Too Many Bets Placed on Empire Resorts

All Money on the Table

Since no Wall Street analysts cover Empire Resorts, TheStreet.com took a stab at estimating how much value the Catskills project will add to the company.

If the land transfer is approved, our estimate says Empire Resorts' stock is worth between $12 and $13 a share. Empire closed Friday at $11.86.

That means Empire is trading near full value, despite the slight risk of the casino project not getting final approval from the federal government.

All of Empire's current profits come from Monticello Raceway, which offers horse racing and video lottery terminals. The company reported a net loss last year, but posted earnings before interest, taxes, depreciation and amortization of $5.5 million for its trailing 12 months.

If the Catskills casino project is approved, Empire will collect a management fee for running the casino site for the Mohawk tribe. Although the exact agreement hasn't been finalized, the proposed structure is a seven-year management contract that would entitle Empire to receive 30% of the net income from the property.

Since the tribe would not pay taxes -- aside from paying out about 25% of the slot revenue to the state -- an EBITDA number for the property will approximate net income, Empire says.

The company projects the casino will have 125 table games and 3,500 slots, with the capacity to add another 500 slots.