As part of the agreement, MGM Resorts will receive cash proceeds of approximately $440m, and will own an estimated one per cent stake in the Vici operating partnership, worth in the region of $370m. 

The transaction, which has been approved by the board of directors of MGM Resorts, MGP and Vici, is expected to close in the first half of 2022, subject to customary closing conditions, regulatory approvals and approval by stockholders of the latter.

“Since our IPO in 2016, MGP completed over $7bn of real estate transactions that grew our portfolio of premier entertainment assets, including introducing innovative transaction structures to the gaming REIT universe,” said James Stewart, CEO of MGP. 

“As a result of our completed and announced transactions, MGP’s pro rata rental revenue has nearly doubled from $550m at IPO to approximately $1bn, our annualised dividends per share increased 44 per cent, and our total shareholder return has more than doubled. Following the strategic merger with Vici, MGP shareholders will benefit from the collective strengths of both companies.”

Simultaneous with the closing of the transaction, Vici will enter into an amended and restated triple-net master lease with MGM Resorts. This will have an initial total annual rent of $860m, inclusive of MGP’s pending acquisition of MGM Springfield, and an initial term of 25 years, with three 10-year tenant renewal options.

“Through this transformative strategic acquisition, we are merging MGP’s best-in-class portfolio into Vici’s best-in-class management and governance platform, creating the premier gaming, entertainment and leisure REIT in America,” commented Ed Pitoniak, CEO of Vici Properties. 

“We want to thank James Stewart, Andy Chien and the MGP board for building and stewarding a portfolio of such exceptional quality, and going forward we are honoured to become a key real estate and capital partner for Bill Hornbuckle and the MGM Resorts management team and board. We look forward to supporting their strategic growth objectives for decades to come.”

After giving effect to the $4.4bn in cash proceeds from this transaction, as well as the Springfield and CityCenter transactions, MGM Resort expects to have $11.6n of domestic operations liquidity available to enable execution of its goals of “becoming the premier gaming entertainment company, returning value to shareholders and solidifying its balance sheet”.

“In 2016 we started on our journey to become asset light and this announcement, together with our recently announced Springfield and CityCenter transactions, reflects the culmination of those efforts and a major step forward in simplifying our corporate structure,” said Bill Hornbuckle, CEO and president of MGM Resorts. 

“As a result of these actions, we are well positioned and remain focused on pursuing growth opportunities in our core business, with significant financial flexibility to continue to deploy capital to maximise shareholder value.”

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Subsequently, MGM Resorts will lease the Massachusetts property from MGP, and continue its operations following the consummation of the transaction, with there expected to be no change to employees, vendors, customers, and the community.

“We are pleased to announce today’s transaction with MGM Growth Properties, which we believe serves the best interests of the shareholders of both companies and further advances our asset-light commitment,” noted Bill Hornbuckle, CEO and president of MGM Resorts. 

“MGM Springfield has exhibited strong financial performance as it emerges from the pandemic, and the property delivered record adjusted property EBITDAR in the first quarter of 2021.”

Following completion of the acquisition, MGM Springfield will be added to the existing master lease between MGM Resorts and MGP, and the rent payment to the latter will increase by $30m, of which $27m will be base rent and $3m will be percentage rent.  

The sale is expected to close in the fourth quarter of 2021, subject to regulatory approvals and other customary closing conditions. As of March 31, 2021, MGM Resorts held a 42 percent economic interest in the operating partnership of MGP.

James Stewart, CEO of MGM Growth Properties, said: “We are excited to add MGM Springfield to our portfolio of high-quality gaming resort real estate and are encouraged by the property’s recent record financial performance.

“This transaction reflects the continued execution of our growth strategy, will be immediately accretive to AFFO per share upon closing and further strengthens our master lease with MGM.”

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163

Casino and racetrack operator Penn National Gaming has completed its previously announced acquisition of a 36 per cent interest in Barstool Sports for $163m.

In a deal that values the latter at $450m, the purchase price is comprised of approximately $135m in cash and $28m in non-voting convertible preferred stock.

Pursuant to the transaction terms, Penn National is now Barstool Sports’ exclusive gaming partner and has the sole right to utilise the brand for all of its online and retail sports betting and igaming products.

