- Vici Properties, a spinoff of Caesar’s Entertainment purchased 15 MGM Resort properties in Las Vegas.
- Caesar’s Entertainment expected to become the largest hotel owner in the U.S.
- MGM Resorts looking towards global expansion.
MGM Resorts is moving money around like it’s nobody’s business, but it’s a sign of the times in the wake of a post-COVID reconstruction. On Wednesday, the entertainment group announced that it would be selling a large handful of its properties to Caesar’s Entertainment.
The deal will happen through each of the companies’ spinoff casino real estate groups. Caesar’s, operating under Vici Properties, will acquire a significant portion of the Strip on Las Vegas Boulevard. Among these properties are the notorious Excalibur, The Mirage, and Park MGM.
The buyout is valued at approximately USD $17.2 billion and will likely close at some point in 2022. Because of the deal, Vici Properties is expected to become the largest hotel owner in the U.S.
However, this isn’t Vici’s first major casino acquisition of the year. In March the group announced their plans to purchase The Venetian and Palazzo, along with the Sand Expo and Convention center.
Since the exchange is restricted to real-estate ownership, patrons are not expected to see any major changes in casino operations. MGM will continue to run and oversee all the properties sold during the acquisition. The hand simply has a new mouth to feed.
Making Money Moves
If you’re under the impression that MGM made this decision out of money struggles, don’t get it twisted. As it stands, MGM Resorts seems to be looking towards international expansion.
Furthermore, business in Las Vegas has been stagnating for more than a year, making these kinds of moves understandable. Even so, business analysts have commented on the matter, claiming that the value of the real estate on the Strip is being grossly underestimated.
MGM’s President elaborated that the real-estate sell-off leaves the group “well-positioned” to “maximize shareholder value.” And it seems to be working, as MGM Growth shares were up 6.8% as of Wednesday.
Nonetheless, Caesar’s has reason to be satisfied with their purchase. By the end of the deal, the group will obtain 15 entertainment properties.
Vici, Caesar’s subsidiary, was formed in 2017 to pull its parent company out of bankruptcy. Since then, Caesar’s Entertainment has grown exponentially. Earlier this week, the group unveiled a new and improved mobile sportsbook.
What Does It Mean for Me?
While the relationship between MGM Resorts and Caesar’s Entertainment appears to be symbiotic, patrons are left to wonder whether these decisions are made to benefit them.
Most of the headlines address the profitability of the deal for investors but fail to comment on how executives at either company plan to improve patron experience.
There have been recent rumblings of corrupt land-based casino operations with reputable organizations such as Australia’s Crown Entertainment. Because of this type of behavior, it’s getting harder for gamblers to re-establish trust with casinos they’ve spent so much time away from.
It makes sense, with legal online casino options growing rapidly, consumers don’t have to worry about loan sharks or other wrongdoings. Plus, an online interface is always focused on the consumer experience.
If you’d like resources about legal online gambling operations, be sure to check out our site.