not defame, disparage, dilute, place in a bad light, or otherwise injure RWS or any Affiliate thereof, or any owner, officer, director, or employee of RWS or any Affiliate thereof, including, but not limited to, using such IP Rights in a manner or in association with anything that would, in RWS’s sole discretion, be considered deceptive, indecent, scandalous, offensive, misleading, or otherwise inappropriate. MONTREIGN shall not engage in any action or conduct of business, including, without limitation any violation of Law that could, in RWS’s sole reasonable opinion, damage, defame, disparage, dilute, place in a bad light or otherwise injure RWS or any Affiliate thereof or the IP Rights.

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6.5 MONTREIGN shall not represent in any manner that it has any ownership interest in any Licensed Marks or any goodwill associated therewith.

6.6 (a) MONTREIGN agrees that it shall not apply for or seek to obtain trademark or service mark registrations, domain name registrations, or corporate names or any other property rights in any Licensed Marks, or any mark similar thereto without the prior written approval of RWS, and, upon request from RWS, MONTREIGN shall furnish to RWS any specimens, facsimiles, or materials for the purpose of submitting appropriate trademark or service mark applications or domain name registrations or corporate names therefor, in the name of RWS or any Affiliate thereof. MONTREIGN further agrees to ensure that their employees, officers, personnel, representatives or partners shall not use the words “Genting” “Resorts World” or “RW” whether alone or in combination with any words or in Chinese characters or other languages as its company name, domain name or part thereof without prior written approval of RWS. Upon written request from MONTREIGN, RWS may arrange to procure trademark or service mark registration, domain name registrations (subject to availability) or any other property rights in any Licensed Marks or any mark similar thereto used or developed by MONTREIGN in connection herewith; provided, however, if RWS unreasonably refuses to make, or cause to be made, any such application or protection requested by MONTREIGN, then MONTREIGN shall be entitled, on behalf of RWS or such party as directed by RWS and at the sole expense of RWS, apply for and seek to obtain trademark or service mark registration, domain name registrations (subject to availability) or any other property rights in any Licensed Marks or any mark similar thereto used or developed by MONTREIGN in connection herewith.

(b) Without prejudice to RWS’s obligations in clause 7.1.6 and clause 10.3 below, MONTREIGN shall be responsible to ensure, with the cooperation of RWS, that any approval, consent, registration and/or notification, including any Gaming Licenses, that may be required from, with or to any United States Government Authority (including any Gaming Authority in the state of New York), if any, in order to permit the parties to enter into this Agreement in connection with the Projects shall be duly obtained or undertaken at the sole expense of RWS.

6.7 In the event the Licensed Marks then used by MONTREIGN are intended to be abandoned or surrendered, RWS shall provide no less than ten (10) days written notice to MONTREIGN of such intention, in which case MONTREIGN shall be entitled to pursue registration of the Licensed Marks.

6.8 RWS may require MONTREIGN, at any time and from time to time, to undertake any reasonable corrective actions with respect to the style or appearance of any Licensed Mark, which has previously been approved (the “Existing Licensed Marks”), to conform such Licensed Mark to the then-current applicable Brand Manual with respect to the Licensed Marks (the “Revised Licensed Marks”); provided, however, RWS shall reimburse MONTREIGN for any expensed incurred in conforming its use of the Existing Licensed Marks to the Revised Licensed Marks. MONTREIGN shall promptly undertake any corrective actions so required by RWS, in a professional manner consistent with industry standards for the re-order and replacement of items impacted by this clause 6.8 (the “Impacted Marketing Material”), and MONTREIGN shall provide RWS with such evidence of compliance therewith as RWS may reasonably request. Notwithstanding the foregoing, Montreign shall be permitted to continue the use of Impacted Marketing Materials bearing the Existing Licensed Marks until such materials are exhausted (the “Marks Transition Period”). RWS acknowledges and agrees that, for purposes of this clause 6.8, MONTREIGN’s prior use of the Licensed Marks, as previously approved, and continued use during the aforementioned Marks Transition Period, shall not constitute a breach of this Agreement; provided, however, that MONTREIGN’s failure to undertake the corrective actions required by RWS in accordance with this clause 6.8 beyond the Marks Transition Period

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shall constitute a material breach of this Agreement. In addition, RWS may require MONTREIGN, at any time and from time to time, to undertake any reasonable corrective actions with respect to the form, use or presentation of any Licensed Mark, which has not previously been approved, to the extent that the form of any such Licensed Mark is not the same quality or form as the previously approved sample or such use or presentation is in violation of the license(s) granted in clause 2. MONTREIGN shall promptly undertake any corrective actions so required by RWS in a professional manner and shall provide RWS with such evidence of compliance therewith as RWS may reasonably request. In the event any corrective actions required by RWS pursuant to this clause 6.8 is expected to exceed $500,000 in any License Term (the “Expense Cap”), RWS and MONTREIGN shall mutually agree on the corrective actions to implement the Revised Licensed Marks and the expenses to be incurred in excess of the Expense Cap.

6.9 RWS shall have the right, upon written notice to MONTREIGN, to inspect the use of the Licensed Marks at the Projects during normal business hours, to ensure it is being operated in accordance with MONTREIGN’s covenants and undertakings contained in this Agreement. All such inspections shall be carried on so as not to unreasonably interfere with the conduct of MONTREIGN’s business, and, during visits to the Montreign, RWS or its agents shall comply with all of MONTREIGN ’s customary safety and security requirements. The costs of any such inspection shall be borne by RWS. Upon completion of each such inspection, RWS shall provide MONTREIGN with a written list of all deficiencies reasonably identified by RWS as violations of MONTREIGN’s covenants herein. MONTREIGN shall have five (5) Business Days in which to respond in writing to RWS setting forth its intentions: (i) with respect to any deficiency which by its nature is capable of immediate cure, that corrective action will be completed within fifteen (15) Business Days following receipt of RWS’s notice of deficiency, and MONTREIGN shall notify RWS in writing upon completion of such corrective action confirming that the deficiency has been corrected; or (ii) with respect to any other deficiency, that corrective action will be completed within thirty (30) Business Days following receipt of RWS’s notice of deficiency, and MONTREIGN shall notify RWS in writing upon completion of such corrective action confirming that the deficiency has been corrected. If, upon a subsequent inspection by RWS within thirty (30) Business Days of receipt of such written confirmation, RWS reasonably determines that MONTREIGN has failed to correct any of the deficiencies identified by RWS to RWS’s reasonable satisfaction, RWS shall be entitled to terminate this Agreement in accordance with clause 8.

6.10 MONTREIGN will create and provide RWS, within thirty (30) days after completion, copies of its annual marketing plans that will utilize the Licensed Marks, for the upcoming Fiscal Year. Notwithstanding the foregoing, in lieu of providing an annual marketing plan utilizing the Licensed Marks for the period prior to the Effective Date, MONTREIGN shall provide a “pre-opening marketing plan” utilizing the Licensed Marks for the period from the Commencement Date to the Effective Date.

6.11 MONTREIGN shall indemnify RWS and shall keep RWS fully indemnified against any claim, loss, damage, cost and/or expense arising from any unauthorised or improper use of the IP Rights or any use of the IP Rights by MONTREIGN in contravention of this Agreement except if such claim, loss, damage, cost and/or expense is caused by the negligence of or intentional misconduct by RWS, its agents, employees or Affiliates or by the failure of RWS to register, or cause to be registered, or maintain, or cause to be maintained, the registration of the Licensed Marks in accordance with clause 7.1.6, or to the extent any Licensed Marks infringe any third party rights to the Licensed Marks.

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6.12 For the avoidance of doubt, MONTREIGN acknowledges and agrees that any material breach of the provisions set forth in this clause 6 shall constitute a material breach of this Agreement.

7. Specific Undertakings

7.1 MONTREIGN or RWS, as specified below, hereby agrees that during the License Term:

7.1.1 MONTREIGN shall not attack any Licensed Marks, or any trade names, domain names or other IP Rights pertaining thereto in the United States of America or anywhere in the world, and MONTREIGN shall not (either directly or indirectly) aid or assist any person in so doing;

7.1.2 MONTREIGN shall not harm, misuse or bring into disrepute any IP Rights in the United States or anywhere in the world;

7.1.3 MONTREIGN shall use and exploit the IP Rights only in accordance with the terms and intent of this Agreement;

7.1.4 RWS and MONTREIGN shall each comply with all Laws relating or pertaining to the use or exploitation of the IP Rights or this Agreement;

7.1.5 MONTREIGN shall notify in writing RWS of any changes affecting the Gaming Licenses, and shall take all steps reasonably necessary to assist RWS in maintaining their continued compliance with the applicable Laws; and

7.1.6 RWS shall procure, or cause to be procured, the applications for registration and maintain the Licensed Marks in the relevant classes in the United States of America to enable MONTREIGN to use the Licensed Marks in accordance with this Agreement.

7.2 Infringement Claims

7.2.1 A Party shall promptly give notice in writing to the other Party in the event that it becomes aware of:

(a) any infringement or suspected infringement of the IP Rights by any third party; or

(b) any claim that any use by MONTREIGN of the IP Rights under this Agreement infringes the rights of any third party.

7.2.2 In the case of any matter falling within clause 7.2.1(a) above:

(a) RWS shall determine (in its absolute discretion) whether it or any of its other Affiliates will take any action in respect of such matter against any third party, and shall notify MONTREIGN of its decision in writing within fifteen (15) days of receiving the relevant notice pursuant to clause 7.2.1(a);

(b) if RWS notifies MONTREIGN of its decision to take action in respect of such matter, RWS or any of its other Affiliates shall have the sole right to institute infringement proceedings against the third party provided that it commences such proceedings within fifteen (15) days after the notice delivery under clause 7.2.1(a);

(c) if infringement proceedings is commenced within one hundred and twenty (120) days after the notice delivery under clause 7.2.l.(a):

(i) RWS or its Affiliates shall bear the entire cost associated with the conduct of any such action and shall be entitled to retain for themselves

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all damages, settlement fees or other amounts for past infringement received as a result of any such action; and

(ii) MONTREIGN (at the cost and expense of RWS) shall provide any assistance and co-operation reasonably requested by RWS in relation to any such action; and

(d) if RWS fails to notify MONTREIGN as to whether any action will be taken within the thirty (30) day period referred to in clause 7.2.1(a), or notifies MONTREIGN that no action will be taken or failure of commencement of infringement proceedings within one hundred and twenty (120) days after the notice delivery under clause 7.2.1(a), then:

1. MONTREIGN may (in its absolute discretion) elect to commence infringement proceedings against the third party, provided that RWS has consented or procured the consent to MONTREIGN commencing such proceedings;

2. MONTREIGN shall bear the entire cost associated with the conduct of any such action and shall be entitled to retain for itself all damages, settlement fees or other amounts for part infringement as a result of any such action; and

3. RWS shall (at the cost and expense of MONTREIGN ) provide, or cause to be provided, any assistance and co-operation reasonably requested by MONTREIGN in relation to any such action taken by MONTREIGN , including by joining as a party or using reasonable efforts to procure the relevant party to join as a party to such infringement action.

7.2.3 In the case of any matter falling within clause 7.2.1(b) above:

(a) RWS will, at its own expense, defend, indemnify and hold MONTREIGN harmless in any third party action brought against MONTREIGN to the extent that is based on the claim that all or part of the License or any of the rights granted hereunder infringes on any valid United States patent, copyright or trademark, provided MONTREIGN has promptly notified RWS in writing of such claims. RWS shall direct and control the investigation and defense of such claim, with the participation of MONTREIGN. In no event shall RWS settle a claim without the approval of MONTREIGN if such settlement (i) requires MONTREIGN or any Affiliate to make payment for the claim or (ii) is adverse, in the reasonable opinion of MONTREIGN, to the interests of MONTREIGN. The indemnity provided by RWS under this clause 7.2.3(a) shall not exceed the License Fee paid to RWS in the preceding six (6) License Terms.

(b) MONTREIGN shall not settle or compromise any such claim, or make any admission in relation to such claim, without the prior written consent of RWS, which consent may not be unreasonably withheld, delayed or denied;

(c) RWS shall determine (in its absolute discretion) what action, if any, shall be taken in respect of such matter, and shall have sole control of the conduct of any such action; and

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(d) MONTREIGN shall provide, and shall procure that its respective sub-licensees (to the extent that RWS has consented to any pursuant to clause 5.3), provide, any assistance and co-operation reasonably requested by RWS in relation to any action taken by RWS under clause 7.2.3(b).

7.2.4 At the sole cost and expense of RWS, MONTREIGN agrees to assist RWS and/or RWS’s Affiliates in any action taken (including without limitation any legal proceedings) to protect or defend any of RWS’s and/or its Affiliates’ rights to or interests in the IP Rights. RWS and/or its Affiliates may conduct or counterclaim or commence or prosecute any claims or lawsuits in their name or in the name of MONTREIGN or join MONTREIGN as a party thereto.

8. Early Termination

8.1 Upon the occurrence of any of the following, this Agreement may be terminated:

8.1.1 by RWS, if MONTREIGN breaches any material provision of this Agreement and such breach is (i) incapable of cure, including, without limitation, breach of clauses 5 and 10 or (ii) capable of cure, but not cured within thirty (30) days of MONTREIGN ’s receipt of written notice of such default from RWS;

8.1.2     by MONTREIGN, if RWS breaches any material provision of this Agreement and such breach is (i) incapable of cure or (ii) capable of cure, but not cured within thirty (30) days of RWS’s receipt of written notice of such default from MONTREIGN;

8.1.3     by RWS, in the event that RWS determines, in its sole and absolute discretion, that the manner of conduct of Gaming Operations by MONTREIGN impairs or jeopardizes in any manner the value of the IP Rights.

