MGM Resorts is all about expanding its portfolio, especially in the southern end of the Las Vegas Strip. Earlier this week, one of the company’s executives predicted several developments in the area. While the firm already dominates most of the southern end, it feels insufficient.
Already, the Resorts have other casinos on the Strip, including MGM Grand, Park MGM, New York-New York, Mandalay Bay, Luxor, and Excalibur. The other casino on the Strip is Tropicana, which MGM Resorts does not run.
The company is extending its dominance by acquiring Cosmopolitan. In September, MGM announced that it was paying Blackstone Group $1.6 billion to buy the operation rights of the Cosmopolitan casino and hotel.
Yet, it is not the last of that expansion. The MGM executive, Chief Financial Officer (CFO) Jonathan Halkyard, spoke during the Morgan Stanley Virtual Global Consumer & Retail Conference when he mentioned a new casino. Jonathan said the brand was theoretically interested in constructing a ground-up casino near Excalibur.
The land near Excalibur stretches seven acres. It is almost the same size as Cosmopolitan. The CFO clarified that the company was not planning to build the 3000 room hotel tower and casino. However, he mentioned it was the company’s future option.
MGM Resorts Has to Agree with MGM Growth Properties to Development a New Casino
Before MGM Resorts can build a new casino, it has to discuss several issues with its landlord, MGM Growth Properties. It is a real estate investment trust for MGM Resorts and owns every land and physical asset of the casinos mentioned above.
There have been rumors that MGM has wanted to disassociate with Excalibur for the past few years. It is a lower-end casino that caters to low, medium-budget visitors. It will get all the reasons to build a new luxurious casino if it does.
MGM Resorts has the most shares in the MGM Growth Properties. If it required voters to decide on the possibility of another casino, it would probably win.
The southern section of the Strip is bustling. Besides the Allegiant Stadium, a home to the National Football League (NFL) Las Vegas Raiders, Major League Baseball Oakland A plans to build a ballpark near Tropicana.
MGM Is Optimistic Despite Uncertainty That COVID-19 Presents
With 2021 coming to an end, the omicron variant presents much uncertainty. Assuming the mutation is managed and does not cause reimplementation of lockdowns, MGM is optimistic about its future in Las Vegas.
The brand is suitable to be cheerful considering Nevada’s monthly gross gaming revenue, which has clocked $1 billion for the past eight months. Similarly, Clark County has reported over $1 billion in monthly revenue for five of the six past months.
The impressive gaming revenue could be a result of pent-up demand. However, several other factors, including guests’ spending, could have resulted in the high revenue generation. Reporting about the new Coronavirus variant, the CFO said it had not yet affected bookings from visitors.
The only area MGM is concerned about is the return of people above 65 years. The CFO said that most of these people had not returned to the brand’s casinos across the country. However, he noted the return of this demographic would help MGM return to normalcy.
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