Furthermore, the company will also increase its ownership in Barstool Sports to approximately 50 per cent after three years (or earlier, at Penn National’s election) with an incremental investment of approximately $62m, consistent with the implied valuation at the time of the initial purchase, and has a path to establish control and full ownership of Barstool Sports.

Upon closing, Penn National designated Chris Rogers, senior vice president and chief strategy officer and Jon Kaplowitz, senior vice president of interactive gaming, to join Barstool Sports’ seven-member board of directors.

26

Bragg Gaming Group anticipates 2019 revenue to hit the higher end of expectations, as the firm posts a financial outlook for the year ahead in which it praises a “potential breakthrough in German regulations”.

Publishing a business update, including preliminary 2019 financial results and a 2020 financial outlook, Bragg expects 2019 revenue to come in at approximately €26m for 2019, representing growth of over 37 per cent as compared to 2018 on a pro forma basis, if Oryx had been a part of the group during the period. The group’s €1.4m EBITDA will be positive for the first time.

Management of Bragg Gaming Group attributes growth to:

• The core casino aggregator platform performing “extremely well” in sales processes.
• Successful notable new client wins, including Unibet, Betsson, Leo Vegas, BetClic and Mr Green.
• Stabilisation and growth of key German revenues following renewal of licenses in the middle of the year.
• Growth of regulated revenues, including in Columbia through its agreement with FullReto.co, as well as Romania, Sweden and Croatia.

4.6

MGM Resorts International, MGM Growth Properties and Blackstone Real Estate Income Trust have confirmed the completion of its previously announced $4.6bn transaction.

The deal sees BREIT acquire the Las Vegas real estate assets of the MGM Grand and Mandalay Bay, in a continuation of MGM’s asset light strategy which has also seen the firm announce Bellagio and Circus Circus Las Vegas sales that will provide cash proceeds in the region of $8.2bn. BREIT has also purchased approximately 4.9 million MGP Class A shares at a price of $30.67 per share.

Simultaneous with the closing of the transaction, MGP AND BREIT have entered into a joint venture regarding the properties, which will be owned 50.1 per cent by the former.

Furthermore, in connection with the completion of the transaction MGM Resorts has entered into a long-term triple net master lease for both properties, and will continue to manage, operate and be responsible for all aspects of the properties on a day-to-day basis, with the joint venture owning the properties and receiving rent payments. MGM also states that it has provided a full corporate guarantee of rent payments.

Representing a further continuation of the organisation’s asset-light strategy, the transactions become the next step in MGM’s quest to become a leader within the global gaming, hospitality and entertainment sectors.

37

US gaming technology firm Scientific Games has shown an improvement in its full-year figures for 2019, despite the year’s final quarter seeing a significant swing from a net profit of $207m to a loss of $37m.

The prior year included a $183m reversal of a reserve related to resolving antitrust litigation alongside Shuffle Tech and other plaintiffs. On a full-year basis net loss narrowed to $118m from $352m.

The company saw a 2.6 per cent drop in quarterly revenue to $863m (2018: $886m) impacted by lower machine unit sales and a drop in gaming revenue primarily due to fewer systems launches in Canada. Full-year revenue rose a little over one percentage point to $3.4bn.

Consolidated adjusted EBITDA fell 4.3 per cent from $343m to $328m during Q4 with lower lottery and gaming AEBITDA offset by a digital increase of 75 per cent to $21m. A slight full-year rise to $1.33bn was driven by growth in lottery, SciPlay and digital segments, which was largely offset by a gaming decline.

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$850m

MGM Resorts International and MGM Growth Properties have announced the completion of transactions to acquire Empire City Casino, located in Yonkers, New York.

MGM Resorts acquired the property for approximately $850m, with the company agreeing to pay an additional $50m if Empire City is awarded a license for live table games on or prior to December 31, 2022.

Following the purchase MGP secured the developed real property from MGM for in the region of $625m, and leased it back to an MGM subsidiary that is to undertake daily operations.

Jim Murren, chairman and CEO of MGM Resorts, commented: “We are pleased to welcome the 1,200 employees at Empire City Casino to the MGM Resorts family.

“Over the past three years, we have established a meaningful presence in the northeast with Borgata in Atlantic City, MGM National Harbor in Maryland, and MGM Springfield in Western Massachusetts.

“With this new addition to the MGM Resorts portfolio, we have now gained a foothold in the high-density New York City region, and we look forward to leveraging the MGM platform to maximise value in this evolving marketplace.”