8.1.4     by RWS, in the event that any action or non-action by MONTREIGN jeopardizes or threatens to materially jeopardize the standing of RWS in its presently or future conducted business;

8.1.5     by MONTREIGN , in the event that any action or inaction by RWS jeopardizes or threatens to materially jeopardize the standing of MONTREIGN with respect to its obligations as a regulated gaming operator;

8.1.6     by RWS or MONTREIGN if the use of the IP Rights in the United States of America or in respect of MONTREIGN or any part thereof is not permitted by any Government Authority or by Law or by any court proceedings; or

8.1.7     by either MONTREIGN or RWS, at its sole discretion, immediately upon written notice to the other Party upon (a) the institution by such other Party of proceedings under any applicable Law for the relief of debtors wherein such other Party is seeking relief as a debtor, (b) a general assignment by such other Party for the benefit of creditors, (c) the institution by such other Party of a proceeding for relief under any insolvency law, (d) the institution against such other Party of a proceeding under any insolvency law, which proceeding is not dismissed, stayed or discharged within 60 days after the filing thereof or, if stayed, which stay is thereafter lifted without a contemporaneous discharge or dismissal of such proceeding, (e) the admission by such other Party in writing of its inability to pay its debts as they mature, or (f) the attachment, execution or other judicial seizure of all or any substantial part of such other Party’s assets which remains undismissed or undischarged for a period of sixty (60) days after the levy

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thereof, if such attachment, execution or other judicial seizure would reasonably be expected to have a material adverse effect upon the performance by such other Party of its obligations under this Agreement; provided, however, that any such attachment, execution or seizure shall not give rise to a Party’s right to terminate hereunder if such other Party posts a bond sufficient to fully satisfy the amount of such claim or judgment within sixty (60) days after the levy thereof and such other Party’s assets are thereby released from the lien of such attachment;

8.1.8     by RWS or Montreign, immediately upon written notice to the other if (a) RWS, MONTREIGN or any of their respective Affiliates, is directed to cease doing business with RWS, MONTREIGN or any of their respective Affiliates, as applicable, by any Governmental Authority (including, for the avoidance of doubt, any gaming regulatory authority), or (b) RWS or MONTREIGN, in its respective sole and exclusive judgment, if RWS or MONTREIGN, as applicable, reasonably determines that RWS, MONTREIGN or any of their respective Affiliates, as applicable, was, is, or is about to be engaged in any activity or relationship, which could or does threaten, or cause the denial, suspension, or revocation of, the Gaming Licenses or RWS, MONTREIGN or any of the respective Affiliates, if any, issued by, any gaming regulatory authority in any jurisdiction in the world; provided, however, that if, and only to the extent that, RWS, MONTREIGN or any of their respective Affiliates are permitted by an applicable gaming regulatory authority, without jeopardizing in any manner the regulatory good standing with such authority of RWS, MONTREIGN or their respective Affiliates, as applicable, to provide RWS or MONTREIGN, as applicable, with an opportunity to cure or otherwise resolve any of the foregoing issues, RWS or MONTREIGN, as applicable, shall, or shall cause any respective Affiliate to provide, RWS or MONTREIGN, as applicable, with notice thereof and such opportunity to resolve such issues, as permitted by such applicable gaming regulatory authority, prior to terminating this Agreement pursuant to this clause;

8.1.9 by RWS, if MONTREIGN or its Affiliate or holding company or its ultimate holding company (i) contests or challenges RWS’s right to use the IP Rights or any part thereof; (ii) takes or fails to take any action that prevents the registration or continuing registration of any IP Rights (insofar as it is or may be registered), (iii) opposes any application by RWS to register the Licensed Marks in the United States of America or anywhere in the world, or (iv) disputes, denies or challenges the validity or enforceability of the IP Rights in the United States of America or anywhere in the world;

8.1.10 with respect to the Genting IP only, in the event that RWS does not have the right to license the Genting IP to MONTREIGN for any reason whatsoever (such termination to take effect automatically upon receipt of notice by MONTREIGN from RWS specifying the same and such notice to be provided promptly by RWS);

8.1.11 with respect to the Resorts World IP only, RWS does not have the right to license the Resorts World IP to MONTREIGN for any reason whatsoever (such termination to take effect automatically upon receipt of notice by MONTREIGN from RWS specifying the same and such notice to be provided promptly by RWS);

8.1.12 by either RWS or MONTREIGN , in accordance with clause 11.3;

8.1.13 by RWS, but only in respect of the licenses for a particular country within the Territories (hereinafter called the "Affected Territory"), if the use of the IP Rights in the Affected Territory is not permitted by any Government Authority or by Law;

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8.1.14 by both Parties upon their mutual written agreement;

8.1.15 by MONTREIGN upon twelve (12) months’ prior notice;

8.1.16 automatically, if RWS no longer has the right to license both the Genting IP and the Resorts World IP to MONTREIGN; or

8.1.17 automatically, if the Licensed Marks become expired or invalid.

8.2 Upon termination of this Agreement by any Party pursuant to clause 8.1 or 8.3 hereof, the rights granted hereunder shall immediately terminate, except as provided in clause 11.14; provided, however, that except for termination by RWS pursuant to clauses 8.1.6, 8.1.8, 8.1.9, 8.1.10 or 8.1.11 hereof, or unless otherwise required by applicable Law, or mandated by any Governmental Authority, or unless such continued use by MONTREIGN would pose immediate and irreparable harm to the value of the Licensed Marks, then MONTREIGN shall be permitted to use the Licensed Marks, in accordance with this Agreement, for a period of twelve (12) months (the “Early Termination Transition Period”), in which to re-brand anything it owns or controls associated with such Licensed Marks (including all of its operations, services, facilities, inventory, signage, domain names, marketing materials, packaging) to trademarks and service marks other than the Licensed Marks. During such Early Termination Transition Period, the obligations of MONTREIGN with regard to use of the Licensed Marks set forth in this Agreement shall continue to apply and MONTREIGN shall continue pay to RWS the License Fee in accordance with clause 4. Notwithstanding the foregoing, with respect to a termination pursuant to clause 8.1.2, 8.1.8, 8.1.13 or 8.1.16, the obligation to pay the License Fee shall terminate immediately, save that this clause shall not affect payment of any License Fee incurred prior to termination.

8.3 In the event that this Agreement is terminated only with respect to the Genting IP or Resorts World IP pursuant to clauses 8.1.10 or 8.1.11 above (as applicable), MONTREIGN shall have the option (to be exercised by notice in writing to RWS within thirty (30) days of receipt of the notice referred to in clauses 8.1.10 or 8.1.11 (as applicable) to either (i) terminate this Agreement in its entirety (with respect to both Genting IP and Resorts World IP) or (ii) elect to continue with this Agreement with respect only to the IP Rights in respect of which this Agreement has not been terminated (in which event all terms and conditions of this Agreement (save for the License Fee which is dealt with below) shall continue to apply, mutatis mutandis).

9. Confidentiality and Publicity

9.1 The Parties hereby severally undertake to treat Confidential Information (as defined below) that is provided to it by or on behalf of the other Party (the Party receiving such Confidential Information is hereinafter called the “Receiving Party”; and the Party providing or on whose behalf such Confidential Information is provided is hereinafter called the “Disclosing Party”) as follows:

9.1.1 the Receiving Party shall keep all such Confidential Information confidential, except as provided in Clause 9.3 and shall use such Confidential Information solely for purposes in connection with this Agreement;

9.1.2 the Receiving Party shall restrict access to the Confidential Information to its officers, employees, agents, representatives and professional advisers whose access is reasonably necessary in connection with this Agreement; it being understood, that in the case of such disclosure, it shall ensure that such officers, employees and

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representatives shall not disclose or use such Confidential Information for any purpose other than the fulfillment of this Agreement; and

9.1.3 upon termination of this Agreement or any license granted herein, the Receiving Party shall return or destroy all such Confidential Information and any copies thereof, as required by the Disclosing Party.

9.2 “Confidential Information” of any Disclosing Party means all information including know how provided by or on behalf of such Disclosing Party pursuant to or in connection with this Agreement, including, without limitation, marketing plans and Marketing Materials, whether before, on or after the date of this Agreement; provided, that Confidential Information shall not include information that (a) is, or becomes, publicly known or available other than through an act of the Receiving Party; (b) is in the possession of the Receiving Party prior to receipt from such Disclosing Party; or (c) was or has become known to such Receiving Party independent of any disclosure by such Disclosing Party and which has not been wrongfully disclosed to or obtained by such Receiving Party.

9.3 Notwithstanding anything in Clause 9.1 to the contrary, the Receiving Party may disclose Confidential Information to the extent necessary for the purpose of:

9.3.1 complying with a court or administrative order, law or regulation, or applicable rules of a stock exchange on which shares of the Receiving Party or their respective holding company are listed and/or traded; provided, that the Receiving Party shall furnish only such portion of the Confidential Information which is legally required to be provided or otherwise required by any regulatory authority to be disclosed and shall exercise all reasonable efforts to obtain assurances that confidential treatment shall be accorded to such information and shall give notice to the Disclosing Party as promptly as practicable of the Receiving Party’s obligation to disclose any such information; and

9.3.2 any litigation or arbitration arising out of or related to this Agreement.

9.4 The terms and conditions set forth in this Agreement are confidential and save as permitted under clauses 9.3 or as otherwise required by a Governmental Entity, no public announcements or disclosures may be made without the consultation and consent of the other Party; provided, however, RWS acknowledges and agrees the Agreement (with clauses 4.1 and 4.2 redacted if allowed by the Securities and Exchange Commission (“the Commission”) shall be filed as an exhibit to the reports filed with the Commission by Empire Resorts, Inc. (“Empire”), the ultimately parent entity of Montreign.

9.5 The confidentiality obligations in this clause 9 shall continue to apply for three (3) years after the termination of this Agreement save in respect of any information with respect to the IP Rights where the confidentiality obligations shall survive without limitation of time.

10. Representations, Warranties and Covenants

10.1 RWS hereby represents and warrants to MONTREIGN as follows:-

10.1.1 RWS is a company duly registered under the applicable laws of the Republic of Singapore;

10.1.2 RWS has (i) all necessary power, right and authority to execute and deliver, perform its obligations under, and consummate the transactions contemplated by, this Agreement, and (ii) taken all necessary corporate action under all applicable Law to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby;

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10.1.3 The execution, delivery, and performance of RWS under this Agreement will not violate, conflict with, or cause a default or any acceleration of performance under any agreement or other instrument to which RWS is a party or is otherwise bound; and

10.1.4 This Agreement will constitute a legal, valid and binding obligations of RWS and will be enforceable against RWS in accordance with its terms upon its execution.

10.2 MONTREIGN hereby represents and warrants to RWS as follows:-

10.2.1 MONTREIGN is a limited liability company formed under the applicable laws of the State of New York;

10.2.2 MONTREIGN has (i) all necessary power, right and authority to execute and deliver, perform its obligations under, and consummate the transactions contemplated by, this Agreement, and (ii) taken all necessary corporate action under all applicable Law to authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby;

10.2.3 The execution, delivery, and performance of MONTREIGN under this Agreement will not violate, conflict with, or cause a default or any acceleration of performance under any agreement or other instrument to which MONTREIGN is a party or is otherwise bound; and

10.3 Agreement Relating to the Approval by Governmental Authorities. RWS acknowledges that MONTREIGN and its Affiliates are businesses that are or may be subject to and exist because of privileged licenses (including liquor licenses) issued by U.S., state, local and foreign governmental, regulatory and administrative authorities, agencies, boards and officials (collectively, the “Gaming Authorities”) responsible for or involved in the administration of application of laws relating to gaming or gaming activities or the sale, distribution and possession of alcoholic beverages. The Gaming Authorities and/or MONTREIGN may deem it advisable to perform background checks on, and issue approvals of, persons involved with MONTREIGN and its Affiliates. Prior to the execution of this Agreement and, in any event, prior to the payment of any monies by MONTREIGN to RWS: (i) at the written request of MONTREIGN for the purposes of obtaining the relevant approvals of the Gaming Authorities, as set forth in § 1326 of the Upstate New York Gaming and Economic Development Act and the regulations promulgated thereunder, RWS shall cooperate with and provide to the Gaming Authorities and/or MONTREIGN written disclosure regarding RWS, their Affiliates and the directors, officers and members of RWS or any of its Affiliates (the “RWS Associates”); and (ii) to the extent required, the Gaming Authorities shall have issued approvals of the RWS Associates. RWS shall, at its sole expense, bear all costs (including license fees) incurred by RWS and the RWS Associates in relation to any gaming qualifications or registrations with, findings of suitability of, or licenses issued by the Gaming Authorities.

10.3.1 At the written request of MONTREIGN for the purposes of the approvals of the Gaming Authorities, RWS shall cause all of the relevant RWS Associates for which information is required to be provided pursuant to the Gaming Laws or for which the Gaming Authorities or another Governmental Authority has requested information to provide all information requested from time to time by MONTREIGN and apply for and obtain all necessary approvals required or requested by MONTREIGN and/or the Gaming Authorities.  If any RWS Associate fails to satisfy  such requirement, and if MONTREIGN or any of MONTREIGN’s Affiliates are directed to cease business with any RWS Associate by any Gaming Authority or if MONTREIGN shall determine (in

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its sole and exclusive judgment, reasonably determined) that any RWS Associate is an Unsuitable Person, whether as a result of ownership of RWS or otherwise, then:  (i) RWS shall terminate any relationship with the person who is the source of such issue; (ii) RWS shall cease the activity or relationship creating the issue to MONTREIGN’s satisfaction (in its sole and exclusive judgment, reasonably determined); or (iii) if such activity or relationship is not subject to cure as set forth in the foregoing clauses (i) and (ii), as determined by MONTREIGN in its reasonable discretion, MONTREIGN shall, without prejudice to any other rights or remedies of MONTREIGN including at law or in equity, have the option to immediately terminate this Agreement and its relationship with RWS, including, without limitation, the payment of the License Fee.  RWS further acknowledges that MONTREIGN shall have the absolute right to terminate this Agreement in the event any Gaming Authority or the Regulatory Compliance Committee of the Board of Directors of Montreign requires MONTREIGN or any of its Affiliates to do so. MONTREIGN’s Compliance Committee request to terminate this Agreement must be based on any or more of the foregoing grounds set out in this clause 10.3 and such grounds shall be provided in writing to RWS. For the avoidance of doubt, no fees shall be payable by MONTREIGN to RWS in connection with termination of this Agreement pursuant to this clause 10.3 save for any antecedent License Fee incurred by MONTREIGN for the period prior to termination of this Agreement. The Parties agree that RWS shall not be responsible for any costs and expenses incurred by MONTREIGN, including marketing costs, arising from the termination of this Agreement under and pursuant to this clause 10.3.

10.4 Limitation of Liability

10.4.1 Nothing in this Agreement excludes or limits any Party's liability:

(i) for fraud; or

(ii) for death or personal injury caused by its negligence; or

(iii) under any indemnity given under this Agreement; or

(iv) for breach of clause 9; or

(v) to the extent that any Law precludes or prohibits any exclusion or limitation of liability; or

(vi) intentional misconduct.

10.4.2 Subject to clause 10.4.1, no Party will be liable for special, incidental or consequential damages arising out of or relating to this Agreement or the exercise of its rights under this Agreement, or for lost profits, anticipated profits, lost goodwill, lost revenue, lost production, lost contracts or lost opportunity, arising from or relating to this Agreement, whether arising in contract, tort, negligence or otherwise regardless of any notice of such damages.

11. Miscellaneous

11.1 Governing Law and Arbitration

11.1.1 This Agreement and any non-contractual obligations arising out if or in connection with it shall be governed by and construed in all respects in accordance with the laws of New York.

11.1.2 The Parties shall endeavour to amicably resolve all differences and disputes, falling which all disputes will be referred to arbitration to be held in Singapore under the rules of SIAC, with one (1) arbitrator to be agreed between the Parties or failing such agreement, then as may be appointed in accordance with SIAC rules. The language of the arbitration shall be English. The arbitrator’s award shall be final and binding and the Parties hereby waive all rights of appeal or objection in any jurisdiction.

