NY casino license withdrawal positive for MGM Resorts, says Morgan Stanley

After MGM Resorts (MGM) announced yesterday that the company is withdrawing from consideration for the New York downstate casino license process, Morgan Stanley calls the withdrawal “a net positive” for MGM, noting that it provides more capital allocation flexibility and theoretically frees up $500M for a fee plus the incremental $1.8B of capex MGM would have incurred over the next roughly two years of construction. In addition, the withdrawal could push the state to look for more tax revenue elsewhere and iGaming could provide a potential solution, making the news “a secondary positive” for Flutter Entertainment (FLUT) and DraftKings (DKNG), the analyst tells investors. the firm maintains an Equal Weight rating and $43 price target on MGM shares.