2024

Japan’s Wakayama Prefecture has announced further details of its integrated resort plans, should it win one of up to three licenses that are set to be issued by the country’s central government, report Asian news outlets.

The confident region, one of only three to confirm its interest in being a host thus far alongside Osaka and Nagasaki Prefecture, has earmarked Wakayama Marina City as its preferred site.

Chosen due to its established infrastructure, its location in close proximity to the Kansai International Airport, in addition to tourist spots such as the Shirahama Hot Springs and the Koyasan World Heritage Site, was also praised.

Wakayama is reported to have set aside $1.8m in next year’s budget for related costs, including IR research and wider financial concerns, with it estimated that an additional four million visitors will be attracted per year, bringing $2.75bn as a result.

It is intended that a grand opening will commence in 2024, alongside Osaka which is widely expected to be successful in its bid to host an IR.

51

Paddy Power Betfair has announced that it has secured number one position in the “fast growing regulated online Georgian market,” via the purchase of a 51 per cent stake in Adjarabet for an initial cash consideration of £101m.

The organisation has also agreed a further stipulation, under the terms of which it expects to acquire the remaining 49 per cent after a period of three years, at a valuation equivalent to seven times of 2021 EBITDA.

In a media statement Paddy Power Betfair released further details of its latest deal: “This acquisition provides the group with exposure to two attractive, fast-growing, regulated markets.

“The online Georgian market is estimated to have grown at a CAGR of 40% from 2016 to 2018 to an estimated £180m of gross gaming revenue, with the nascent Armenian market providing a further growth opportunity.

“We believe that the combination of the market-leading brand and local operational expertise with Paddy Power Betfair’s technology, and leading sports capabilities, positions Adjarabet very well to capitalise on this opportunity.”

1

Las Vegas headquartered Caesars Entertainment has announced plans to debut its first non-gaming hotel in the United States, which is to be located in the Arizona city of Scottsdale.

Falling under the organisation’s new Caesars Republic brand, the four star property is to be developed by HCW Development and operated by Aimbridge Hospitality, with Caesars licensing its brand, in addition to advising on design elements and integrating its total rewards loyalty network.

Stated to tap “into the unique pulse of each host city,” Caesars stressed that no two Republic entity’s are to be exactly alike, with “everything from the décor to the culinary offerings inspired by local traditions and taste-makers”.

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GameSense, an MGM Resorts wide program, strives to align responsible gambling policies with enhanced customer service education, forming part of the latest efforts in promoting such initiatives within the industry.

MGM states that GameSense “will come alive” via personal interactions between guests and trained staff based at the property’s member rewards location.

As well as speaking to trained employees, guests of Empire City Casino will be able to utilise interactive GameSense touchscreens in addition to picking up educational materials and other resources.

Launched nationwide two years ago, with responsible gambling measures “a major focus at every one of the company’s casinos worldwide,” GameSense has already sparked more than 900,000 conversations with guests. 

Through implementing the initiative, responsible gambling education and support will be integrated into Empire City Casino’s guest service culture, designed to help individuals make informed decisions and keep gambling fun.

“It’s exciting to introduce MGM programs, such as GameSense, to our guests,” added Uri Clinton, Empire City Casino President and COO. “This program epitomises the MGM culture – it’s innovative, forward-thinking and puts our guests first. We look forward to introducing GameSense to the community.”

MGM Resorts International and MGM Growth Properties announced the completion of transactions to acquire Empire City Casino earlier this year.

MGM Resorts acquired the property for approximately $850m, with the company agreeing to pay an additional $50m if Empire City is awarded a license for live table games on or prior to December 31, 2022.

Following the purchase MGP secured the developed real property from MGM for in the region of $625m, and leased it back to an MGM subsidiary that is to undertake daily operations of the entity.

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MGM Resorts acquired the property for approximately $850m, with the company agreeing to pay an additional $50m if Empire City is awarded a license for live table games on or prior to December 31, 2022.

Following the purchase MGP secured the developed real property from MGM for in the region of $625m, and leased it back to an MGM subsidiary that is to undertake daily operations.

Furthermore, MGM has also agreed to give MGP a right of first offer with respect to certain undeveloped land adjacent to the property.