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11.2 Entire Agreement

11.2.1 This Agreement and the documents referred to in it contain the whole agreement between the Parties relating to the transactions and licenses contemplated by this Agreement and supersedes all previous agreements between the Parties relating to these transactions. Except as required by statute, no terms shall be implied (by custom, usage or otherwise) into this Agreement.

11.2.2 Each Party acknowledges that, in agreeing to enter into this Agreement, it has not relied on any express or implied representation, warranty, collateral contract or other assurance (except those set out in this Agreement and the documents referred to in it) made by or on behalf of the other Party at any time before the date of this Agreement. Each Party waives all rights and remedies which, but for this clause 11.2.2, might otherwise be available to it in respect of any such representation, warranty, collateral contract or other assurance.

11.2.3 Nothing in clauses 11.2.1 or 11.2.2 limits or excludes any liability for fraud.

11.3 Severability

11.3.1 Whenever possible, each provision of this Agreement, and any other statement, instrument or transaction contemplated hereby or relating hereto, shall be interpreted in such manner as to be effective and valid under such applicable Law, but, if any provision of this Agreement or any other statement, instrument or transaction contemplated hereby or relating hereto shall be held to be prohibited or invalid under such applicable Law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement or any other statement, instrument or transaction contemplated hereby or relating hereto.

11.3.2 The Parties shall endeavor in good faith negotiations to replace any invalid, illegal or unenforceable provisions with a valid provision the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provision. If, however, any material part of a Party’s rights under this Agreement shall be declared invalid or unenforceable (specifically including RWS’s right to receive the License Fee), and the Parties are unable to negotiate a valid provision pursuant to this clause the Party whose rights have been declared invalid or unenforceable shall have the option to terminate this Agreement upon thirty (30) days written notice to the other Parties, without liability on the part of the terminating Party.

11.4 Notices

11.4.1 All notices or demand given or made under this Agreement shall be in writing and delivered or sent to the addressee at its address or facsimile number set out below (or such other address or facsimile number as the addressee has by five (5) Business Days’ prior written notice specified to the other):

RWS:        RW Services Pte Ltd.

1A Duxton Hill #02-02

Singapore 089587

Attention: VP-Head of Licensing & Global Rewards

Email:mcong@rwgenting.com        

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MONTREIGN:    Montreign Operating Company, LLC

c/o Monticello Casino and Raceway

204 State Route 17B

P.O. Box 5013

Monticello, NY 12701

Attention: Nanette L. Horner, Esq.

Email: nhorner@empireresorts.com

11.4.2 Any notice or document shall be deemed to be given:

(a) if delivered in person, at the time of delivery if delivered before 3.00 p.m. (in the time zone of the recipient) on any Business Day, and in any other case, on the Business Day following the date of that delivery; or

(b) if sent by post, at 10.00 a.m. (in the time zone of the recipient) on the second Business Day after it was put into the post, if sent within the jurisdiction, or at 10.00 a.m. (in the time zone of the recipient) on the fifth Business Day after it was put into the post, if sent by airmail; or

(c) if sent by fax, on the date of transmission if transmitted before 3.00 p.m. (in the time zone of the recipient) on any Business Day, and in any other case on the next Business Day following the date of transmission.

11.4.3 In proving service of a notice or document, it shall be sufficient to prove that delivery was made or that the envelope containing the notice or communication was properly addressed and posted or that the fax was properly addressed and transmitted.

11.4.4 The Parties agree that the provisions of this clause shall not apply to the service of any writ, summons, order, judgment or other document relating to or in connection with any legal proceedings, suit or action arising out of or in connection with this Agreement (but excluding, for the avoidance of doubt, any arbitral proceedings).

11.4.5 Invoices for the License Fee or for any other sums payable by MONTREIGN to RWS under this Agreement may be sent by electronic mail to the email address stated in clause 11.4.1 above or such other email address as MONTREIGN has by five (5) Business Days’ prior written notice specified to RWS and shall be deemed to be given on the date of transmission if transmitted before 3.00 p.m. (in the time zone of the recipient) on any Business Day, and in any other case on the next Business Day following the date of transmission.

11.5 Expenses

Each Party shall bear its own costs and expenses for preparing and executing this Agreement.

11.6 Successors and Assigns

This Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of each of the Parties.

11.7 No Waiver

11.7.1 The rights of each Party under this Agreement:

(a) may be exercised as often as necessary;

(b) are cumulative and not exclusive of rights or remedies provided by law; and

(c) may be waived only in writing and specifically.

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11.7.2 Any delay in the exercise or non-exercise of any right is not a waiver of that right.

11.8 Good Faith

The Parties undertakes with each other to do all things reasonably within their power which are necessary or desirable to give effect to the spirit and intent of this Agreement.

11.9 Counterparts

This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Agreement and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original Agreement for all purposes. Signatures of the Parties transmitted by facsimile shall be deemed to be their original signatures for all purposes.

11.10 Assignment

11.10.1 RWS and MONTREIGN may not assign or transfer this Agreement or any of their respective rights or obligations arising under this Agreement, in whole or in part, without the prior written consent of the other Party, except that RWS shall have the right to assign or transfer this Agreement and any of its rights and obligations hereunder to (i) any Affiliate of RWS; or (ii) with Montreign’s prior written consent, to any persons in connection with a solvent reorganization of RWS’s IP Rights.

11.10.2 Except as permitted by the first sentence of clause 11.10.1, any attempted assignment or transfer by either Party of this Agreement or any of its rights or obligations arising under this Agreement without the prior written consent of the other Party shall be of no force or effect.

11.10.3 No assignment or transfer authorized hereunder shall be effective until all necessary governmental approvals have been obtained.

11.11 No Partnership or Agency

Nothing in this Agreement shall be deemed to constitute a partnership or joint venture between any of the Parties, nor constitute any Party as the agent of any other Party for any purpose.

11.12 Amendments

Any amendment of this Agreement shall not be binding on the Parties unless set out in writing, expressed to amend this Agreement and signed by authorised representatives of each of the Parties.

11.13 Third Party Rights.

A person who is not a Party to this Agreement shall have no rights to enforce any of its terms.

11.14 Survival

Expiration or early termination of this Agreement shall not relieve any Party of its obligations incurred prior to such expiration or early termination. Those Clauses which by their nature would survive the termination of this Agreement shall so survive. Without limiting the generality of the aforesaid, clauses 4 (solely for post-termination true up), 5, 6.6(a), 6.11, 7.2.4, 8.2, 9, 10.4, 11.1, 11.13 and 11.14 shall

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IRS Employer Identification No. 13-3714474

Confidential treatment requested with respect to certain portions hereof denoted with “[***]”

survive expiration or early termination of this Agreement in perpetuity or for such shorter period of time as may be indicated in any such clause.

11.15 Further Assurances

Each Party undertakes to execute all documents that may be reasonably necessary to give full effect to this Agreement.

11.16 Applicable Laws. Notwithstanding anything to the contrary in this Agreement, Montreign’s rights and obligations pursuant to this Agreement, and its performance of the transactions contemplated hereby, are subject to and governed by the all laws, rules and regulations applicable to, (i) Montreign’ s Gaming Operations at the Property and (ii) the fiduciary duties of the Boards of Directors of Montreign and Empire and the majority stockholder of Empire.

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IN WITNESS WHEREOF the Parties hereto have set their respective hands the day and year first above written:

Signed

For RW Services Ptd Ltd.

By its authorised signatory in the presence of:

/s/ Miki Ong Ming Chee/s/ Lim Chee Heong

Witness    Authorised Signatory

Miki Ong Ming CheeLim Chee Heong

Name    Name

VP – Head of Licensing and Global RewardsChief Operating Officer

Designation    Designation

Signed

For Montreign Operating Company, LLC

By its authorised signatory in the presence of:

/s/ Emanuel R. Pearlman/s/ Joseph A. D’Amato

Witness    Authorised Signatory

Emanuel R. PearlmanJoseph A. D’Amato

Name    Name

Chairman, Board of ManagersChief Executive Officer

Designation    Designation

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, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 4, 2017	/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, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: May 4, 2017	/s/ Laurette J. Pitts
	Laurette J. Pitts
	Executive Vice President, 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 March 31, 2017 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: May 4, 2017
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 signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to Empire Resorts, Inc. and will be retained by Empire Resorts, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

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

In connection with the Quarterly Report of Empire Resorts, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), I, Laurette J. Pitts, Executive Vice President, Chief Operating Officer and 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: May 4, 2017
By:	/s/ Laurette J. Pitts
	Laurette J. Pitts
	Executive Vice President, 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.

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 30, 2017
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Entity Registrant Name	EMPIRE RESORTS INC
Entity Central Index Key	0000906780
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		31,176,869

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 7,808	$ 11,012
Restricted cash	1,058	1,078
Accounts receivable, net	763	921
Prepaid expenses and other current assets	3,927	4,335
Total current assets	13,556	17,346
Property and equipment, net	27,252	26,415
Capitalized Development Projects costs	254,494	202,438
Cash for Development Projects	393,353	26,384
Intangible asset	51,000	51,000
Cash collateral for deposit bond	15,000	15,000
Other assets	584	1,175
Total assets	755,239	339,758
Current liabilities:
Accounts payable	3,123	2,268
Project Development Costs	45,659	41,933
Accrued expenses and other current liabilities	8,507	7,347
Total current liabilities	57,289	51,548
Long-term loan (related party), net of debt issuance costs	32,735	0
Other long-term liabilities	9,271	8,644
Total liabilities	486,311	60,192
Stockholders’ equity:
Common stock	312	312
Additional paid-in capital	534,749	533,813
Accumulated Other Comprehensive Income (Loss), Net of Tax	(91)	0
Accumulated deficit	(266,042)	(254,559)
Total stockholders’ equity	268,928	279,566
Total liabilities and stockholders’ equity	755,239	339,758
Series B
Stockholders’ equity:
Preferred stock	0	0
Series E
Current liabilities:
Term B Loan, net of debt issuance costs	$ 387,016	$ 0

XML

Consolidated Balance Sheets (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	150,000,000	150,000,000
Common stock, shares issued (shares)	31,177,000	31,156,000
Common stock, shares outstanding (shares)	31,177,000	31,156,000
Series B
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, per share liquidation value (usd per share)	$ 29	$ 29
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (shares)	44,000	44,000
Preferred stock, shares outstanding (in shares)	44,258	44,258

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenues:
Gaming	$ 12,893	$ 14,522
Food, beverage, racing and other	2,228	2,751
Gross revenues	15,121	17,273
Less: Promotional allowances	(352)	(1,068)
Net revenues	14,769	16,205
Operating costs and expenses:
Gaming	9,860	10,801
Food, beverage, racing and other	2,368	2,597
Selling, general and administrative	3,689	3,597
Development Projects expenses	4,269	3,067
Stock-based compensation	603	571
Depreciation	336	336
Total operating costs and expenses	21,125	20,969
Loss from operations	(6,356)	(4,764)
Amortization of debt issuance costs	(1,274)	(2)
Interest expense	(4,275)	(411)
Investment Income, Interest	454	0
Net loss	(11,451)	(5,177)
Dividends on preferred stock	(42)	(42)
Net loss applicable to common stockholders	$ (11,493)	$ (5,219)
Weighted average common shares outstanding, basic (shares)	31,003	20,125
Weighted average common shares outstanding, diluted (shares)	31,003	20,125
Loss per common share, basic (usd per share)	$ (0.37)	$ (0.26)
Loss per common share, diluted (usd per share)	$ (0.37)	$ (0.26)

XML

Condensed Consolidated Statement of Comprehensive Income (Loss) Condensed Consolidated Statement of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (11,451)	$ (5,177)
Unrealized loss on Interest Rate Cap	(91)	0
Comprehensive loss	$ (11,542)	$ (5,177)

XML

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Cash flows provided by (used in) operating activities:
Net loss	$ (11,451,000)	$ (5,177,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	336,000	336,000
Amortization Of Deferred Project Costs	1,274,000	2,000
Non-cash interest expense	727,000	231,000
Stock-based compensation	603,000	571,000
Changes in operating assets and liabilities:
Restricted cash—NYSGC Lottery and Purse Accounts	(17,000)	424,000
Accounts receivable	158,000	188,000
Prepaid expenses and other current assets	408,000	(1,382,000)
Other assets	0	(4,000)
Accounts payable	855,000	912,000
Accrued expenses and other current liabilities	2,388,000	(8,289,000)
Net cash used in operating activities	(4,719,000)	(12,188,000)
Cash flows provided by (used in) investing activities:
Purchase of property and equipment	(1,172,000)	(28,000)
Capitalized Development Projects costs	(48,329,000)	(15,268,000)
Cash collateral for deposit bond	0	15,000,000
License fee payment for the casino project	0	(51,000,000)
Restricted cash—racing capital improvement	(366,969,000)	(155,222,000)
Other	(5,000)	0
Net cash used in investing activities	(416,428,000)	(236,493,000)
Cash flows provided by (used in) financing activities:
Proceeds from Issuance of Long-term Debt	415,000,000	0
Proceeds from Related Party Debt	32,000,000	0
Payment of Debt Issuance Cost and Interest Rate Cap Fees	(28,750,000)	0
Proceeds from January 2016 Rights Offering, net of expenses	0	286,032,000
Series B Preferred Stock dividend payment	(32,000)	(167,000)
Series E Preferred Stock and dividend redemption	0	(30,711,000)
Other payments	(275,000)	0
Net cash provided by financing activities	417,943,000	255,154,000
Net (decrease) / increase in cash and cash equivalents	(3,204,000)	6,473,000
Cash and cash equivalents, beginning of period	11,012,000	6,412,000
Cash and cash equivalents, end of period	7,808,000	12,885,000
Supplemental disclosures of cash flow information:
Cash paid for interest	0	231,000
Non-cash investing and financing activities:
Accrued Development Projects costs	45,659,000	25,925,000
Racing Capital Improvements [Member]
Cash flows provided by (used in) investing activities:
Restricted cash—racing capital improvement	$ 37,000	$ 25,000

XML

Organization And Nature Of Business

3 Months Ended

Mar. 31, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Nature Of Business

Organization and Nature of Business

Basis for Presentation

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

The condensed consolidated financial statements and notes as of March 31, 2017 and December 31, 2016 and for the three months ended March 31, 2017 and March 31, 2016 include the accounts of Empire and its subsidiaries. All intercompany balances and transactions are eliminated in consolidation.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared under the rules and regulations of the Securities and Exchange Commission ("SEC") applicable for interim periods, and therefore do not include all information necessary for complete financial statements in conformity with accounting principles generally accepted in the United States (“U.S. GAAP”). Our financial statements require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, as well as the disclosure of contingent liabilities. Actual amounts could differ from those estimates. These condensed consolidated financial statements reflect all adjustments (consisting primarily of normal recurring accruals) which are, in the Company’s opinion, necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods. These condensed consolidated financial statements and notes should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016. The results of operations for our interim periods may not be necessarily indicative of the results of operations that may by achieved for the entire year.

