MGM Resorts International announced two blockbuster moves in just over a month. Could the company’s plan to buy The Cosmopolitan of Las Vegas for $1.625 billion and sell The Mirage be characterized by a simple compromise: ditching the portfolio’s oldest strip property and replacing it with just a 10-year-old resort?
Analysts Brendan Boothman said many consumers had thought Cosmopolitan was an extension of the city center’s development because of its proximity. Considering Cosmopolitan’s database would be younger than MGM’s, Cosmopolitan would certainly fit into the MGM portfolio and introduce a younger demographic to the company.
As for Mirage, MGM management acknowledged that the sale plan announced last week was in a very early stage. 온라인경마
The two moves appear to be more likely to grow with the northern end of Resort World Las Vegas open and planned resorts in Fontainebleau and Claudio Fisher open in the coming years, but MGM seems content to dominate the southern end of the strip.
Fischer is a resort developer in South America who signed a $120 million contract for 10 acres of strip-front property where Riviera once stood.
MGM’s Mirage news came during the company’s earnings conference call. The day after MGM’s call, Penn National spoke directly with investors with Jay Snowden, the president, CEO, and director, and his company said having a property on the strip is not necessarily a formula for success.
On the call, Snowden was clearly disappointed that Penn had not won the bid for Cosmopolitan, saying it was “a once-in-a-lifetime opportunity for the best asset.” However, he said Penn did not need the presence of Streep to succeed.
Is Snowden’s omission from the Cosmopolitan deal justified, or can a big company like Penn be a big player in gaming without a strip address?
I think it’s the latter for Penn.
The company is North America’s largest regional gaming operator, with 43 properties, 50,000 slot machines, 1,300 table games, and 8,800 hotel rooms in 20 states. The company expects properties to get even bigger in the coming weeks when they open in Ontario, Canada.
Penn operates M Resort in Henderson, but is moving away from the management role of Tropicana, which Bally will take over.
A similar local gaming company is Boyd Gaming Inc., which does not have a strip but operates in downtown Las Vegas, with 28 properties in downtown Las Vegas with 21,400 slot machines, 425 table games and 7,550 hotel rooms.
“Las Vegas is and will continue to be one of the game capitals of the world, and businesses want to be a part of Las Vegas in some way, but it has to be the right terms,” Bushman said. “It has to fit the current portfolio and the right price. It’s clichéd but timing is everything.”
Bushman said Snowden’s comments could be seen as contradicting the theory that being a player requires being on a strip.
“They obviously have a dominant presence across the United States and there’s also sports betting to add to existing brick-and-mortar facilities,” he said. “It’s about finding the right opportunity for your portfolio at the time, which will happen if the timing is right for Penn.”