Jim Murren, chairman and CEO of MGM Resorts, said of the deal: “We are pleased to welcome the 1,200 employees at Empire City Casino to the MGM Resorts family.

“Over the past three years, we have established a meaningful presence in the northeast with Borgata in Atlantic City, MGM National Harbor in Maryland, and MGM Springfield in Western Massachusetts.

“With this new addition to the MGM Resorts portfolio, we have now gained a foothold in the high-density New York City region, and we look forward to leveraging the MGM platform to maximise value in this evolving marketplace.”

The 97-acre Empire City, located 15 miles from Manhattan’s Times Square serves around 16 million eligible gaming customers in southern New York, and features over 5,200 slots and electronic table games, multiple dining outlets, and both live and simulcast horse racing.

Timothy Rooney, president and CEO of Empire City Casino, explained: “What’s incredibly exciting is the amount of opportunity MGM Resorts will bring to the employees at Empire City, as well as Westchester County, the city of Yonkers, and the State of New York.

“With destinations throughout the world, from resorts to casinos to entertainment, MGM has a tried-and-true formula for success. They know how to build and grow properties that continually raise the bar in entertainment, travel, and leisure, and we are so thrilled to leave Empire City in MGM’s capable hands.

“What’s more, the potential for growth at Empire City has absolutely no boundaries. MGM will truly provide Empire City employees and the property’s guests with the resources and opportunities to make the casino and track into something we haven’t even yet realised. I cannot wait to see what’s to come!”

“Today, we continue to expand MGP’s best-in-class portfolio with the acquisition of the real estate assets of Empire City, expanding our geographic footprint to the New York City metropolitan area,” added James Stewart, CEO of MGM Growth Properties.

“This financially accretive transaction further diversifies our existing market-leading regional portfolio, and provides us with additional growth opportunities with a right of first offer on any potential capital improvements in the future. This is another excellent example of the power of our partnership with MGM Resorts.”

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Expected to be completed next year, annual rent payable by MGM to its real estate investment trust is to increase by $50m, while 90 per cent of the increased rent will be contractually fixed to grow at two percent per year until 2022.

Jim Murren, chairman and CEO of MGM Resorts, explained:”The creation of Park MGM and NoMad Las Vegas, in conjunction with T-Mobile Arena, Park Theater and the entire mid-Strip neighbourhood, further solidify our position as a global resort and entertainment leader.

“As we continue to execute our multifaceted strategic plan, and as part of our ongoing efforts to optimise our portfolio, we believe that these prudent investments in our assets will bring substantial value to MGM Resorts, MGP and our respective shareholders.

“MGM Resorts will continue to deliberately reduce our owned real estate through accretive transactions in the future. MGP is an attractive partner to achieve this goal. We remain committed to our stated strategic objectives, including reducing our ownership stake in MGP.”

James Stewart, CEO of MGM Growth Properties, said of the new deal: “Park MGM and NoMad Las Vegas are exciting new concepts on the Las Vegas Strip, further enhancing our already outstanding portfolio.

“MGM Resorts has invested in the significant repositioning of Park MGM and NoMad Las Vegas, and we are excited to partner with MGM Resorts for these iconic assets.

“We intend to fund the consideration through a combination of cash and availability under our credit facility. This transaction will be immediately accretive to our AFFO, and further demonstrates the power of our business model and partnership with MGM Resorts.”

This comes as MGM announces that Steve Zanella has been appointed the new president and Chief Operating Officer of CityCenter, where he will oversee daily operations of Aria Resort and Casino and Vdara Hotel and Spa, providing strategic direction to both.

“Steve is a highly accomplished industry veteran whose expertise will be valuable in guiding our luxury resorts at CityCenter,” commented Corey Sanders, COO of MGM Resorts International. “We are delighted to welcome him to this new role. Steve has a proven track record for success, and we look forward to further strengthening the performance of CityCenter under his leadership.”

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Operating income at MGM’s domestic resorts came in at $449m (£334m) for Q2, which “was negatively impacted by disruption related to the repositioning and rebranding at Park MGM”.

This is contrasted to $520m (£398.6m) during Q2 2017, “which benefited from $36m (£27.6m) related to Borgata‘s share of a property tax settlement from Atlantic City, as well as $41m (£31.4m) related to a modification of the 2016 NV Energy exit fee”.