Liquidity and Capital Resources

The accompanying condensed 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, as well as the net proceeds of the Term Loan Facility, the Kien Huat Montreign Loan (each as defined below) and the $35 million required to be deposited into the lender-controlled account created under the Term Loan Facility, which are discussed below, will be sufficient to meet working capital requirements and the expected costs of the Development Projects (defined below) for at least the next 12 months. Additionally, following the opening of the casino project (the "Casino Project") to the public, which is expected to occur in March 2018, the Revolving Credit Facility (defined below) will be available for use towards the working capital needs, capital expenditures and for other general corporate purposes of the Project Parties (defined below), subject to our ability to meet the conditions therein. Whether these resources are adequate to meet the Company’s liquidity needs beyond that period, including with respect to the costs of the entertainment village project (the "Entertainment Village Project") and the golf course project (the "Golf Course Project" and, together with the Casino Project and Entertainment Village Project, the "Development Projects") , will depend on the Company’s growth and operating results and the final designs and progress of the Development Projects. In addition, cost overruns, delays in the construction schedule or changes in design are among the factors that may increase the projected costs of the Development Projects, which may also require us to raise additional capital. Pursuant to the Term Loan Facility, Montreign Operating is required to deposit $35 million into the lender-controlled account holding the net proceeds of the Term Loan Facility and the Kien Huat Montreign Loan, which amount will be used towards the Entertainment Village Project. Of this payment, $15 million is required to be deposited by June 30, 2017, and the remaining $20 million is required to be deposited by December 31, 2017. The $35 million must be funded in the form of a further equity contribution to Montreign Operating, for which the Company expects to raise additional debt or equity capital by the dates on which the deposits must be made. Additionally, the Company expects to raise furniture, fixtures and equipment ("FF&E") financing of up to $40 million to complete the Development Projects. To raise additional capital necessary for the Development Projects, to meet obligations under the Term Loan Facility or for the general corporate purposes of the Company, we may seek to enter into strategic agreements, joint ventures or similar agreements or we may sell additional debt or equity in public or private transactions, including pursuant to the commitment of Kien Huat to backstop a rights offering of Empire in the amount of $35 million. The sale of additional equity could result in additional dilution to the Company’s existing stockholders, and financing arrangements may not be available to us, or may not be available in necessary amounts or on acceptable terms.

As of March 31, 2017, we had total current assets of approximately $13.6 million and total current liabilities of approximately $57.3 million, which includes approximately $45.7 million in accrued Development Projects costs. As of March 31, 2017, our total assets included approximately $393.4 million of remaining net proceeds from the Term Loan Facility (as defined and discussed below), which will be used to pay the accrued Development Projects costs included in our current liabilities. The net proceeds from the Term Loan Facility, which are being used to pay the costs of the Development Projects, are presented on the Condensed Consolidated Balance Sheet as Cash for Development Projects.

We have had continuing net losses and negative cash flow from operating activities, including a loss from operations of $6.4 million for the three months ended March 31, 2017. The net loss for the three months ended March 31, 2017 was primarily related to the Development Projects expenses in the amount of $4.3 million that could not be capitalized. Additionally, $52.1 million of the costs incurred for the Development Projects were capitalized for the three months ended March 31, 2017.

XML

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Revenue recognition and Promotional allowances

Gaming revenue is the net difference between gaming wagers and payouts for prizes from video gaming machines ("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 related expenses such as the New York State Gaming Commission's ("NYSGC") share of VGM revenue and the Monticello Harness Horsemen’s Association (the “MHHA”) and the Agriculture and New York State Horse Breeding Development Fund’s contractually required shares of revenue.

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. Some elements of the racing revenues from Off-Track Betting Corporations (“OTBs”) 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, beverage 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 months ended March 31, 2017 and 2016 are as follows:

	Three Months Ended
	March 31, 2017		March 31, 2016
	(in thousands)
Food and beverage	$	165	$	360
Non-subsidized free play	124		589
Players club awards	63		119
Total retail value of promotional allowances	$	352	$	1,068

The estimated cost of providing complimentary food, beverage and other items for the three months ended March 31, 2017 and 2016 are as follows:

	Three Months Ended
	March 31, 2017		March 31, 2016
	(in thousands)
Food and beverage	$	232	$	530
Non-subsidized free play	73		347
Players club awards	63		119
Total cost of promotional allowances	$	368	$	996

Accounts receivable

Accounts receivable, net of allowances, are stated at the amount the Company expects to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectability of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and the Company’s judgment of collectability. 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. The Company recorded an allowance for doubtful accounts of approximately $171,000 as of March 31, 2017 and December 31, 2016.

Other long-term liabilities

The difference between our cash payments and straight-line rent on our leases of $8.5 million and $8.0 million at March 31, 2017 and December 31, 2016, respectively, is included in other long-term liabilities.

Common stock - loss per share

The Company computes basic loss per share by dividing net loss applicable to holders of common stock by the weighted-average common stock outstanding for the period. Diluted loss per share reflects the potential dilution of earnings that could occur if securities or contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three-month periods ended March 31, 2017 and 2016 were the same.

The following table shows the approximate number of common stock equivalents outstanding at March 31, 2017 and 2016 that could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share for the three months ended March 31, 2017 and 2016, because their inclusion would have been anti-dilutive:

	Outstanding at
	March 31, 2017	March 31, 2016
Options	31,000	52,000
Warrants	133,000	133,000
Option Matching Rights	18,000	22,000
Unvested Restricted stock	180,000	199,000
Total	362,000	406,000

Interest Rate Cap Agreement

In February 2017, the Company entered into an interest rate cap agreement with Credit Suisse AG, International, pursuant to which the Company has effectively limited its exposure to increases in interest rates on its Term B Loan balance from May 1, 2017 through February 28, 2018 and then for a portion of its Term B Loan balance through July 31, 2019 (the "Interest Rate Cap"). The Company paid $675,000 for the Interest Rate Cap. The cost of the Interest Rate Cap will be amortized over its term as interest expense. The fair value of the Interest Rate Cap was $584,000 at March 31, 2017 and is presented at fair value as other assets on the Condensed Consolidated Balance Sheet. The difference between the fair value and amortized cost is recorded as an adjustment to accumulated other comprehensive loss.

Accumulated Other Comprehensive Loss

As of March 31, 2017, accumulated other comprehensive loss of $91,000 consisted solely of the fair value adjustment relating to the Interest Rate Cap.

Fair value

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

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

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

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

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

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

The Company used a third party to complete the valuation of its Interest Rate Cap, which is considered a Level 2 asset and is measured at fair value on a recurring basis using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows for the Interest Rate Cap.

At March 31, 2017, the estimated fair value of the Company's Term B Loan (as defined below) outstanding was approximately $414.4 million and the carrying value was approximately $415.0 million. The fair value of the Kien Huat Montreign Loan (as defined below) has not been estimated due to its related party nature and lack of comparable market information.

Stock-based compensation

The cost of all stock-based awards to employees, officers, directors and consultants, including grants of employee stock options and restricted stock, is recognized in the financial statements based on the fair value of the awards at grant date. The fair value of stock option awards would be determined using the Black-Scholes valuation model on the date of grant. The fair value of restricted stock awards is equal to the market price of Empire’s common stock on the date of grant. The fair value of stock-based awards is recognized as stock-based compensation expense on a straight-line basis over the requisite service period from the date of grant. As of March 31, 2017, there was approximately $1.9 million of total unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the Company’s equity compensation plan. That cost is expected to be recognized over a period of 2.75 years. This expected cost does not include the impact of any future stock-based compensation awards.

Income taxes

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

Intangible Assets

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

On December 21, 2015, the Company was granted a gaming license (the "Gaming Facility License"), for which it paid $51 million on March 30, 2016. The term of the Gaming Facility License is 10 years from the effective date, which was March 1, 2016. Amortization will not commence until the completion of construction and the opening to the general public of the Casino Project. Amortization will be recognized on a straight-line basis beginning at that time and continuing until the license is up for renewal in 2026. During the period that the Company is not amortizing the intangible asset, the Company will assess it for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired.

Recent Accounting Pronouncements

In May 2014, the FASB issued new revenue recognition guidance, which will supersede nearly all existing revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve the core principle, the new guidance implements a five-step process for customer contract revenue recognition. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Entities can transition to the new guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption.

The Company currently anticipates adopting this accounting standard during the first quarter of 2018, with a cumulative-effect adjustment as of the date of adoption. Although we are still evaluating the full impact of this standard on our consolidated financial statements, the Company has concluded that the adoption of this standard will affect how we account for our customer loyalty program(s) as well as the classification of revenues between gaming, food and beverage, lodging, retail, entertainment and other. Under our current customer loyalty program, customers earn points based on their level of play, which may be redeemed for various benefits, such as cash back or dining, among others. We currently determine our liability for unredeemed points based on the estimated costs of services or merchandise to be provided and estimated redemption rates. Under the new standard, points awarded under our customer loyalty program are considered a material right given to the players based on their gaming play and the promise to provide points to players will need to be accounted for as a separate performance obligation. The new standard will require us to allocate the revenues associated with the players’ activity between gaming revenue and the value of the points and to measure the liability based on the estimated standalone value of the points earned after factoring in the likelihood of redemption. As a result, we expect that gaming revenues will be reduced with a corresponding increase, in total, of food and beverage, lodging, retail, entertainment and other revenues. The revenue associated with the points earned will be recognized in the period in which they are redeemed. The quantitative effects of these changes have not yet been determined and are still being analyzed.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"), which provides guidance for accounting for leases. Under ASU 2016-02, the Company will be required to recognize the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard must be adopted using a modified retrospective approach and provides for certain practical expedients. Early adoption is permitted. The Company has not yet completed its assessment of the impact of the new standard on the Company's consolidated financial statements. The Company currently anticipates adopting this standard during 2019.

In March 2016, FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which provides guidance for accounting for stock-based compensation for employees. Under ASU 2016-09, several aspects of the accounting for share-based payment award transactions are simplified, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company adopted this standard during the first quarter of 2017 and there was no material impact from the implementation this guidance.

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Prepaid Expenses and Other Assets

3 Months Ended

Mar. 31, 2017

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

Prepaid Expenses and Other Assets

Prepaid Expenses and Other Assets

Our wholly-owned subsidiary, Monticello Raceway Management, Inc. ("MRMI"), has participated in the New York State Empire Zones real estate tax credit program for over 10 years. Under this program, the Company receives a refund for real estate taxes paid during the year, after the end of New York State's fiscal year. Beginning in 2014, the amount of the tax credit received is reduced by 20% each year until the tax credit ends for the Company at December 31, 2017. For the year ended December 31, 2017, the Company will receive a 20% refund for real estate taxes paid. The amounts of the expected real estate tax credits are included in prepaid expenses and other current assets on the accompanying Condensed Consolidated Balance Sheet at March 31, 2017 and December 31, 2016, and were approximately $609,000 and $1.3 million, respectively.

Prepaid expenses and other current assets, as presented on the Condensed Consolidated Balance Sheet, are comprised of the following at March 31, 2017 and December 31, 2016:

	March 31, 2017		December 31, 2016
	(in thousands)
Empire Zones real estate tax credit	$	609	$	1,325
Prepaid real estate taxes	981		558
Prepaid insurance	608		919
Inventory	175		177
Prepaid gaming expenses	214		61
Development escrow and security refundable deposit	627		623
Prepaid other	713		672
Total prepaid expenses and other current assets	$	3,927	$	4,335

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Property and Equipment

3 Months Ended

Mar. 31, 2017

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and Equipment

Property and Equipment

Property and equipment consists of the following:

	March 31, 2017			December 31, 2016
	(in thousands)
Land	$	770		$	770
Land improvements	1,759			1,758
Buildings	4,727			4,727
Building improvements	28,116			28,088
Vehicles	319			307
Furniture, fixtures and equipment	4,374			4,278
Construction in Progress	1,954			919
	42,019			40,847
Less—Accumulated depreciation	(14,767		)	(14,432		)
	$	27,252		$	26,415

Depreciation expense was approximately $336,000 for each of the three-month periods ended March 31, 2017 and 2016, respectively.

The VGMs in the Company’s facility are owned by the NYSGC and, accordingly, the Company's consolidated financial statements include neither the cost nor the depreciation of those devices.

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Development Project Costs, Cash Collateral for Deposit Bond and Cash for Development Projects

3 Months Ended

Mar. 31, 2017

Other Income and Expenses [Abstract]

Development Project Costs, Cash Collateral for Deposit Bond and Cash for Development Projects

Development Projects Costs, Cash Collateral for Deposit Bond and Cash for Development Projects

Development Projects Costs

At March 31, 2017 and December 31, 2016, total capitalized Development Projects costs were approximately $254.5 million and $202.4 million, respectively. Total capitalized Development Projects costs consist of construction costs, site development, contractor insurance, general conditions, construction manager fees, and professional fees such as architectural, legal and accounting fees, and is reflected on the Condensed Consolidated Balance Sheet as capitalized Development Projects costs. Interest expense totaling $3.7 million was capitalized during the three-month period ended March 31, 2017.

During the three-month period ended March 31, 2017, total Development Projects costs incurred were approximately $56.3 million, of which $52.0 million was capitalized and $4.3 million was expensed. Development Projects expenses consisted of $2.6 million of land lease costs, $652,000 of salary and related benefits, $353,000 of bank charges, $158,000 of real estate taxes, $143,000 of insurance expenses, $93,000 of marketing expenses, $35,000 of consulting and professional service fees, and an additional $218,000 of pre-opening expenses.

During the three-month period ended March 31, 2016, total Development Projects costs incurred were approximately $44.3 million, of which $41.2 million was capitalized and $3.1 million was expensed. Development Projects expenses consisted of $2.6 million of land lease costs, $194,000 of consulting and professional service fees, $97,000 of real estate taxes, $106,000 of insurance expenses, and an additional $113,000 of pre-opening expenses.

Cash Collateral for Deposit Bond

In February 2016, the Company deposited $15 million in performance bonds to guarantee the completion of the Development Projects. These funds will be returned to the Company upon the satisfactory completion of the Development Projects.

Cash for Development Projects

At March 31, 2017, the $393.4 million of Cash for Development Projects represented the remaining funds from the Term Loan Facility to be utilized for the Development Projects. At December 31, 2016, the $26.4 million of Cash for Development Projects on the Condensed Consolidated Balance Sheet represented the remaining funds from the January 2016 Rights Offering (defined below) to be utilized for the Development Projects.

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Accrued Expenses and Other Current Liabilities

3 Months Ended

Mar. 31, 2017

Payables and Accruals [Abstract]

Accrued Expenses and Other Current Liabilities

Accrued Development Projects Costs, Accrued Expenses and Other Current Liabilities

Accrued Development Projects costs at March 31, 2017 and December 31, 2016 were $45.7 million and $41.9 million, respectively, and were primarily comprised of amounts due to the Casino Project's construction manager, as well as amounts due to the architect and other vendors for costs incurred for the Development Projects.

