Another step closer
MGM Resorts International is inching ever closer to finalizing the acquisition of The Cosmopolitan casino resort in Las Vegas. The Nevada Gaming Control Board (NGCB) gave its seal of approval for the deal on Wednesday following a hearing.
MGM plans to initially pay an annual rent of $200m
MGM is acquiring the operations of the well-known property for $1.6bn from the Blackstone Group. A group of investors is buying the real estate on which the property lies, which brings the total value of the sale up to $5.65bn. MGM plans to initially pay an annual rent of $200m on a 30-year lease.
The next step for the deal is a Nevada Gaming Commission hearing on May 19. MGM Resorts COO Corey Sanders has confirmed he expects the deal to reach completion by the end of May. He also asserted that the deal will result in significant synergies, with most back-of-house functions eventually consolidating into MGM’s systems.
Speaking to the NGCB during the hearing on Wednesday, MGM Resorts CEO Bill Hornbuckle expressed excitement over The Cosmopolitan acquisition. He described it as a “great property that’s well branded and well run,” adding: “They have taken it from a meager beginning to a powerhouse in Las Vegas.”
Some NGCB executives raised concerns that MGM would secure too much of Las Vegas’ market share as a result of the acquisition. However, MGM Resorts’ senior management reassured the executives that the company will soon sell The Mirage, leaving it with fewer properties on the Strip than it had over the previous decade.
Some changes on the way
MGM agreed to The Cosmopolitan deal in September last year. Assuming the acquisition goes through, The Cosmopolitan will retain its own management team. Staff at the property will also have opportunities for employment at other MGM properties in Las Vegas and elsewhere. MGM Resorts does not expect the deal to create any negative impact on the current employees at The Cosmopolitan.
BetMGM will take over sportsbook operations
The sports betting operations at The Cosmopolitan will end for about 90 days following the acquisition. William Hill is the property’s current sportsbook operator. However, BetMGM will take over sportsbook operations following the completion of the deal.