One of the most famous hotel-casinos in Las Vegas may soon be going up for sale. MGM Resorts International is in talks to sell Circus Circus in Las Vegas to Phil Ruffin. If the deal goes through, it will be one of the largest casino sales in recent memory.
MGM Resorts has been considering selling some of its Las Vegas properties for months. Let’s take a quick look at why this company may put Circus Circus up for sale, and why Phil Ruffin is interested in buying it.
MGM Resorts Looking for Ways to Earn Money Through Real Estate Sales
MGM Resorts International, one of the biggest and most profitable casino companies in the United States, is having an interesting year. For much of 2019, company officials have worked on ways to earn one of the elusive Japanese casino licenses set to be handed out. Recently, MGM has also begun looking to sell some of its properties as a way to generate revenue.
This company owns the most Las Vegas Strip properties currently operating. Some of the biggest casinos in the world are controlled by MGM Resorts, including the Bellagio, the Mirage, and Luxor. Most of these casinos help to generate millions of dollars in revenue every single month.
Interestingly, MGM is now considering putting some of these Las Vegas Strip properties up for sale. Jim Murren, CEO of MGM Resorts International, believes that many of these properties are undervalued. Blackstone Group, an investment firm out of New York, expressed an interest in purchasing some of MGM’s hotel-casinos.
For a time, it looked like MGM was going to put the Bellagio and MGM Grand up for sale. This week, reports have surfaced that indicate Circus Circus in Las Vegas may be going up for sale. MGM appears to already have a buyer in mind, as well.
Phil Ruffin Could Purchase Circus Circus in Las Vegas
According to Bloomberg, MGM Resorts is in talks to sell Circus Circus to real estate mogul Phil Ruffin. Pressure from investors may be the primary reason behind this sale. MGM is currently in the middle of a major restructuring process to bring in more revenue.
Circus Circus was once considered one of the top casinos in Las Vegas. Today, it’s one of the lower-earners in the city, partly due to its undesirable location in the north area of the Strip. It’s not much of a surprise to see MGM Resorts working to sell this property.
This won’t be Phil Ruffin’s first Las Vegas casino purchase. In 2009, he bought the Treasure Island casino from MGM for $746 million. Ruffin’s company helped to renovate and expand this casino.
The details of this sale are unknown. MGM Resorts has not yet stated how much the Circus Circus casino will be sold for.
Tourism Numbers Are Up in Las Vegas
For much of 2018, Las Vegas casinos struggled to generate revenue. Overall tourism in the city was down and gambling revenue was falling. Fortunately, things began to turn around this year.
During the first six months of 2019, Las Vegas experienced a massive increase in the number of tourists compared to 2018. In August, hotel occupancy in the city was at 89.3%. It was the highest rate since 2007.
The rise in tourism has also helped to bring in more money to the city’s casinos. In June, gambling revenue increased by a staggering 17.7% from the same month last year. For many, the increase in gambling revenue was a surprise considering the rise in competition around the country.
Many states are actively working to expand their casino operations. Illinois, Pennsylvania, and New York have all recently passed bills to add more casinos. Sports betting is also now legal in these states. Some believe that with more gambling options around the country, Las Vegas will begin to see its tourism numbers drop. As of now, this is not the case.
We’ll need to wait and see how long it takes for the sale of the Circus Circus in Las Vegas to go through. Make sure to stay tuned for updates over the next few weeks!