Accrued expenses and other current liabilities, as presented on the Condensed Consolidated Balance Sheet, are comprised of the following:

	March 31, 2017		December 31, 2016
	(in thousands)
Liability for horse racing purses	$	1,244	$	1,139
Accrued payroll	1,058		1,897
Accrued interest payable	3,536		—
Accrued redeemable points	172		167
Liability to NYSGC	142		360
Liability for local progressive jackpot	947		907
Accrued settlement liability	—		758
Accrued professional fees	365		308
Federal tax withholding payable	115		78
Accrued other	928		1,733
Total accrued expenses and other current liabilities	$	8,507	$	7,347

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Term Loan Agreement and Revolving Credit Agreement

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Term Loan Agreement and Revolving Credit Agreement

Term Loan Agreement

On January 24, 2017 (the "Loan Closing Date"), Montreign Operating entered into a Building Term Loan Agreement (the “Term Loan Agreement”) with Montreign Operating, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as administrative agent. The Term Loan Agreement provides for loans to be made to Montreign Operating in an aggregate principal amount of $485 million (the “Term Loan Facility”).

The Term Loan Facility consists of $70 million of Term A loans ( the “Term A Loan”) and $415 million of Term B loans (the “Term B Loan”). The Term B Loan was borrowed in full on the Loan Closing Date and the proceeds were used to pay fees and expenses related to the financing and fund various lender-controlled accounts. The proceeds of the Term Loan Facility (including proceeds of the Term A Loan, which will be deposited into the lender-controlled accounts upon borrowing) will be made available to Montreign Operating, subject to Montreign Operating satisfying the disbursement conditions set forth in the Term Loan Agreement and related loan documents, to pay debt service and costs relating to the development and construction of the Development Projects.

The Term A Loan may be borrowed during the period from the Loan Closing Date to July 24, 2018, subject to meeting the conditions set forth in the Term Loan Agreement at the time of the borrowing. The Term A Loan will mature on January 24, 2022 and the Term B Loan will mature on January 24, 2023. Interest will accrue on outstanding borrowings under the Term A Loan at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. Interest will accrue on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a LIBOR floor of 1%) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. In addition, Montreign Operating will pay a commitment fee to each Term A Loan lender (“Term A Lender”) equal to the undrawn amount of such Term A Lender’s Term A Loan commitment multiplied by a rate equal to 2.5% per annum for the period commencing on the Loan Closing Date through March 24, 2018 and 5.0% per annum thereafter.

As of March 31, 2017, $415 million was outstanding under the Term B Loan and there were no borrowings outstanding under the Term A Loan. No principal repayments are due prior to the projected Casino Project opening date (which is expected to be March 1, 2018). Thereafter, principal payments are due at the end of each calendar quarter. The first loan repayment is due June 30, 2018. The following table lists the annual principal repayments due under the Term B Loan agreement:

	(in thousands)
2017	$0
2018	3,113
2019	4,150
2020	4,150
2021	4,150
2022 to 2023	399,437

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

Revolving Credit Agreement

On the Loan Closing Date, Montreign Operating also entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”) with Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent. The Revolving Credit Agreement provides for loans or other extensions of credit to be made to Montreign Operating in an aggregate principal amount of up to $15 million (including a letter of credit sub-facility of $10 million) (the “Revolving Credit Facility”), the proceeds of which may be used for working capital needs, capital expenditures and other general corporate purposes following the opening of the Casino Project to the public. The Revolving Credit Facility will mature on January 24, 2022. Interest will accrue on outstanding borrowings at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum.

Collateral and Other Provisions

The Term Loan Facility and the Revolving Credit Facility are each guaranteed by Empire Resorts Real Estate I, LLC ("ERREI") and Empire Resorts Real Estate II, LLC ("ERREII" and together with ERREI, the "Montreign Subsidiaries"), both indirect, wholly-owned subsidiaries of Montreign Operating, and are secured by security interests in substantially all the real and personal property of Montreign Operating and the Montreign Subsidiaries and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding Company, LLC ("Montreign Holding"), a wholly-owned subsidiary of Empire. In addition, Empire delivered a completion guaranty in connection with the Term Loan Facility guaranteeing the completion of the construction of the Casino Project and the Entertainment Village Project. Empire’s liability under the completion guaranty (excluding lender’s enforcement costs) is capped at $30 million.

The Term Loan Facility and the Revolving Credit Agreement contain representations and warranties, affirmative covenants, negative covenants and financial covenants that are usual and customary, including representations, warranties and covenants that, among other things, restrict the ability of Montreign Operating and the Montreign Subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, or make dividends or other distributions. Additionally, Montreign Operating is required to deposit $35 million into the lender-controlled account holding the net proceeds of the Term Loan Facility and the Kien Huat Montreign Loan, which amount will be used towards the Entertainment Village Project. Of the $35 million, $15 million is required to be deposited by June 30, 2017 and the remaining $20 million is required to be deposited by December 31, 2017. The Company must fund the $35 million in the form of a further equity contribution to Montreign Operating. The Company expects to raise additional debt or equity capital by the dates on which the deposits must be made.

Obligations under the Term Loan Agreement and the Revolving Credit Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including, among others: nonpayment of principal, interest or fees; breach of the affirmative or negative covenants; revocation of a gaming license for seven consecutive business days; and a change of control (as such term is defined in the Term Loan Agreement) of Montreign Operating.

Long-Term Loans (Related Party)

Conversion of Kien Huat Note

On November 17, 2010, Empire entered into a loan agreement (the "2010 Kien Huat Loan Agreement") with Kien Huat Realty III Limited ("Kien Huat") pursuant to which Empire issued a convertible promissory note (the "2010 Kien Huat Note") in the original principal amount of $35.0 million, of which $17.4 million was outstanding as of December 31, 2015. On February 17, 2016, upon consummation of the January 2016 Rights Offering (defined below), the 2010 Kien Huat Note was converted into 1,332,058 shares of common stock (the "Note Conversion") in accordance with the terms of the 2010 Kien Huat Loan Agreement.

Kien Huat Construction Loan Agreement

On October 13, 2016, Montreign Operating and Kien Huat entered into a loan agreement (the "KH Construction Loan Agreement") pursuant to which Kien Huat agreed to make available to Montreign Operating up to an aggregate of $50 million of loans to pay the expenses of the Casino Project while the debt financing for the Development Projects was being finalized. The term of the KH Construction Loan Agreement would expire on the earlier of (i) the consummation of financing in an amount no less than the remaining contract amount under the Casino Project construction contract and (ii) October 13, 2017. In connection with the closing of the Term Loan Facility and the Kien Huat Montreign Loan, on January 24, 2017, the KH Construction Loan Agreement expired pursuant to its terms without being utilized by Montreign Operating. Montreign Operating paid Kien Huat a commitment fee of $500,000 upon execution of the KH Construction Loan. The commitment fee was capitalized and was included in other assets at December 31, 2016. It was written off on January 24, 2017 upon the issuance of the Kien Huat Montreign Loan Agreement (defined and described below).     

Kien Huat Montreign Loan Agreement

On the Loan Closing Date, Kien Huat and Montreign Holding entered into a loan agreement (the "Kien Huat Montreign Loan Agreement"), pursuant to which Montreign Holding obtained from Kien Huat a loan in the principal amount of $32.3 million (the "Kien Huat Montreign Loan"), the net proceeds of which were used as a capital contribution to Montreign Operating for use towards the expenses of the Development Projects. The Kien Huat Montreign Loan will mature on February 24, 2024 (the “Kien Huat Loan Maturity Date”), which date may be extended by Kien Huat in its sole discretion by up to an additional year.

The Kien Huat Montreign Loan bears interest at a rate of 12% per annum. Prior to the Kien Huat Loan Maturity Date, interest on the Kien Huat Montreign Loan shall accrue and be added to the outstanding principal of the Kien Huat Montreign Loan (the “Principal Indebtedness”) on the first business day of each calendar month beginning on February 1, 2017 (each an “Interest Payment Date”) and shall thereafter be deemed to be part of the Principal Indebtedness. The Principal Indebtedness, including all interest due through the applicable Interest Payment Date and other amounts due under the Kien Huat Montreign Loan, shall be payable in cash on the Kien Huat Loan Maturity Date. Notwithstanding the foregoing, Montreign Holding shall be required to pay in cash to Kien Huat, at the end of any “accrual period” (as defined in Section 1275(a)(5) of the Internal Revenue Code of 1986, as amended (the “Code”)) ending after the fifth anniversary of the Loan Closing Date, the aggregate amount by which (x) the sum of (i) the amount of accrued interest on the Kien Huat Montreign Loan that has been added to the Principal Indebtedness plus (ii) any other accrued but unpaid original issue discount (as determined under Section 163(i) of the Code) on the Kien Huat Montreign Loan from the closing date through the end of such accrual period, in each case that has not been paid in cash, exceeds (y) the product of (i) the “issue price” (as defined for purposes of the Code) and (ii) the “yield to maturity” (as defined for purposes of the Code). In addition to the interest payable on the Kien Huat Montreign Loan, Kien Huat was entitled to a commitment fee of 1%, which fee was added to the Principal Indebtedness of the Kien Huat Montreign Loan.

Until the Kien Huat Montreign Loan is repaid in full, Montreign Holding shall make no dividend or other distributions to Empire except for purposes of (i) paying bona fide corporate overhead expenses in an amount not to exceed $9 million (which amount is subject to further reduction pursuant to the Kien Huat Montreign Loan Agreement) and (ii) the payment of taxes by Empire, to the extent also permitted by the Term Loan Agreement with respect to distributions to Montreign Operating. The Kien Huat Montreign Loan may be prepaid in full or in part at any time without premium or penalty.

The obligations of Montreign Holding under the Kien Huat Montreign Loan Agreement are secured by a pledge of all the membership interests of Montreign Holding by Empire. The Kien Huat Montreign Loan Agreement contains representations and warranties and affirmative covenants that are usual and customary, including representations, warranties and covenants that, among other things, restrict Montreign Holding’s use of the proceeds of the Kien Huat Montreign Loan to expenses relating to the Development Projects. Obligations under the Kien Huat Montreign Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including, among others, nonpayment of principal, interest or fees, breach of the affirmative covenants and a default with respect to the payment of principal or interest under the Term Loan Facility by Montreign Operating or acceleration of the Term Loan Facility for any reason.

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Long-Term Loans (Related Party)

3 Months Ended

Mar. 31, 2017

Debt Disclosure [Abstract]

Long-Term Loans (Related Party)

Term Loan Agreement

On January 24, 2017 (the "Loan Closing Date"), Montreign Operating entered into a Building Term Loan Agreement (the “Term Loan Agreement”) with Montreign Operating, the lenders from time to time party thereto, and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as administrative agent. The Term Loan Agreement provides for loans to be made to Montreign Operating in an aggregate principal amount of $485 million (the “Term Loan Facility”).

The Term Loan Facility consists of $70 million of Term A loans ( the “Term A Loan”) and $415 million of Term B loans (the “Term B Loan”). The Term B Loan was borrowed in full on the Loan Closing Date and the proceeds were used to pay fees and expenses related to the financing and fund various lender-controlled accounts. The proceeds of the Term Loan Facility (including proceeds of the Term A Loan, which will be deposited into the lender-controlled accounts upon borrowing) will be made available to Montreign Operating, subject to Montreign Operating satisfying the disbursement conditions set forth in the Term Loan Agreement and related loan documents, to pay debt service and costs relating to the development and construction of the Development Projects.

The Term A Loan may be borrowed during the period from the Loan Closing Date to July 24, 2018, subject to meeting the conditions set forth in the Term Loan Agreement at the time of the borrowing. The Term A Loan will mature on January 24, 2022 and the Term B Loan will mature on January 24, 2023. Interest will accrue on outstanding borrowings under the Term A Loan at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum. Interest will accrue on outstanding borrowings under the Term B Loan at a rate equal to LIBOR (with a LIBOR floor of 1%) plus 8.25% per annum, or an alternate base rate plus 7.25% per annum. In addition, Montreign Operating will pay a commitment fee to each Term A Loan lender (“Term A Lender”) equal to the undrawn amount of such Term A Lender’s Term A Loan commitment multiplied by a rate equal to 2.5% per annum for the period commencing on the Loan Closing Date through March 24, 2018 and 5.0% per annum thereafter.

As of March 31, 2017, $415 million was outstanding under the Term B Loan and there were no borrowings outstanding under the Term A Loan. No principal repayments are due prior to the projected Casino Project opening date (which is expected to be March 1, 2018). Thereafter, principal payments are due at the end of each calendar quarter. The first loan repayment is due June 30, 2018. The following table lists the annual principal repayments due under the Term B Loan agreement:

	(in thousands)
2017	$0
2018	3,113
2019	4,150
2020	4,150
2021	4,150
2022 to 2023	399,437

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

Revolving Credit Agreement

On the Loan Closing Date, Montreign Operating also entered into a Revolving Credit Agreement (the “Revolving Credit Agreement”) with Montreign Operating, the lenders from time to time party thereto, and Fifth Third Bank, as administrative agent. The Revolving Credit Agreement provides for loans or other extensions of credit to be made to Montreign Operating in an aggregate principal amount of up to $15 million (including a letter of credit sub-facility of $10 million) (the “Revolving Credit Facility”), the proceeds of which may be used for working capital needs, capital expenditures and other general corporate purposes following the opening of the Casino Project to the public. The Revolving Credit Facility will mature on January 24, 2022. Interest will accrue on outstanding borrowings at a rate equal to LIBOR plus 5.0% per annum, or an alternate base rate plus 4.0% per annum.

Collateral and Other Provisions

The Term Loan Facility and the Revolving Credit Facility are each guaranteed by Empire Resorts Real Estate I, LLC ("ERREI") and Empire Resorts Real Estate II, LLC ("ERREII" and together with ERREI, the "Montreign Subsidiaries"), both indirect, wholly-owned subsidiaries of Montreign Operating, and are secured by security interests in substantially all the real and personal property of Montreign Operating and the Montreign Subsidiaries and by a pledge of all the membership interests of Montreign Operating held by Montreign Holding Company, LLC ("Montreign Holding"), a wholly-owned subsidiary of Empire. In addition, Empire delivered a completion guaranty in connection with the Term Loan Facility guaranteeing the completion of the construction of the Casino Project and the Entertainment Village Project. Empire’s liability under the completion guaranty (excluding lender’s enforcement costs) is capped at $30 million.

The Term Loan Facility and the Revolving Credit Agreement contain representations and warranties, affirmative covenants, negative covenants and financial covenants that are usual and customary, including representations, warranties and covenants that, among other things, restrict the ability of Montreign Operating and the Montreign Subsidiaries to incur additional debt, incur or permit liens on assets, make investments and acquisitions, consolidate or merge with any other company, or make dividends or other distributions. Additionally, Montreign Operating is required to deposit $35 million into the lender-controlled account holding the net proceeds of the Term Loan Facility and the Kien Huat Montreign Loan, which amount will be used towards the Entertainment Village Project. Of the $35 million, $15 million is required to be deposited by June 30, 2017 and the remaining $20 million is required to be deposited by December 31, 2017. The Company must fund the $35 million in the form of a further equity contribution to Montreign Operating. The Company expects to raise additional debt or equity capital by the dates on which the deposits must be made.