Domestic adjusted EBITDA for the period came in at $626m (£480m), a five per cent decrease, excluding its Park MGM property, currently undergoing transformation adjusted EBITDA narrows to a two per cent decline.

An eight per cent boost in casino revenue amongst MGM’s US properties is primarily driven by a 14 per cent increase in table games win, aided by the firms assets based on the Las Vegas strip.

Net income for the period came in at $123.78m (£94.98m), contrasted to $209.86m (£160.8m) for the the second quarter of 2018.

Jim Murren, chairman and CEO of MGM Resorts International, commented: “Our Las Vegas Strip resorts benefited in the prior year third quarter from a stronger citywide convention base, two major boxing events and a higher than normal table games hold.

“The difficult comparison in citywide convention attendees, has resulted in a more negative than anticipated hotel mix shift creating short-term competitive rate pressure in the current year third quarter.

“In addition, the transition of Park MGM continues to create short-term headwinds but is on track to complete its transformation by the end of this year.”

Net revenue for the quarter came in shy of analyst expectations at $2.86bn (£2.18bn), contrasted to 2017’s $2.65bn (£2.03bn), with domestic net revenue showing a slight three per cent boost to $2.2bn (£1.69bn), increasing to four per cent when excluding Park MGM.

Looking at the companies MGM China operations, operating income has remained at $46m (£35.2m) in both the current and the prior year quarters, net revenue increased 32 per cent to $561m (£430m) and adjusted EBITDA rose slightly to $120m (£92m).

Murren added: “Our second quarter came in better than we expected and we made significant progress to capitalise on future growth opportunities in sports betting and Japan.

“Earlier this week, we announced major alliances with GVC, Boyd Gaming and the NBA to cement our leadership position in the developing sports betting market in the US. Further, the recent passage of Japan’s Integrated Resort Implementation Act is another historic milestone, and we believe we are well positioned in that market.

“We believe our continued focus on maximising our margins, the near-term completion of our development pipeline, and our ability to accretively sell assets to MGM Growth Properties, will further accelerate our free cash flow generation.  

“We are confident that we will continue to execute on our long-term strategies and deliver value to our shareholders, as evidenced by the nearly $600m (£460m) in share repurchases we made during the quarter.”

Looking ahead to its third quarter and full year expectations, MGM commented: “The company expects third quarter net revenues at its Las Vegas Strip resorts to be lower by approximately 8% to 10%, with REVPAR down 5% to 7%. The company also expects Las Vegas Strip adjusted property EBITDA margins to be approximately 28%, or around 29% excluding Park MGM.

“The company expects its full year 2018 net revenues and REVPAR at its Las Vegas Strip resorts to decrease by a low single digit percentage, and an adjusted property EBITDA margin of approximately 29%, or around 30% excluding Park MGM.”

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Funding the purchase through “a combination of cash on hand and debt,” MGP has also stated an intention to sell the licenses and operating assets to a third party operator.

The real estate is to be retained, with $50m-$60m in rent annually the expectation, and the deal is expected to close in the second half of 2018, pending the closure of customary conditions and regulatory approvals.

Brock Milstein, Chairman of the Board at Hard Rock Rocksino Northfield Park, said: “Since opening our doors in December 2013, the Hard Rock Rocksino has established itself as the premier gaming and entertainment destination in the market, thanks to our dedicated employees, partners and loyal guests.

“MGM Growth Properties has many options and opportunities to invest all over the country, so we are especially proud and grateful that they have chosen to make such a meaningful investment in Ohio.”

The property consists of 2,300 video lottery terminals, two entertainment venues, a 1,900 seat music arena and 250 seat event space, year round racetrack and a number of retails, food and beverage outlets.

James Stewart, Chief Executive Officer of MGM Growth Properties, added: “MGP is proud to announce the acquisition of the Hard Rock Rocksino, the best performing gaming asset in Ohio.

“We are thrilled to join the Northeast Ohio community and look forward to continuing to work with the management team to consummate the transaction and identify a third-party tenant to operate the asset going forward.

“This attractive addition to our portfolio is expected to result in mid to high single digit percentage accretion to AFFO per share, demonstrating again our commitment to generating value for our shareholders.

“This transaction represents another significant step in executing on our business plan to sustainably grow our AFFO per share while diversifying our high-quality asset and tenant base.”

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