Last week, news broke that MGM Resorts International had agreed to sell the MGM Grand and Mandalay Bay Casino-Resort. It wasn’t entirely surprising, as the company has been involved in several major sales over the past few months. The Mandalay Bay sale comes at an interesting time, though.
A little over two years ago, this popular hotel-casino was the sight of the worst mass shooting in US history. Fortunately, the venue is moving past this tragedy. Today, we’re going to look at why exactly MGM Resorts decided to put this property up for sale.
Let’s get into it!
MGM Resorts Continues to Sell Major Las Vegas Properties
A decade ago, it was fairly uncommon for major US casino operators to sell any properties on the Las Vegas Strip. This area is home to many of the most lucrative gambling venues in the world and not many companies are willing to put them for sale. In recent years, however, these sales are becoming much more common.
This is especially true with MGM Resorts International. The Las Vegas-based casino company has sold some of its biggest venues over the past several months. It’s an interesting trend that other companies are taking notice of.
In October of 2019, MGM officially sold The Bellagio to the Blackstone Group for an astounding $4.2 billion. It was the largest sale in Las Vegas casino history. MGM Resorts is now leasing the property back for $245 million per year.
The company also sold Circus Circus, one of its worst-performing venues in Las Vegas. It went to Phil Ruffin, who plans to renovate the old hotel-casino. As we’ve already mentioned, MGM Resorts recently announced that several more venues are being let go.
Both Mandalay Bay and MGM Grand are being sold. Rumors have circulated over the sale of these venues for months.
Many are happy that the Mandalay Bay sale is officially taking place. It comes a little over two years since the horrific shooting that took place from inside this venue. It appears that things are finally back to normal at this southern-strip property.
The Mandalay Bay Sale is Officially Moving Forward
For MGM Resorts International, Mandalay Bay is one of the most important properties in Las Vegas. Since opening in 1999, its been a serious money-maker for the company. In the wake of the 2017 shooting, however, business slowed down considerably here.
MGM Resorts chose not to change the name of this venue. They worked to move through this tragedy, rather than around it. This proved to be a smart decision. Before long, it was once again one of the most profitable casino-resorts on the Las Vegas Strip.
Officials within the company now feel it’s the perfect time to sell this venue. That doesn’t mean they’re saying goodbye forever, though. The Mandalay Bay sale is similar to the Bellagio sale in that it will be leased back over the next few years.
MGM Resorts and the Blackstone Group have formed a new joint venture to control these venues. MGM will hold 50.1% of the venture. The Blackstone Group holds the other 49.9%.
Not everyone is rejoicing at this new sale-heavy approach from MGM Resorts. Some feel that it’s not fair to the company’s employees, many of whom have been let go. Is there some validity to these complaints?
Are More MGM Sales On the Horizon?
At this point, anything is possible. MGM Resorts has already sold some of its most profitable venues. It all comes as part of their new cost-cutting strategy. The money they’re earning from these sales is also going towards investments overseas.
In 2018, officials in Japan officially legalized casino gambling. Soon, three major casino-resorts will begin operating in this country. Unsurprisingly, all of the top US casino companies are pushing to obtain a Japanese casino license.
MGM Resorts wants to ensure that they have the necessary capital on hand to construct a new integrated resort in Japan. The Mandalay Bay sale will certainly help with this. The property is being valued at more than $2 billion.
It’s certainly that officials in MGM Resorts decide to sell more venues. The strategy of leasing these properties back is working well. Exactly which casinos may be sold is still unknown.
Mandalay Bay has gone through a lot over the past few years. Fortunately, the future looks bright for this casino-resort.
Stay tuned for more Las Vegas casino news over the next few months!