Las Vegas is going through an interesting time right now. Recently, several major casino operators here have committed to selling some of their biggest properties. MGM Resorts announced its Bellagio sale last week, which is said to be the biggest of any resort in Las Vegas.
The Bellagio Hotel & Casino was once the world’s greatest casino-resort. Its sale came as a huge surprise for many individuals. Today, we’re going to look at the history of this amazing hotel-casino, and talk about why exactly it was sold.
History of the Bellagio Hotel & Casino
In the 1990s, several major Las Vegas gambling venues opened their doors. None were as grandiose and exciting as the Bellagio Hotel & Casino. This venue first underwent construction in 1996 and officially opened to the public towards the end of 1998. It cost more than $1.6 billion to construct, which at the time meant it was the most expensive hotel ever built.
The Bellagio quickly exploded in popularity. It had some of the most expensive rates in the city, yet everyone wanted to stay here. This venue managed to bring in massive revenue earnings and was considered the hottest property on the Las Vegas Strip.
Of course, not everything lasts forever. Over the past decade, several new hotel-casinos have opened here that have somewhat taken away the Bellagio’s shine. Despite this fact, it’s still an incredible hotel-casino and one that continues to bring in massive revenue earnings every single year.
MGM Resorts International has discussed plans to sell some of its Las Vegas properties for years. Many felt that if any were sold, it would be the smaller, less popular venues located on the Strip.
Interestingly, officials within MGM confirmed last week that the Bellagio was being sold to the Blackstone Group.
MGM’s Bellagio Sale is the Biggest Ever Made in Las Vegas
The Blackstone Group has shown a major interest in purchasing major Las Vegas hotel-casinos. MGM Resorts International confirmed that they’d sold the Bellagio to this company for an astounding $4.2 billion. This makes it the biggest of any resort sale in Las Vegas history.
The terms of the Bellagio sale are very interesting. Blackstone Group will actually begin leasing the casino-resort back to MGM for an annual rent of $245 per year. MGM will also retain a 5% ownership stake in the hotel.
The second-largest casino sale in Las Vegas doesn’t even come close. In 2014, the Cosmopolitan Hotel & Casino was sold to Blackstone Group, as well. It cost them just $1.73 to purchase this venue.
Such a high price is expected for a hotel-casino as successful as the Bellagio. This venue generated more than $405 million in operating income last year. It’s showing no signs of slowing down, either.
MGM Chairman and CEO Jim Murren believes that selling properties will help the company “redeploy capital to higher-return investments.”
The Bellagio sale may not be the only major one taking place on the Las Vegas Strip.
More Las Vegas Strip Property Sales Could be Coming
MGM Resorts clearly feels that major property sales are the best course of action right now. Also last week, the company announced that it had sold the Circus Circus Hotel & Casino to Phil Ruffin, owner of Treasure Island. The sale earned MGM $825 million.
It’s unclear whether or not MGM Resorts International plans to get rid of any additional Las Vegas properties. Officials in the company seem committed to obtaining an elusive Japanese casino license.
Caesars Entertainment may soon announce another Las Vegas property sale. Earlier this year, Caesars agreed to merge with Eldorado Resorts. It’s the largest merger in US casino company history.
Heads of Caesars Entertainment claim they’re interested in selling properties. Last month, Caesars sold the Rio Hotel & Casino. It’s still possible for a major Caesars Strip property to go up for sale.
The Bellagio sale is the biggest in Las Vegas history. Make sure to stay tuned for more Las Vegas casino news over the next few months!