MGM Resorts International (MGM) agreed to sell two of their Las Vegas Strip casino properties on Tuesday, adding about $5 billion to the balance sheet while positioning the company for international growth and sports betting expansion in the states.
The gaming giant has sold Bellagio to Blackstone Group Inc. (BX), a real estate investment trust, for a reported $4.25 billion. MGM will continue to operate the resort while leasing the property, also retaining a five percent stake in Blackstone.
Additionally, MGM also officially pulled the trigger on the sale of Circus Circus, which goes to real estate tycoon and poker enthusiast Phil Ruffin for $825 million. That deal for the 60-acre property was reportedly agreed to in principle mid-September.
Despite rumors and interest from Blackstone, MGM will hold on to their flagship MGM Grand Casino for now.
“The casino industry is evolving and we figured the best use of our intellectual capital was to focus on sports, live entertainment and reduce leverage,” said MGM Chairman and CEO Jim Murren.
In 2016, MGM bought out Boyd Gaming’s half of the Borgata Casino in Atlantic City and then sold it to MGP for $1.2 billion, only to lease it back for $100 million annually. In 2018, the company sold the Grand Victoria Casino in Illinois, and earlier this year, MGM bought the Empire City Casino in New York, only to sell it to MGP and lease it back as well.
“MGM Resorts has engaged in an exhaustive process to evaluate its owned real estate. The Company expects to utilize the proceeds from this transaction to enhance its capital allocation strategy and complement its strategic and operational flexibility.”
MGM Resorts operates casinos in Mississippi, Michigan, Maryland, Ohio, and Massachusetts in the United States, as well as in Macau. The company has spent the last few years expanding their sports betting offerings in the wake of Supreme Court’s decision to overturn the Professional and Amateur Sports Provision Act (PASPA). MGM has deals in place with most of the major sports leagues.
New York-based Blackstone also purchased The Cosmopolitan Casino in 2014 for $1.73 billion.
Ruffin, who started his Las Vegas career when he bought the New Frontier Casino in 1998, also owns Treasure Island. The poker enthusiast bought it in 2009, also from MGM, and reportedly turned down a large offer for it, instead focusing on acquiring more assets.
“Circus Circus has anchored the north end of the Las Vegas Strip for over 50 years, and I am excited to add it to my casino portfolio,” Ruffin said in a statement.