Obligations under the Term Loan Agreement and the Revolving Credit Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including, among others: nonpayment of principal, interest or fees; breach of the affirmative or negative covenants; revocation of a gaming license for seven consecutive business days; and a change of control (as such term is defined in the Term Loan Agreement) of Montreign Operating.

Long-Term Loans (Related Party)

Conversion of Kien Huat Note

On November 17, 2010, Empire entered into a loan agreement (the "2010 Kien Huat Loan Agreement") with Kien Huat Realty III Limited ("Kien Huat") pursuant to which Empire issued a convertible promissory note (the "2010 Kien Huat Note") in the original principal amount of $35.0 million, of which $17.4 million was outstanding as of December 31, 2015. On February 17, 2016, upon consummation of the January 2016 Rights Offering (defined below), the 2010 Kien Huat Note was converted into 1,332,058 shares of common stock (the "Note Conversion") in accordance with the terms of the 2010 Kien Huat Loan Agreement.

Kien Huat Construction Loan Agreement

On October 13, 2016, Montreign Operating and Kien Huat entered into a loan agreement (the "KH Construction Loan Agreement") pursuant to which Kien Huat agreed to make available to Montreign Operating up to an aggregate of $50 million of loans to pay the expenses of the Casino Project while the debt financing for the Development Projects was being finalized. The term of the KH Construction Loan Agreement would expire on the earlier of (i) the consummation of financing in an amount no less than the remaining contract amount under the Casino Project construction contract and (ii) October 13, 2017. In connection with the closing of the Term Loan Facility and the Kien Huat Montreign Loan, on January 24, 2017, the KH Construction Loan Agreement expired pursuant to its terms without being utilized by Montreign Operating. Montreign Operating paid Kien Huat a commitment fee of $500,000 upon execution of the KH Construction Loan. The commitment fee was capitalized and was included in other assets at December 31, 2016. It was written off on January 24, 2017 upon the issuance of the Kien Huat Montreign Loan Agreement (defined and described below).     

Kien Huat Montreign Loan Agreement

On the Loan Closing Date, Kien Huat and Montreign Holding entered into a loan agreement (the "Kien Huat Montreign Loan Agreement"), pursuant to which Montreign Holding obtained from Kien Huat a loan in the principal amount of $32.3 million (the "Kien Huat Montreign Loan"), the net proceeds of which were used as a capital contribution to Montreign Operating for use towards the expenses of the Development Projects. The Kien Huat Montreign Loan will mature on February 24, 2024 (the “Kien Huat Loan Maturity Date”), which date may be extended by Kien Huat in its sole discretion by up to an additional year.

The Kien Huat Montreign Loan bears interest at a rate of 12% per annum. Prior to the Kien Huat Loan Maturity Date, interest on the Kien Huat Montreign Loan shall accrue and be added to the outstanding principal of the Kien Huat Montreign Loan (the “Principal Indebtedness”) on the first business day of each calendar month beginning on February 1, 2017 (each an “Interest Payment Date”) and shall thereafter be deemed to be part of the Principal Indebtedness. The Principal Indebtedness, including all interest due through the applicable Interest Payment Date and other amounts due under the Kien Huat Montreign Loan, shall be payable in cash on the Kien Huat Loan Maturity Date. Notwithstanding the foregoing, Montreign Holding shall be required to pay in cash to Kien Huat, at the end of any “accrual period” (as defined in Section 1275(a)(5) of the Internal Revenue Code of 1986, as amended (the “Code”)) ending after the fifth anniversary of the Loan Closing Date, the aggregate amount by which (x) the sum of (i) the amount of accrued interest on the Kien Huat Montreign Loan that has been added to the Principal Indebtedness plus (ii) any other accrued but unpaid original issue discount (as determined under Section 163(i) of the Code) on the Kien Huat Montreign Loan from the closing date through the end of such accrual period, in each case that has not been paid in cash, exceeds (y) the product of (i) the “issue price” (as defined for purposes of the Code) and (ii) the “yield to maturity” (as defined for purposes of the Code). In addition to the interest payable on the Kien Huat Montreign Loan, Kien Huat was entitled to a commitment fee of 1%, which fee was added to the Principal Indebtedness of the Kien Huat Montreign Loan.

Until the Kien Huat Montreign Loan is repaid in full, Montreign Holding shall make no dividend or other distributions to Empire except for purposes of (i) paying bona fide corporate overhead expenses in an amount not to exceed $9 million (which amount is subject to further reduction pursuant to the Kien Huat Montreign Loan Agreement) and (ii) the payment of taxes by Empire, to the extent also permitted by the Term Loan Agreement with respect to distributions to Montreign Operating. The Kien Huat Montreign Loan may be prepaid in full or in part at any time without premium or penalty.

The obligations of Montreign Holding under the Kien Huat Montreign Loan Agreement are secured by a pledge of all the membership interests of Montreign Holding by Empire. The Kien Huat Montreign Loan Agreement contains representations and warranties and affirmative covenants that are usual and customary, including representations, warranties and covenants that, among other things, restrict Montreign Holding’s use of the proceeds of the Kien Huat Montreign Loan to expenses relating to the Development Projects. Obligations under the Kien Huat Montreign Loan Agreement may be accelerated upon certain customary events of default (subject to grace periods, as appropriate), including, among others, nonpayment of principal, interest or fees, breach of the affirmative covenants and a default with respect to the payment of principal or interest under the Term Loan Facility by Montreign Operating or acceleration of the Term Loan Facility for any reason.

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Bryanston Settlement

3 Months Ended

Mar. 31, 2017

Bryanston Settlement [Abstract]

Bryanston Settlement Agreement

Bryanston Settlement Agreement

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

On March 7, 2016, the Company redeemed the outstanding Series E Preferred Stock held by the Bryanston Parties for approximately $30.7 million pursuant to the terms of the Bryanston Settlement Agreement. Because the event that caused the entire liability to become due occurred during 2016, the liability was recorded pursuant to the payment terms in place at December 31, 2015, of which $1.5 million was recorded as a current liability and the remainder was recorded as a long-term liability on the December 31, 2015 balance sheet. Interest expense associated with the change in the redemption amount of the liability was $231,000 for the three months ended March 31, 2016.

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Stockholders Equity

3 Months Ended

Mar. 31, 2017

Stockholders' Equity Note [Abstract]

Stockholders' Equity

Stockholders’ Equity

Authorized Capital

On November 1, 2016, Empire filed the Second Amended and Restated Certificate of Incorporation (the "Restated Charter”) with the Secretary of State of the State of Delaware. Pursuant to the Restated Charter, Empire’s authorized capital stock consists of 155 million shares, of which 150 million shares are common stock, par value $0.01 per share, and five million shares are preferred stock, par value $0.01 per share.

Common Stock

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

January 2016 Rights Offering

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

The January 2016 Rights Offering closed on February 17, 2016. The Company issued a total of 20,138,888 shares of common stock for aggregate gross proceeds of approximately $290 million. This includes 176,086shares issued to holders upon exercise of their basic subscription and over-subscription rights and 13,136,817 shares issued to Kien Huat upon exercise of its basic subscription rights. Kien Huat also acquired the remaining 6,825,985 shares not sold in the January 2016 Rights Offering pursuant to the January 2016 Standby Purchase Agreement. The net proceeds of the January 2016 Rights Offering were approximately $286.0 million following the deduction of expenses, which were used (i) to pay the expenses relating to the construction of the Casino Project, (ii) to redeem the outstanding shares of the Series E Preferred Stock in accordance with the terms of the Bryanston Settlement Agreement on March 7, 2016 and (iii) for the working capital needs of the Company. Pursuant to the January 2016 Standby Purchase Agreement, we paid Kien Huat a commitment fee of $1,450,000, which is equal to 0.5% of the maximum amount of the January 2016 Rights Offering, and reimbursed Kien Huat for expenses in the amount of $50,000.

Preferred Stock and Dividends

The Company’s Series B Preferred Stock has voting rights of 0.054 votes per share and each share is convertible into 0.054 shares of its common stock. It has a liquidation value of $29 per share and is entitled to annual cumulative dividends of $2.90 per share payable quarterly in cash. The Company has the right to pay dividends on an annual basis by issuing shares of its common stock at the rate of $3.77 per share. The value of shares of common stock issued as payment is based upon the average closing price for the shares of common stock for the 20 trading days preceding January 30 of the year following that for which the dividends are due. At March 31, 2017 and December 31, 2016, there were 44,258 shares of Series B Preferred Stock outstanding.

The Board authorized the cash payment of the Series B Preferred Stock on March 8, 2016. Quarterly dividend payments in the amount of $32,087 were made on April 1, 2016, July 1, 2016, October 3, 2016 and January 3, 2017. On April 3, 2017, a payment of $32,087 was made for the first quarter of 2017.

On March 2, 2016, the Board authorized the cash payment of dividends due for the year ended December 31, 2015 on the Series B Preferred Stock in the amount of approximately $167,000. At December 31, 2015, the Company had undeclared cash dividends on the Series B Preferred Stock of approximately $167,000 and payment was made the same day. The cash dividend was calculated as if it were a dividend issued in shares of common stock, which in accordance with the terms of the Series B Preferred Stock, means the amount of the cash payment is the annual cash dividend value (if it had been paid quarterly) multiplied by 1.3.

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Concentration

3 Months Ended

Mar. 31, 2017

Risks and Uncertainties [Abstract]

Concentration

Concentration

As of March 31, 2017, the Company had one debtor, Woodbine Entertainment Group, which represented 10.8% of the total net outstanding racing-related accounts receivable. As of December 31, 2016, the Company had one debtor, Hawthorne OTB, which represented 16.9% of the total net outstanding racing-related accounts receivable.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

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

Contingent Liability Settlement

On January 4, 2017, the Company entered into an agreement (the “2017 Settlement Agreement”) to issue 33,333 registered shares (the "Settlement Shares") of its common stock to an individual as part of the settlement of a claim asserted in connection with such individual's alleged provision of certain services to the Company. Pursuant to the 2017 Settlement Agreement, the Company issued the Settlement Shares on January 9, 2017. The 2017 Settlement Agreement provided for a mutual full release of all potential claims upon the Company's delivery of such Settlement Shares to the individual. The amount of the liability of $758,000 was included in accrued expenses at December 31, 2016.

Operating leases

The following table represents the minimum future lease payments under the Company's operating leases at March 31, 2017:

Payments due by Period
Year ending December 31,	Total Lease Payments
	(in thousands)
2017	$	9,000
2018	10,550
2019	7,775
2020	7,800
2021	8,300
2022 to 2056	370,274
Total	$	413,699

The details of lease commitments are described below.

Casino Lease

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

The following table represents the future fixed rent payments under the Casino Lease at March 31, 2017:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1) (2)	$9,000
2018 (2) (3)	10,500
2019 (3)	7,500
2020 (3)	7,500
2021 (3)	8,000
2022 to 2056 (3)	354,624

(1) Until February 29, 2016, the Company continued to make payments of $500,000 per month it would have made under the Original Option Agreement (defined below). From March 1, 2016 until February 28, 2017, option payments made by the Company under a certain option agreement, originally executed on December 21, 2011 and last amended on June 20, 2014, which totaled $8.5 million, were applied against fixed rent due by the Company under the Casino Lease for such period.

(2) From March 1, 2017 through August 31, 2018, fixed rent is $1.0 million per month.

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

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

Golf Course Lease

On December 28, 2015, ERREI entered into a sublease (the “Golf Course Lease”) with the Adelaar Developer, LLC (the "Destination Resort Developer") for the lease of the parcel on which the golf course is located (the "Golf Course Parcel"). The terms of the Golf Course Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Golf Course Lease, there is no percentage rent due. Fixed rent payments under the Golf Course Lease are represented in the table below:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1)(2)	$0
2018 (2)	0
2019 (2)	125
2020 (2)	150
2021 (2)	150
2022 to 2056 (2) (3)	7,825

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

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

year.

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

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

Entertainment Village Lease

On December 28, 2015, Empire Resorts Real Estate II, LLC ("ERREII"), an indirect, wholly-owned subsidiary of Montreign Operating, entered into a sublease (the “Entertainment Village Lease”) with the Destination Resort Developer, for the lease of the parcel of land on which the Entertainment Village would be built (the "Entertainment Village Parcel" and, together with the Casino Parcel and Golf Course Parcel, the "Project Parcels"). The terms of the Entertainment Village Lease are substantially similar to the Casino Lease, subject to the material differences described below. Under the Entertainment Village Lease, there is no percentage rent due. Fixed rent payments under the Entertainment Village Lease are represented in the table below:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1)(2)	$0
2018 (2)	50
2019 (2)	150
2020 (2)	150
2021 (2)	150
2022 to 2056 (2) (3)	7,825

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

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

(3) From September 2028 through the remainder of the term of the Entertainment Village Lease, fixed rent will equal $250,000 per year.

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

Purchase Option Agreement

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

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

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

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Related Party Transactions

3 Months Ended

Mar. 31, 2017

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Moelis Agreements

On December 9, 2013, the Company executed a letter agreement, as supplemented by a letter dated May 20, 2015, (together, the "Moelis Letter Agreement") pursuant to which it engaged Moelis & Company LLC ("Moelis") to act as its financial advisor in connection with the Casino Project. In the event a financing is consummated, the Moelis Letter Agreement contemplates additional transaction-based fees would be earned by Moelis.

At the close of the January 2016 Rights Offering, Moelis was paid approximately $2.1 million for financial advisory services in connection with the Casino Project pursuant to the Moelis Letter Agreement.

On January 24, 2017, in connection with the closing of the Term Loan Facility and the Revolving Credit Facility, Moelis was paid approximately $2.5 million for financial advisory services pursuant to the Moelis Letter Agreement.

In March 7, 2017, Montreign Operating entered into an engagement agreement with Moelis (the "Moelis-Montreign Engagement Agreement") pursuant to which Moelis will act as exclusive financial advisor to Montreign Operating. Pursuant to the Moelis-Montreign Engagement Agreement, Moelis is entitled to an advisory fee of $100,000, which was paid upon execution, and reimbursement of expenses up to $75,000. The Moelis-Montreign Engagement Agreement will automatically terminate on December 31, 2017, unless either party terminates earlier.

Gregg Polle, a director of the Company, is a Managing Director of Moelis. Mr. Polle recused himself from participating in the discussion of the Moelis Letter Agreement, the Moelis-Montreign Engagement Agreement and the determination of whether to enter into such agreements.

