MGM Resorts International operates various destination resorts in Las Vegas, Massachusetts, Michigan, Mississippi, Maryland, Ohio, and New Jersey, such as Bellagio, Mandalay Bay, MGM Grand, and Park MGM. Established in 1987 as MGM Grand, Inc., the company acquired Mirage Resorts in 2000 and became MGM Mirage. In the mid-2000s, MGM Mirage shifted its focus from owning and operating resorts and casinos to developing and building real estate in the leisure and gaming industry, launching the enormous CityCenter mixed-use project. This coincided with the global financial crisis, causing significant losses. Until 2009, billionaire investor Kirk Kerkorian and his Tracinda Corporation were the majority shareholders of MGM Mirage. In 2010, the company changed its name to “MGM Resorts International” following a shareholder vote. In 2015, the company split into two, with MGM Growth Properties forming as a real estate company, while MGM Resorts shifted its focus to operating properties.
In 2013, Foxwoods and MGM ended their relationship, and the MGM Grand at Foxwoods was renamed the Fox Tower. On May 1, 2014, the company broke ground on the $375-million T-Mobile Arena located behind New-New York Hotel and Casino, in partnership with AEG Live. The arena opened on April 6, 2016. In September 2014, MGM purchased the naming rights for a new baseball stadium in Biloxi, resulting in MGM Park. That same year, the Massachusetts Gaming Commission approved a license for MGM Springfield, an $800-million project.
MGM sold several properties in 2015, including the Railroad Pass Casino, the Gold Strike, and properties in Reno (Circus Circus Reno and a 50 percent stake in the Silver Legacy) were sold to Eldorado Resorts for $72.5 million.
In April 2016, MGM sold The Shops at Crystals, a high-end mall attached to CityCenter. MGM sold the mall to Invesco Real Estate and Simon Property Group for $1.1B. Notable tenants included Louis Vuitton, Gucci, Dolce & Gabbana, Tom Ford, Prada, Fendi and Tiffany & Co.
In April 2016, MGM held an initial public offering for MGM Growth Properties (MGP), a new real estate investment trust (REIT) with ownership of ten of the company’s casinos; the parent company would continue to operate the casinos under a lease agreement. The offering raised $1.05 billion, and left MGM Resorts with 76 percent ownership of the REIT. In June 2016, MGM announced a joint venture with Sydell Group to renovate and rebrand the Monte Carlo as the Park MGM, named after the adjacent dining and entertainment district, The Park, which opened in April 2016. In August 2016, MGM bought out Boyd Gaming’s interest in the Borgata for $900 million, and then sold the property to MGP for $1.2 billion and leased it back for $100 million per year.
In 2017, MGM launched two online ventures under the PlayMGM brand: an online sportsbook in Nevada, and an online casino in New Jersey. In October 2017, MGM purchased the San Antonio Stars of the Women’s National Basketball Association. The team was moved to Mandalay Bay Events Center and began play as the Las Vegas Aces in 2018. In August 2018, MGM and Hyatt sold the Grand Victoria Casino to Eldorado Resorts for $328 million. In January 2019, MGM bought Yonkers Raceway and Empire City Casino in New York from the Rooney family for $850 million, and then immediately sold the land and buildings to MGP for $625 million and leased them back for $50 million per year.
In 2018, MGM Resorts signed a gaming partnership with NFL team the New York Jets.
in 2019, MGM sold two resorts on the Las Vegas strip: Bellagio and Circus Circus. They sold their real estate assets of Bellagio to Blackstone Group while selling Circus Circus to Phil Ruffin. In 2020, they sold their real estate assets of MGM Grand and Mandalay Bay to a joint venture between Blackstone and MGM growth properties.
in 2021, they bought 50% of Dubai world’s share of city center and sold the real estate assets of Aria and Vdara to Blackstone and later purchased the operating assets of Cosmopolitan of Las Vegas and later sold the Mirage to Hard Rock International.
In August 2020, MGM cut 18,000 job positions as a result of the effects of the COVID-19 pandemic. The job cuts represent one fourth of its workforce, which before the start of the pandemic was 68,000. MGM lobbied the Trump administration against giving federal approval for a casino operated by two native tribes in East Windsor, Connecticut. The casino would have provided competition to a MGM casino across the border in Massachusetts.
History of MGM
In 1986, under Kerkorian’s Tracinda Corporation, the predecessor to MGM Resorts International was established as Grand Name Co. and later renamed MGM Grand, Inc. in 1987. The company’s initial endeavour was MGM Grand Air, a high-end airline servicing the New York to Los Angeles route, which was launched in September 1987. While the company offered to acquire the financially struggling Pan American World Airways, their proposal was rejected by Pan Am’s board in November 1987. In August of the same year, MGM Grand made a bid for the bankrupt Dunes Hotel in Las Vegas for $152 million but was unsuccessful as Japanese billionaire Masao Nangaku outbid them. Instead, MGM Grand acquired the Desert Inn and Sands casinos in February 1988 from Summa Corporation for $167 million, and in April 1989, the Sands was sold to Sheldon Adelson’s Interface Group for $110 million.
