MGM Resorts International agrees to sell Gold Strike Tunica operations for $450m
MGM Resorts International will sell the operating rights to Gold Strike Hotel & Casino in Mississippi to Cherokee Nation Entertainment Gaming Holdings.
US.- MGM Resorts International has announced that it has reached an agreement to sell the operations of Gold Strike Tunica, in Mississippi. It will sell the operations to Cherokee Nation Entertainment Gaming Holdings, a subsidiary of Cherokee Nation Businesses, for $450m in cash.
The transaction is expected to close in the first half of 2023, subject to regulatory approvals and other customary closing conditions.
The Cherokee Nation is the largest Indian nation in the US. It owns and operates Hard Rock Hotel & Casino Tulsa and nine Cherokee casinos, including a horse-racing track, three resort-hotels, three golf courses, and other retail operations. The Cherokee Nation and its businesses employ 11,000 people.
MGM Resorts International CEO and president Bill Hornbuckle said: “I want to thank all of our Gold Strike employees who have consistently delivered world-class gaming and entertainment experiences to our guests,” said
“Gold Strike is a wonderful property with a bright future ahead. Strategically, though, we decided to narrow our focus in Mississippi to a single resort – Beau Rivage – and dedicate more of our time and resources towards continuing to drive success at that leading, world-class resort and casino.”
For the twelve months ended December 31, 2021, Gold Strike reported net income of $81.1m and Adjusted Property EBITDAR of $115m, reflecting benefits from certain market-specific factors in the last year. Pre-pandemic, Gold Strike reported Adjusted Property EBITDAR of $67m in 2019.
At the closing of the transaction, MGM Resorts’ master lease agreement with VICI Properties, which currently includes Gold Strike, will be amended to reduce annual rent by $40m. MGM expects net cash proceeds after taxes and estimated fees to be approximately $350 million.
Jonathan Halkyard, CFO and treasurer, MGM Resorts International, said: “This is a great outcome for the company as we are able to reprioritize future capital expenditures toward opportunities that will enhance the customer experience at our other locations. We appreciate VICI, as the real estate owner of Gold Strike, working constructively with CNE to facilitate a new lease agreement.”
Chuck Garrett, chief executive officer of Cherokee Nation Businesses, said: “We look forward to expanding our gaming and hospitality businesses as we execute on our strategic plan to grow our footprint outside of the Cherokee Nation Reservation.
“This acquisition will enable us to better serve our mission of growing the Cherokee Nation’s economy, while also having a significant positive impact on the local economies we serve.”
The Gold Strike opened in 1994 and was acquired by MGM Resorts in 2005. It has a 50,000-square-foot casino and more than 1,100 hotel rooms. Tunica is about 20 miles south of Memphis.
See also: MGM Resorts completes $1.625bn deal to acquire The Cosmopolitan’s operations