RWS License Agreement

On March 31, 2017, Montreign Operating entered into a license agreement (the “RWS License Agreement”) with RW Services Pte Ltd (“RWS”). Pursuant to the RWS License Agreement, RWS granted Montreign Operating the non-exclusive, non-transferable, revocable and limited right to use certain “Genting” and “Resorts World” trademarks (the “RWS Licensed Marks”) in connection with the development, marketing, sales, management and operation (the “Permitted Uses”) of the Development Projects. The right to use the RWS Licensed Marks may be assigned or sublicensed only in certain limited circumstances. However, any use of the RWS Licensed Marks for a purpose other than the Permitted Uses will require the prior written consent of RWS. The Company expects the name of the Casino Project (the “Casino Name”) to be “Resorts World” used in combination with additional words as mutually agreed upon by Montreign Operating and RWS. The right to use the Casino Name is exclusive to Montreign Operating. Montreign Operating will have the right to use the Casino Name in connection with on-line gaming.

The initial term of the RWS License Agreement will expire on December 31, 2027, and shall be extended automatically for additional terms of 12 months each, up to a maximum of 39 additional terms, unless either of the parties provides notice to terminate the RWS License Agreement or upon the mutual written consent of both parties. Montreign Operating’s rights and obligations under the RWS License Agreement are subject to and governed by the rules and regulations applicable to Montreign Operating’s gaming operations at the Casino Project, and the fiduciary obligations of the boards of directors of Montreign Operating and Empire, as well as the fiduciary obligations of Kien Huat. Beginning on the date on which the Casino Project opens to the public, Montreign Operating will pay to RWS a fee equivalent to a percentage of Net Revenue (as such term is defined in the RWS License Agreement) generated in each calendar year from (i) all activity at the Casino Project, (ii) each specific use of the RWS Licensed Marks in the Entertainment Village or Golf Course and (iii) each specific use of the Casino Name in connection with on-line gaming. The percentage of Net Revenue payable as the fee is a low single digit percentage that will increase incrementally between the third year and sixth year of the term of the RWS License Agreement and will remain a low single digit percentage during the entire term of the RWS License Agreement.

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

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2017

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 video gaming machines ("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 related expenses such as the New York State Gaming Commission's ("NYSGC") share of VGM revenue and the Monticello Harness Horsemen’s Association (the “MHHA”) and the Agriculture and New York State Horse Breeding Development Fund’s contractually required shares of revenue.

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. Some elements of the racing revenues from Off-Track Betting Corporations (“OTBs”) 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, beverage 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.

Principles of consolidation

Accounts receivable

ccounts receivable

Accounts receivable, net of allowances, are stated at the amount the Company expects to collect. When required, an allowance for doubtful accounts is recorded based on information on the collectability of specific accounts. Accounts are considered past due or delinquent based on contractual terms, how recently payments have been received and the Company’s judgment of collectability. 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.

Deferred lease costs

Earnings (loss) per common share

loss per share

The Company computes basic loss per share by dividing net loss applicable to holders of common stock by the weighted-average common stock outstanding for the period. Diluted loss per share reflects the potential dilution of earnings that could occur if securities or contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the loss of the entity. Since the effect of common stock equivalents is anti-dilutive with respect to losses, these common stock equivalents have been excluded from the Company’s computation of loss per common share. Therefore, basic and diluted loss per common share for the three-month periods ended March 31, 2017 and 2016 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, Interest Rate Cap (as defined below), current liabilities and long-term loans. Current assets and current liabilities approximate fair value due to their short-term nature.

Stock-based compensation

Stock-based compensation

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

Income taxes

Income taxes

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

Estimates and assumptions

.

Recent accounting pronouncements

Recent Accounting Pronouncements

In May 2014, the FASB issued new revenue recognition guidance, which will supersede nearly all existing revenue recognition guidance. The core principle of the guidance is that an entity should recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve the core principle, the new guidance implements a five-step process for customer contract revenue recognition. The guidance also requires enhanced disclosures regarding the nature, amount, timing and uncertainty of revenues and cash flows arising from contracts with customers. The new guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Entities can transition to the new guidance either retrospectively or as a cumulative-effect adjustment as of the date of adoption.

The Company currently anticipates adopting this accounting standard during the first quarter of 2018, with a cumulative-effect adjustment as of the date of adoption. Although we are still evaluating the full impact of this standard on our consolidated financial statements, the Company has concluded that the adoption of this standard will affect how we account for our customer loyalty program(s) as well as the classification of revenues between gaming, food and beverage, lodging, retail, entertainment and other. Under our current customer loyalty program, customers earn points based on their level of play, which may be redeemed for various benefits, such as cash back or dining, among others. We currently determine our liability for unredeemed points based on the estimated costs of services or merchandise to be provided and estimated redemption rates. Under the new standard, points awarded under our customer loyalty program are considered a material right given to the players based on their gaming play and the promise to provide points to players will need to be accounted for as a separate performance obligation. The new standard will require us to allocate the revenues associated with the players’ activity between gaming revenue and the value of the points and to measure the liability based on the estimated standalone value of the points earned after factoring in the likelihood of redemption. As a result, we expect that gaming revenues will be reduced with a corresponding increase, in total, of food and beverage, lodging, retail, entertainment and other revenues. The revenue associated with the points earned will be recognized in the period in which they are redeemed. The quantitative effects of these changes have not yet been determined and are still being analyzed.

In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) ("ASU 2016-02"), which provides guidance for accounting for leases. Under ASU 2016-02, the Company will be required to recognize the assets and liabilities for the rights and obligations created by leased assets. ASU 2016-02 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The standard must be adopted using a modified retrospective approach and provides for certain practical expedients. Early adoption is permitted. The Company has not yet completed its assessment of the impact of the new standard on the Company's consolidated financial statements. The Company currently anticipates adopting this standard during 2019.

In March 2016, FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"), which provides guidance for accounting for stock-based compensation for employees. Under ASU 2016-09, several aspects of the accounting for share-based payment award transactions are simplified, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. ASU 2016-09 will take effect for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2016. The Company adopted this standard during the first quarter of 2017 and there was no material impact from the implementation this guidance.

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2017

Accounting Policies [Abstract]

Summary of retail value amounts included in promotional allowances

The retail value amounts included in promotional allowances for the three months ended March 31, 2017 and 2016 are as follows:

	Three Months Ended
	March 31, 2017		March 31, 2016
	(in thousands)
Food and beverage	$	165	$	360
Non-subsidized free play	124		589
Players club awards	63		119
Total retail value of promotional allowances	$	352	$	1,068

Summary of estimated cost of providing complimentary food, beverages and other items

The estimated cost of providing complimentary food, beverage and other items for the three months ended March 31, 2017 and 2016 are as follows:

	Three Months Ended
	March 31, 2017		March 31, 2016
	(in thousands)
Food and beverage	$	232	$	530
Non-subsidized free play	73		347
Players club awards	63		119
Total cost of promotional allowances	$	368	$	996

Summary of the approximate number of common stock equivalents outstanding

The following table shows the approximate number of common stock equivalents outstanding at March 31, 2017 and 2016 that could potentially dilute basic loss per share in the future, but were not included in the calculation of diluted loss per share for the three months ended March 31, 2017 and 2016, because their inclusion would have been anti-dilutive:

	Outstanding at
	March 31, 2017	March 31, 2016
Options	31,000	52,000
Warrants	133,000	133,000
Option Matching Rights	18,000	22,000
Unvested Restricted stock	180,000	199,000
Total	362,000	406,000

XML

Prepaid Expenses and Other Assets (Tables)

3 Months Ended

Mar. 31, 2017

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

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure

Prepaid expenses and other current assets, as presented on the Condensed Consolidated Balance Sheet, are comprised of the following at March 31, 2017 and December 31, 2016:

	March 31, 2017		December 31, 2016
	(in thousands)
Empire Zones real estate tax credit	$	609	$	1,325
Prepaid real estate taxes	981		558
Prepaid insurance	608		919
Inventory	175		177
Prepaid gaming expenses	214		61
Development escrow and security refundable deposit	627		623
Prepaid other	713		672
Total prepaid expenses and other current assets	$	3,927	$	4,335

XML

Property and Equipment Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2017

Property, Plant and Equipment [Abstract]

Property and Equipment

Property and equipment consists of the following:

	March 31, 2017			December 31, 2016
	(in thousands)
Land	$	770		$	770
Land improvements	1,759			1,758
Buildings	4,727			4,727
Building improvements	28,116			28,088
Vehicles	319			307
Furniture, fixtures and equipment	4,374			4,278
Construction in Progress	1,954			919
	42,019			40,847
Less—Accumulated depreciation	(14,767		)	(14,432		)
	$	27,252		$	26,415

XML

Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Mar. 31, 2017

Payables and Accruals [Abstract]

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities, as presented on the Condensed Consolidated Balance Sheet, are comprised of the following:

	March 31, 2017		December 31, 2016
	(in thousands)
Liability for horse racing purses	$	1,244	$	1,139
Accrued payroll	1,058		1,897
Accrued interest payable	3,536		—
Accrued redeemable points	172		167
Liability to NYSGC	142		360
Liability for local progressive jackpot	947		907
Accrued settlement liability	—		758
Accrued professional fees	365		308
Federal tax withholding payable	115		78
Accrued other	928		1,733
Total accrued expenses and other current liabilities	$	8,507	$	7,347

XML

Commitments and Contingencies (Tables)

3 Months Ended

Mar. 31, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Rental Payments for Operating Leases

Fixed rent payments under the Golf Course Lease are represented in the table below:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1)(2)	$0
2018 (2)	0
2019 (2)	125
2020 (2)	150
2021 (2)	150
2022 to 2056 (2) (3)	7,825

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

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

year.

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

Fixed rent payments under the Entertainment Village Lease are represented in the table below:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1)(2)	$0
2018 (2)	50
2019 (2)	150
2020 (2)	150
2021 (2)	150
2022 to 2056 (2) (3)	7,825

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

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

(3) From September 2028 through the remainder of the term of the Entertainment Village Lease, fixed rent will equal $250,000 per year.

The following table represents the future fixed rent payments under the Casino Lease at March 31, 2017:

Year ending December 31,	Fixed Rent Payments due by Period
	(in thousands)
2017 (1) (2)	$9,000
2018 (2) (3)	10,500
2019 (3)	7,500
2020 (3)	7,500
2021 (3)	8,000
2022 to 2056 (3)	354,624

(1) Until February 29, 2016, the Company continued to make payments of $500,000 per month it would have made under the Original Option Agreement (defined below). From March 1, 2016 until February 28, 2017, option payments made by the Company under a certain option agreement, originally executed on December 21, 2011 and last amended on June 20, 2014, which totaled $8.5 million, were applied against fixed rent due by the Company under the Casino Lease for such period.

(2) From March 1, 2017 through August 31, 2018, fixed rent is $1.0 million per month.

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

The following table represents the minimum future lease payments under the Company's operating leases at March 31, 2017:

Payments due by Period
Year ending December 31,	Total Lease Payments
	(in thousands)
2017	$	9,000
2018	10,550
2019	7,775
2020	7,800
2021	8,300
2022 to 2056	370,274
Total	$	413,699

XML

Organization And Nature Of Business - Additional Information (Details) - USD ($)	1 Months Ended	3 Months Ended		12 Months Ended
	Jan. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Dec. 31, 2017	Jun. 30, 2017
Subsequent Event [Line Items]
Assets, Current		$ 13,556,000		$ 17,346,000
Liabilities, Current		57,289,000		51,548,000
Project Development Costs		45,659,000		41,933,000
Operating Income (Loss)		(6,356,000)	$ (4,764,000)
Development Projects expenses		4,269,000	$ 3,067,000
Project Development Costs Eligible to be Capitalized		52,100,000
Development Projects [Member]
Subsequent Event [Line Items]
Property, Plant and Equipment, Expected Financing				40,000,000
Montreign Operating [Member] | Entertainment Village [Member]
Subsequent Event [Line Items]
Deposit Commitment				35,000,000
Scenario, Forecast [Member] | Montreign Operating [Member] | Entertainment Village [Member]
Subsequent Event [Line Items]
Deposit Commitment					$ 20,000,000	$ 15,000,000
Follow-On Rights Offering [Member] | Kien Huat Realty Limited [Member]
Subsequent Event [Line Items]
Agreement to Exercise Additional Rights, Participation Amount				$ 35,000,000
Transferable Subscription Rights [Member]
Subsequent Event [Line Items]
Agreement To Exercise Additional Rights, Proceeds from Offering	$ 286,000,000	$ 393,400,000

XML

Summary of Significant Accounting Policies - Promotional Allowances (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Total retail value of promotional allowances	$ 352	$ 1,068
Total cost of promotional allowances	368	996
Food and Beverage
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Total retail value of promotional allowances	165	360
Total cost of promotional allowances	232	530
Non Subsidized Free Play
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Total retail value of promotional allowances	124	589
Total cost of promotional allowances	73	347
Players Club Awards
Revenue Recognition, Multiple-deliverable Arrangements [Line Items]
Total retail value of promotional allowances	63	119
Total cost of promotional allowances	$ 63	$ 119

XML

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands			1 Months Ended	3 Months Ended
	Mar. 30, 2016	Mar. 01, 2016	Feb. 28, 2017	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accrued Rent				$ 8,500		$ 8,000
Gaming Facility license term (in years)		10 years
Allowance for doubtful accounts				171		$ 171,000
Total unrecognized compensation				$ 1,900
Vesting period for unrecognized compensation cost to be recognized (in years)				2 years 9 months
Other Comprehensive Income (Loss), Derivatives Qualifying as Hedges, Net of Tax, Portion Attributable to Parent				$ (91)	$ 0
Montreign [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Gaming facility license fee	$ 51,000
Interest Rate Cap [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Payments for Derivative Instrument, Investing Activities			$ 675
Derivative, Fair Value, Net				584
Notes Payable to Banks [Member] | Term Loan Facility, Term B Loan [Member] | Montreign Operating [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Line of Credit Facility, Fair Value of Amount Outstanding				414,400
Long-term Line of Credit				$ 415,000

XML

Summary of Significant Accounting Policies - Stock option equivalents (Details) - shares	Mar. 31, 2017	Mar. 31, 2016
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	362,000	406,000
Options [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	31,000	52,000
Warrants [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	133,000	133,000
Option matching rights [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	18,000	22,000
Restricted stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total number of common stock equivalents outstanding (in shares)	180,000	199,000

XML

Prepaid Expenses and Other Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Income Taxes, Tax Credit Program, Number of Years of Participation	10 years
Income Taxes, Tax Credit Program, Refund Reduction Percent	20.00%
Income Taxes, Tax Credit Program, Refund Percent	20.00%
Prepaid Taxes	$ 600	$ 1,300
Real Estate Tax Credit, Current	609	1,325
Prepaid Real Estate Taxes, Current	981	558
Prepaid Insurance	608	919
Inventory, Net	175	177
Prepaid Gaming Expenses, Current	214	61
Escrow Deposit	627	623
Other Prepaid Expense, Current	713	672
Prepaid Expense and Other Assets, Current	$ 3,927	$ 4,335