In September 1989, MGM Grand announced plans for a Hollywood-themed complex that would feature a 4,000-room hotel and a theme park with an estimated cost of $700 million. The Desert Inn was initially considered as the site for the project, but MGM Grand later settled on the Marina Hotel and Casino and the Tropicana Country Club, which it purchased for $93 million plus $30 million in stock. The company put the Desert Inn up for sale to focus on the new project but was unable to find any outside buyers. Tracinda later agreed to purchase the Desert Inn for $130 million. Construction on the MGM Grand Las Vegas and the MGM Grand Adventures theme park commenced in October 1991, and the property opened in December 1993, with the final cost exceeding $1 billion. The theme park, however, was permanently closed in 2002 due to a lack of interest.
In July 1992, the company relocated its headquarters from Beverly Hills to Las Vegas. During the construction of the MGM Grand, the company acquired an option to buy an 18-acre site across the street from the project. In 1994, Gary Primm of Primadonna Resorts proposed the idea of a casino recreating the New York skyline on the site. The two companies formed a joint venture, and construction began in March 1995, resulting in the completion of the New York-New York Hotel and Casino at a cost of $460 million in January 1997.
As New York-New York was under development, MGM Grand sought to expand into several other markets. The company considered building a hotel in Darwin, Australia, but instead bought the Diamond Beach Hotel and Casino, renaming it as the MGM Grand Darwin. MGM also announced plans for an Atlantic City casino in July 1996, and in Michigan, it made plans to bid on one of the three available gaming licenses, which was eventually approved and opened in July 1999 as the MGM Grand Detroit.
In South Africa, where casino gambling had been newly authorized, MGM announced plans in August 1996 to develop 15 properties in partnership with Tsogo Sun. The first, a temporary casino in Johannesburg’s Sundome, opened in October 1998, and three more followed before MGM agreed to sell its interest in the properties to Tsogo Sun in November 2001.
Rather than buying out each other’s interest in the New York-New York project, MGM agreed to buy Primadonna outright for $276 million in stock plus $336 million in assumed debt. The merger closed in March 1999, giving MGM ownership of three casinos and two golf courses at the Nevada–California state line, in addition to full control of New York-New York.
In February 2000, MGM Grand made an unsolicited offer of $17 a share to buy Mirage Resorts, which was struggling due to disappointing results at its new Beau Rivage and Bellagio resorts. Mirage rejected the offer, but after negotiations, the two companies agreed on a higher price of $21 a share, resulting in a total of $4.4 billion plus $2 billion in assumed debt. The merger closed in May 2000, and the company changed its name to MGM Mirage, giving it ownership of several casinos in Las Vegas, Laughlin, Mississippi, and Atlantic City. The company also had a half share of the Monte Carlo and the Borgata, a planned casino in Atlantic City, in a joint venture managed by Boyd Gaming.
Following the merger, the company explored options for its next major development project in various markets, including Las Vegas, Atlantic City, Chicago, and Macau. The Boardwalk casino site in Las Vegas was earmarked for a technologically advanced megaresort, while in Atlantic City, MGM shifted focus to a proposed billion-dollar hotel and casino on a 55-acre tract adjacent to the Borgata. In the Chicago market, MGM agreed to pay $600 million to buy the unfinished Emerald Casino in Rosemont, Illinois, but the deal was rejected by state gaming regulators. In Macau, MGM submitted a bid for one of three available gaming concessions, but it was not selected.
Following a 2001 government report calling for a relaxation of UK gambling regulations, MGM expanded into the UK market by opening an online casino, playmgmmirage.com, licensed in the British dependency of the Isle of Man, and applying for a license to run an online sports betting site in the UK. MGM also acquired a 25% stake in a company developing the Triangle Casino in Bristol, which opened in February 2004. Additionally, MGM signed deals to build casinos in various locations across the UK. However, MGM’s British expansion plans ultimately fell through. The company closed its online casino after less than two years due to regulatory uncertainty and competition from established UK brands. The Wembley acquisition turned into a bidding war, with MGM losing out to an investors group. The Triangle Casino was sold to Stanley Leisure, and the company’s other development plans were scuttled when the government abandoned its plan to allow large “super-casinos.” MGM also disposed of some of its smaller properties in 2004, selling the two Golden Nugget casinos and the MGM Grand Darwin. In early 2004, MGM entered into merger talks with Mandalay Resort Group, which resulted in a $7.9 billion deal. The acquisition gave MGM control of more than half the hotel rooms on the Las Vegas Strip, low-end casinos like Excalibur and Circus Circus, the Mandalay Bay Convention Center, and at least two prime developable sites on the Strip. The merger faced regulatory hurdles in Michigan and Illinois, but eventually gained approval, and the sale closed on April 25, 2005.