XML

Property and Equipment Property and Equipment (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2016	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
Property and equipment, gross		$ 42,019		$ 40,847
Less—Accumulated depreciation		(14,767)		(14,432)
Property and equipment, net		27,252		26,415
Depreciation		336	$ 336
Capitalized project development costs		254,500		202,400
Cash for Development Projects		393,353		26,384
Transferable Subscription Rights
Property, Plant and Equipment [Line Items]
Agreement To Exercise Additional Rights, Proceeds from Offering	$ 286,000	393,400
Cash for Development Projects		393,400		26,400
Land [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		770		770
Land Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		1,759		1,758
Building [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		4,727		4,727
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		28,116		28,088
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		319		307
Furniture, fixtures and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		4,374		4,278
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment, gross		$ 1,954		$ 919

XML

Development Project Costs, Cash Collateral for Deposit Bond and Cash for Development Projects (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016	Feb. 29, 2016
Development Costs [Line Items]
Capitalized project development costs	$ 254,500		$ 202,400
Interest Expense	3,700
Project Development Costs Incurred	56,300	$ 44,300
Capitalized Project Development Costs, Period Increase	52,000	41,200
Development Projects expenses	4,269	3,067
Deposit Assets				$ 15,000
Restricted Cash and Cash Equivalents, Noncurrent	393,353		26,384
Land Lease Expense [Member]
Development Costs [Line Items]
Project Development Costs Incurred	2,600	2,600
Salary and Related Benefits [Member]
Development Costs [Line Items]
Project Development Costs Incurred	652
Bank Charges [Member]
Development Costs [Line Items]
Project Development Costs Incurred	353
Pre-opening Expense [Member]
Development Costs [Line Items]
Project Development Costs Incurred	218	113
Professional Services [Member]
Development Costs [Line Items]
Project Development Costs Incurred	35	194
Property Tax Expense [Member]
Development Costs [Line Items]
Project Development Costs Incurred	158	97
Insurance Expense [Member]
Development Costs [Line Items]
Project Development Costs Incurred	143	$ 106
Selling and Marketing Expense [Member]
Development Costs [Line Items]
Project Development Costs Incurred	93
Transferable Subscription Rights [Member]
Development Costs [Line Items]
Restricted Cash and Cash Equivalents, Noncurrent	$ 393,400		$ 26,400

XML

Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands	Mar. 31, 2017	Dec. 31, 2016
Payables and Accruals [Abstract]
Liability for horse racing purses	$ 1,244	$ 1,139
Accrued payroll	1,058	1,897
Accrued interest payable	3,536	0
Accrued redeemable points	172	167
Liability to NYSGC	142	360
Liability for local progressive jackpot	947	907
Accrued Development Projects costs	45,659	41,933
Loss Contingency Accrual	0	758
Accrued professional fees	365	308
Federal tax withholding payable	115	78
Accrued other	928	1,733
Total accrued expenses and other current liabilities	$ 8,507	$ 7,347

XML

Term Loan Agreement and Revolving Credit Agreement (Details) - USD ($)	Jan. 24, 2017	Dec. 31, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016
Term Loan Facility [Member] | Montreign Operating [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Debt Instrument, Borrowing Capacity, Amount	$ 485,000,000
Term Loan Facility, Term A Loan [Member] | Montreign Operating [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Debt Instrument, Unused Borrowing Capacity, Amount	$ 70,000,000
Debt Instrument, Commitment Fee Percent, Through Closing Date	2.50%
Debt Instrument, Commitment Fee Percent, After Closing Date	5.00%
Term Loan Facility, Term A Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Montreign Operating [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	5.00%
Term Loan Facility, Term A Loan [Member] | Base Rate [Member] | Montreign Operating [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	4.00%
Term Loan Facility, Term B Loan [Member] | Montreign Operating [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months				$ 0
Principal amount of promissory note	$ 415,000,000
Long-term Debt				415,000,000
Long-term Debt, Maturities, Repayments of Principal in Year Two				3,113,000
Long-term Debt, Maturities, Repayments of Principal in Year Three				4,150,000
Long-term Debt, Maturities, Repayments of Principal in Year Four				4,150,000
Long-term Debt, Maturities, Repayments of Principal in Year Five				4,150,000
Long-term Debt, Maturities, Repayments of Principal after Year Five				$ 399,437,000
Debt Instrument, Prepayment Premium Percent, Month 30 to Month 42	2.00%
Debt Instrument, Prepayment Premium Percent, Month 42 to Month 54	1.00%
Term Loan Facility, Term B Loan [Member] | London Interbank Offered Rate (LIBOR) [Member] | Montreign Operating [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	8.25%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum	1.00%
Term Loan Facility, Term B Loan [Member] | Base Rate [Member] | Montreign Operating [Member] | Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	7.25%
Senior Secured First Lien Term Loan [Member] | Montreign Operating [Member] | Senior Notes [Member]
Debt Instrument [Line Items]
Debt Instrument, Covenant Terms, Number of Consecutive Days of Gaming License Revocation	7 days
Revolving Credit Facility [Member] | Montreign Operating [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 15,000,000
Revolving Credit Facility [Member] | London Interbank Offered Rate (LIBOR) [Member] | Montreign Operating [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	5.00%
Revolving Credit Facility [Member] | Base Rate [Member] | Montreign Operating [Member]
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate	4.00%
Letter of Credit [Member] | Montreign Operating [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 10,000,000
Casino and Entertainment Village Project [Member]
Debt Instrument [Line Items]
Guaranty Liabilities	$ 30,000,000
Entertainment Village [Member] | Montreign Operating [Member]
Debt Instrument [Line Items]
Deposit Commitment					$ 35,000,000
Scenario, Forecast [Member] | Entertainment Village [Member] | Montreign Operating [Member]
Debt Instrument [Line Items]
Deposit Commitment		$ 20,000,000	$ 15,000,000

XML

Long-Term Loans (Related Party) (Details) - USD ($)				12 Months Ended
	Jan. 24, 2017	Oct. 13, 2016	Feb. 17, 2016	Dec. 31, 2015	Nov. 17, 2010
Debt Instrument [Line Items]
Debt Instrument, Periodic Payment, Principal				$ 17,400,000
Debt Conversion, Converted Instrument, Shares Issued			1,332,058
KH Construction Loan Agreement [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount		$ 50,000,000
Bridge Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount					$ 35,000,000
Montreign [Member] | KH Construction Loan Agreement [Member]
Debt Instrument [Line Items]
Debt Related Commitment Fees and Debt Issuance Costs		$ 500,000
Montreign Operating [Member] | Kien Huat Montreign Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Face Amount	$ 32,300,000.0
Montreign Operating [Member] | Construction Loans [Member] | Kien Huat Montreign Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	12.00%
Debt Instrument, Commitment Fee	1.00%
Debt Instrument, Covenant, Overhead Expenses Maximum	$ 9,000,000

XML

Bryanston Settlement (Details) - USD ($) $ in Thousands		3 Months Ended
	Mar. 07, 2016	Mar. 31, 2017	Mar. 31, 2016
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Interest Expense		$ 3,700
Series E
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Payments for Repurchase of Private Placement	$ 30,700
Redemption of preferred stock	$ 1,500
Mandatorily Redeemable Preferred Stock | Series E
Financial Instruments Subject to Mandatory Redemption by Settlement Terms [Line Items]
Interest Expense			$ 231

XML

Stockholders Equity - Additional Information (Details)									3 Months Ended
	Apr. 03, 2017 USD ($)	Jan. 03, 2017 USD ($)	Oct. 03, 2016 USD ($)	Jul. 01, 2016 USD ($)	Apr. 01, 2016 USD ($)	Mar. 02, 2016 USD ($)	Feb. 17, 2016 USD ($) shares	Jan. 04, 2016 USD ($) shares	Mar. 31, 2017 USD ($) vote_per_stock $ / shares shares	Mar. 31, 2016 USD ($)	Dec. 31, 2016 $ / shares shares	Nov. 01, 2016 $ / shares shares
Class of Stock [Line Items]
Capital Stock, Shares Authorized												155,000,000
Common Stock, Shares Authorized									150,000,000		150,000,000	150,000,000
Common stock, par value (usd per share) | $ / shares									$ 0.01		$ 0.01	$ 0.01
Preferred Stock, Shares Authorized												5,000,000
Preferred Stock, Par or Stated Value Per Share | $ / shares												$ 0.01
Proceeds from Issuance of Common Stock | $							$ 286,000,000.0		$ 0	$ 286,032,000
Dividends, Preferred Stock, Cash | $		$ 32,087,000	$ 32,087,000	$ 32,087,000	$ 32,087
Series B
Class of Stock [Line Items]
Voting Rights Per Stock | vote_per_stock									0.054
Preferred Stock, Shares Outstanding									44,258		44,258
Preferred Stock, Shares Authorized									5,000,000		5,000,000
Preferred Stock, Par or Stated Value Per Share | $ / shares									$ 0.01		$ 0.01
Dividends, Preferred Stock, Cash | $						$ 167,000			$ 167,000
Convertible Preferred Stock, Shares Issued upon Conversion									0.054
Preferred Stock, Liquidation Preference Per Share | $ / shares									$ 29		$ 29
Preferred Stock, Dividends Per Share, Declared | $ / shares									$ 2.90
Dividends, Preferred Stock, Multiplier									1.3
Common Stock [Member]
Class of Stock [Line Items]
Dividends, Preferred Stock, Stock, Price Per Share | $ / shares									$ 3.77
Number Of Trading Days Used For Estimate Of Share Value									20 days
Transferable Subscription Rights [Member]
Class of Stock [Line Items]
Common Stock, Shares Authorized								20,138,888
Sale of Stock, Value of Subscription Rights to be Exercised within Ten Days of Commencement | $								$ 30,000,000
Sale of Stock, Value of Subscription Rights to be Exercised, Maximum | $								290,000,000
Proceeds from Issuance of Private Placement | $							$ 290,000,000
Sale of Stock, Commitment Fee | $								$ 1,450,000
Sale of Stock, Commitment Fee, Percent								0.50%
Common Stock [Member] | Transferable Subscription Rights [Member]
Class of Stock [Line Items]
Shares, Issued							20,138,888
Basic Subscription Rights [Member] | Common Stock [Member] | Transferable Subscription Rights [Member]
Class of Stock [Line Items]
Shares, Issued							176,086
Over Subscription Rights [Member] | Common Stock [Member] | Transferable Subscription Rights [Member]
Class of Stock [Line Items]
Shares, Issued							13,136,817
Kien Huat Realty Limited [Member] | Common Stock [Member] | Standby Purchase Agreement [Member]
Class of Stock [Line Items]
Shares, Issued							6,825,985
Expense Reimbursement [Member] | Kien Huat Realty Limited [Member]
Class of Stock [Line Items]
Related Party Transaction, Amounts of Transaction | $							$ 50,000
Subsequent Event [Member]
Class of Stock [Line Items]
Dividends, Preferred Stock, Cash | $	$ 32,087

XML

Concentration (Details) - Accounts Receivable - Credit Concentration Risk - debtor	3 Months Ended	12 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Concentration Risk [Line Items]
Number of debtors	1	1
Woodbine Entertainment Group [Member]
Concentration Risk [Line Items]
Concentration of risk	10.80%
Hawthorne OTB
Concentration Risk [Line Items]
Concentration of risk		16.90%

XML

Commitments and Contingencies (Details) - USD ($)			2 Months Ended	3 Months Ended	12 Months Ended	18 Months Ended	460 Months Ended
	Jan. 04, 2017	Dec. 28, 2015	Feb. 29, 2016	Mar. 31, 2017	Feb. 28, 2017	Aug. 31, 2018	Dec. 31, 2056
Loss Contingencies [Line Items]
Stock Issued During Period, Shares, Issued for Services	33,333
Litigation Settlement, Amount	$ (758,000)
Operating Leases, Future Minimum Payments Due, Next Twelve Months				$ 9,000,000
Operating Leases, Future Minimum Payments, Due in Two Years				10,550,000
Operating Leases, Future Minimum Payments, Due in Three Years				7,775,000
Operating Leases, Future Minimum Payments, Due in Four Years				7,800,000
Operating Leases, Future Minimum Payments, Due in Five Years				8,300,000
Operating Leases, Future Minimum Payments, Due Thereafter				370,274,000
Operating Leases, Future Minimum Payments Due				413,699,000
Purchase Option Price, After Credit		$ 175,000,000
Purchase Option Price, Before Credit		200,000,000
Purchase Option Price, Credit		$ 25,000,000
Entertainment Village Lease [Member]
Loss Contingencies [Line Items]
Operating Leases, Future Minimum Payments Due, Next Twelve Months				0
Operating Leases, Future Minimum Payments, Due in Two Years				50,000
Operating Leases, Future Minimum Payments, Due in Three Years				150,000
Operating Leases, Future Minimum Payments, Due in Four Years				150,000
Operating Leases, Future Minimum Payments, Due in Five Years				150,000
Operating Leases, Future Minimum Payments, Due Thereafter				7,825,000
Operating Leases, Annual Fixed Rent, Before Opening				0
Operating Leases, Annual Fixed Rent, First Ten Years				150,000
Operating Leases, Annual Fixed Rent, After Ten Years				250,000
Golf Course Lease [Member]
Loss Contingencies [Line Items]
Operating Leases, Future Minimum Payments Due, Next Twelve Months				0
Operating Leases, Future Minimum Payments, Due in Two Years				0
Operating Leases, Future Minimum Payments, Due in Three Years				125,000
Operating Leases, Future Minimum Payments, Due in Four Years				150,000
Operating Leases, Future Minimum Payments, Due in Five Years				150,000
Operating Leases, Future Minimum Payments, Due Thereafter				7,825,000
Operating Leases, Annual Fixed Rent, Before Opening				0
Operating Leases, Annual Fixed Rent, First Ten Years				150,000
Operating Leases, Annual Fixed Rent, After Ten Years				250,000
Casino Lease [Member]
Loss Contingencies [Line Items]
Operating Leases, Monthly Fixed Rent			$ 500,000
Operating Leases, Future Minimum Payments Due, Next Twelve Months				9,000,000
Operating Leases, Future Minimum Payments, Due in Two Years				10,500,000
Operating Leases, Future Minimum Payments, Due in Three Years				7,500,000
Operating Leases, Future Minimum Payments, Due in Four Years				7,500,000
Operating Leases, Future Minimum Payments, Due in Five Years				8,000,000
Operating Leases, Future Minimum Payments Due				$ 354,624,000
Operating Lease, Option Payment Total					$ 8,500,000
Operating Leases, Annual Rent, Percent of Gaming Revenue in Excess of $150,000,000				5.00%
Scenario, Forecast [Member] | Casino Lease [Member]
Loss Contingencies [Line Items]
Operating Leases, Annual Fixed Rent						$ 1,000,000	$ 7,500,000
Operating Lease, Annual Fixed Rent, Escalation Percent Increase Every Five Years							8.00%

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Related Party Transactions (Details) - USD ($)	Mar. 07, 2017	Jan. 24, 2017	Feb. 10, 2016
Director
Related Party Transaction
Professional Fees		$ 2,500,000	$ 2,100,000
Montreign Operating [Member] | Moelis [Member]
Related Party Transaction
Professional Fees	$ 100,000
Professional and Contract Services Expense	$ 75,000