MGM Mirage became the largest gaming company in the world after acquiring Mandalay, but their reign was short-lived as Harrah’s Entertainment overtook them just two months later by acquiring Caesars Entertainment, which was fuelled by news of the MGM-Mandalay merger.
Although MGM initially failed to obtain a gaming concession in Macau, they remained interested in the market. Rumours of a partnership with Stanley Ho surfaced in 2003, but Nevada gaming regulators blocked the idea due to allegations of organized crime triad involvement in his casinos. In 2004, MGM formed a joint venture with Pansy Ho, Stanley’s daughter, to develop a casino-hotel under a sub-concession from Stanley. Despite concerns about Pansy Ho’s alleged susceptibility to her father’s influence, the partnership was eventually approved by the Nevada Gaming Commission. Construction of the MGM Grand Macau commenced in June 2005 and was completed in December 2007 at a cost of $1.25 billion.
MGM also announced plans for Project CityCenter, a high-density project on the Strip with an estimated cost of $8 billion, in 2004. The Boardwalk was closed in January 2006 to make way for the redevelopment, and CityCenter construction began in June of that year.
Singapore emerged as a new Asian gaming market in 2004, and MGM partnered with CapitaLand in a bid for the Marina Bay site. Their bid advanced to the final stage against three competitors but ultimately lost to Las Vegas Sands.
In 2006, MGM announced a joint partnership with Foxwoods Resort and Casino to develop an expansion plan that would include a casino using the MGM Grand brand. They also sold their properties in Laughlin and Primm Valley Resorts. The Nevada Landing Hotel and Casino closed earlier than planned in March 2007.
Finally, in April 2007, MGM announced the purchase of two sites, totalling 33.4 acres, for $574 million. The acquisition gave the company complete control of the southwest corner of the Sahara and Las Vegas Boulevard intersection, which, when combined with underused parts of the Circus Circus site, created a 68-acre plot for future development. The Concord site was previously proposed as the location for the Maxim Casino.
Dubai World announced on August 22, 2007, its plan to purchase a 9.5 percent stake in MGM for $2.4 billion and a 50 percent stake in MGM’s CityCenter project for $2.7 billion. An additional $100 million would be paid to MGM Mirage if the project was completed on time and on budget. The investment firm would acquire 14.2 million shares from MGM Mirage and issue a public tender for another 14.2 million shares at the same price.
However, on October 29, 2008, MGM Mirage halted its $5 billion Atlantic City project adjacent to the Borgata. Meanwhile, New Jersey gambling regulators were assessing MGM Mirage’s suitability to operate casinos in New Jersey, and were not convinced that Pansy Ho, MGM Mirage’s Macau partner, could operate independently of her father Stanley Ho’s influence. Stanley Ho was suspected of having ties to Chinese organized crime and allowing gangs to operate in his casinos’ VIP rooms. As a result, MGM Mirage chose to divest the Borgata in order to comply with New Jersey gaming regulations and continue to pursue the lucrative Chinese market. MGM Mirage transferred its 50% share in the Borgata to a divestiture trust, which it had the right to direct during the first 18 months, and which was responsible for selling MGM’s interest within 30 months.
On December 16, 2008, MGM Mirage sold its Las Vegas Treasure Island resort and casino to billionaire Phil Ruffin for $600 million in cash plus a $175 million promissory note. On March 23, 2009, Dubai World and Infinity World filed a lawsuit in the Delaware Chancery Court seeking release from their CityCenter joint venture agreement with MGM Mirage after the company expressed doubt about its ability to continue as a going concern in its annual report and provide assurance that its business would generate sufficient cash flow from operations.
Starting on April 6, 2009, news reports emerged that Morgan Stanley was assisting MGM Mirage in finding potential buyers for the MGM Grand Detroit and the Beau Rivage. On June 15, 2010, shareholders approved a name change from MGM Mirage to “MGM Resorts International” to highlight the brand’s global reach and expanded non-gaming strategy.
In April 2011, an initial public offering was announced for the MGM Macau property, with Pansy Ho receiving a 29% stake in the newly created company, MGM China Holdings Ltd, which was established as a listing vehicle for the IPO. MGM Resorts would hold 51%, and the public would receive 20%. MGM China raised $1.5 billion from its IPO on the Hong Kong Stock Exchange. In January 2013, MGM China obtained government approval to construct its second resort in Macau. In 2013, MGM was granted state licenses to build a $1-billion resort in National Harbour, Maryland, and a $950-million resort in downtown Springfield, Massachusetts. In May 2014, MGM began construction on a $375-million arena on the Las Vegas Strip with sports and entertainment company AEG.
In 2013, MGM and Foxwoods terminated their partnership and the MGM Grand at Foxwoods was renamed the Fox Tower. The company began constructing the $375-million T-Mobile Arena, which opened on April 6, 2016, behind the New-New York Hotel and Casino in conjunction with AEG Live. In 2014, MGM acquired the naming rights for a new baseball stadium in Biloxi, resulting in MGM Park, and received approval for MGM Springfield, an $800-million venture by the Massachusetts Gaming Commission.
In 2015, MGM sold a few properties, including the Railroad Pass Casino, Gold Strike, and Reno properties (Circus Circus Reno and a 50 percent interest in the Silver Legacy) to Eldorado Resorts for $72.5 million.
MGM sold The Shops at Crystals, a luxury mall connected to CityCenter, to Invesco Real Estate and Simon Property Group for $1.1 billion in April 2016. The mall featured well-known brands like Louis Vuitton, Gucci, Dolce & Gabbana, Tom Ford, Prada, Fendi, and Tiffany & Co.
In the same month, MGM conducted an initial public offering for MGM Growth Properties (MGP), a new real estate investment trust (REIT) that owned ten of the company’s casinos. The parent firm would keep operating the casinos under a lease agreement. The offering raised $1.05 billion and left MGM Resorts with 76 percent ownership of the REIT. MGM also revealed a joint venture with Sydell Group to refurbish and rebrand the Monte Carlo as the Park MGM in June 2016, named after the recently opened dining and entertainment district, The Park.
In August 2016, MGM purchased Boyd Gaming’s interest in the Borgata for $900 million, then sold the property to MGP for $1.2 billion, and leased it back for $100 million per year. MGM introduced two online projects under the PlayMGM brand in 2017: an online sportsbook in Nevada and an online casino in New Jersey. They also purchased the Women’s National Basketball Association’s San Antonio Stars in October 2017, which was renamed the Las Vegas Aces in 2018 after being relocated to Mandalay Bay Events Center.
In August 2018, MGM and Hyatt sold the Grand Victoria Casino to Eldorado Resorts for $328 million. In January 2019, MGM purchased Yonkers Raceway and Empire City Casino in New York from the Rooney family for $850 million, sold the land and buildings to MGP for $625 million, and leased them back for $50 million per year. In 2018, MGM signed a gaming deal with the NFL’s New York Jets.
In 2019, MGM sold two resorts on the Las Vegas strip: Bellagio and Circus Circus. Blackstone Group purchased Bellagio’s real estate holdings, while Phil Ruffin acquired Circus Circus. In 2020, Blackstone and MGM Growth Properties formed a joint venture, with MGM selling their real estate assets of MGM Grand and Mandalay Bay. In the same year, MGM cut 18,000 positions as a result of the COVID-19 pandemic’s effects, representing one fourth of its 68,000 workforce before the outbreak.
MGM also lobbied the Trump administration against authorizing a casino run by two native tribes in East Windsor, Connecticut, in order to prevent competition for their MGM casino across the border in Massachusetts.
In 2021, MGM purchased 50% of Dubai World’s interest in CityCenter and sold Aria and Vdara’s real estate assets to Blackstone, then acquired the operational assets of the Cosmopolitan of Las Vegas before selling the Mirage to Hard Rock International
BetMGM
In July 2018, MGM announced a 50/50 joint venture with UK gambling operator GVC Holdings (now known as Entain) to create a sports betting and online gaming platform targeting the U.S. market in states where such activities are legal. The joint venture was later named Roar Digital in January 2019. MGM also established official partnerships with several North American professional sports leagues, including the National Basketball Association, the National Hockey League, and Major League Baseball. In September 2019, MGM announced a partnership with Buffalo Wild Wings, and in October 2019, the company established a betting partnership with Yahoo Sports. BetMGM also secured multiple exclusive betting partnerships with NFL teams, such as the Denver Broncos, Las Vegas Raiders, and Pittsburgh Steelers, among others. BetMGM continued to develop its partnership library with other teams in other leagues, including the Detroit Red Wings of the NHL, Washington Nationals of MLB, and Philadelphia 76ers of the NBA. On November 8, 2021, BetMGM was awarded a sports betting license by the New York State Gaming Commission and entered into a multi-year marketing partnership with Madison Square Garden Sports. On September 14, 2022, BetMGM entered into a naming rights agreement with NJ Transit to becoming the naming sponsor of the Meadowlands Rail Line.
Conclusion
MGM has been a giant in the world of gambling for years, and it seems they are only increasing their enterprise. Though they’re a tad late to the world of online gambling, their previous successes and their large amount of capital ensure this will grow to be increasingly successful as well.
