Boyd Gaming has agreed to sell its 50% ownership stake of The Borgata in Atlantic City to MGM Resorts International for a purchase price of $900 million. MGM was already the owner of the other 50% stake, however Boyd was the operator of the hotel and casino.
The announcement was made via separate MGM Resorts and Boyd Gaming press releases.
After the sale is complete MGM Resorts will transfer ownership of The Borgata to their real estate subsidiary MGM Growth Properties. The MGP REIT will then lease the property back to MGM, who will operate the hotel and casino. Borgata will become an M Life Rewards property.
This transaction doesn't have a direct impact on Las Vegas, but there's an interesting wrinkle. Now that MGM owns 100% of The Borgata I assume they are free to use "Borgata" as a brand name in Las Vegas.
Last year it was announced that Monte Carlo would be getting a name change. I had speculated that Borgata Las Vegas would be a great name for Monte Carlo. MGM's purchase of The Borgata today takes that unlikely scenario one step closer to reality.
Update - June 3, 2016: I guess it wasn't meant to be. The new name of Monte Carlo is Park MGM.
Showing posts with label Atlantic City. Show all posts
Showing posts with label Atlantic City. Show all posts
Tuesday, May 31, 2016
Friday, June 12, 2015
Atlantic City - Existing Properties Stabilizing
May 2015 brought mixed results for Atlantic City.
The good news is revenue at existing casinos was up 5.3%.
The bad news is the total market (including closed properties) was down 9%.
Those numbers include internet gaming, which was up 19% over May 2014.
Existing Atlantic City properties seem to be stabilizing with decreased local competition. Regional competition however continues to be fierce, and won't let up anytime soon. Massachusetts, New York, and Maryland (National Harbor) all have new projects on the horizon that have the potential to eat into AC's revenue numbers. Internet might be a saving grace for New Jersey, but it's only a matter of time before the other states catch up in that arena.
The good news is revenue at existing casinos was up 5.3%.
The bad news is the total market (including closed properties) was down 9%.
Those numbers include internet gaming, which was up 19% over May 2014.
Existing Atlantic City properties seem to be stabilizing with decreased local competition. Regional competition however continues to be fierce, and won't let up anytime soon. Massachusetts, New York, and Maryland (National Harbor) all have new projects on the horizon that have the potential to eat into AC's revenue numbers. Internet might be a saving grace for New Jersey, but it's only a matter of time before the other states catch up in that arena.
Wednesday, June 03, 2015
Hard Rock Meadowlands
Hard Rock International has announced plans (via Press Release) to develop a casino project in Northern New Jersey at the Meadowlands.
There will be many legislative hurdles to cross, but it seems like gaming in Northern New Jersey has a lot of momentum.
The biggest question is how this will affect Atlantic City. The press release claims that a portion of the tax revenue "could go directly to aid in the development and reconstruction of Atlantic City's casino and hotel industry" but who knows how that would play out.
I don't think Atlantic City would be hurt by the increased competition, because there's already so much competition from surrounding states that the market's pretty well saturated. Maybe AC's best hope is to get some kind of subsidy from Northern New Jersey casinos.
There will be many legislative hurdles to cross, but it seems like gaming in Northern New Jersey has a lot of momentum.
The biggest question is how this will affect Atlantic City. The press release claims that a portion of the tax revenue "could go directly to aid in the development and reconstruction of Atlantic City's casino and hotel industry" but who knows how that would play out.
I don't think Atlantic City would be hurt by the increased competition, because there's already so much competition from surrounding states that the market's pretty well saturated. Maybe AC's best hope is to get some kind of subsidy from Northern New Jersey casinos.
Saturday, July 26, 2014
Las Vegas in 2014
I've been away from the blog for a while. I'm always thinking about Las Vegas and it's about time I start posting again. Some of the topics I plan on covering soon are:
- The Cromwell
- Downtown Grand
- The Linq and the High Roller
- The Quad name change to The Linq
- SLS Las Vegas
- Resorts World
- MGM-AEG Arena
- Cosmopolitan sold
- Atlantic City
Las Vegas is constantly changing so there's a lot to write about.
- The Cromwell
- Downtown Grand
- The Linq and the High Roller
- The Quad name change to The Linq
- SLS Las Vegas
- Resorts World
- MGM-AEG Arena
- Cosmopolitan sold
- Atlantic City
Las Vegas is constantly changing so there's a lot to write about.
Monday, August 22, 2011
Revel Atlantic City Photos
The new Revel hotel resort in Atlantic City seems to be progressing nicely, on the way to its projected Spring 2012 opening date.
Revel has created a website to show off the project, with some new photos and video. The glass facade looks great with the way it reflects the clouds and sky.
For more: Revel Media Center.
Revel has created a website to show off the project, with some new photos and video. The glass facade looks great with the way it reflects the clouds and sky.
For more: Revel Media Center.
Wednesday, July 20, 2011
Atlantic City Hilton is now ACH
A couple weeks ago I wrote about how Hilton was terminating their franchise agreement with Las Vegas Hilton at the end of the year.
Now news has surfaced that Atlantic City Hilton is facing the same fate. Except they don't even have until the end of the year, and have already re-branded the hotel as "ACH."
If you go to the Atlantic City Hilton website, you will see that the name ACH has replaced most of the Hilton branding.
David McKee wrote a good article about the name change. He speculates that ACH is likely a temporary placeholder name until the property can be sold off to another company.
Now news has surfaced that Atlantic City Hilton is facing the same fate. Except they don't even have until the end of the year, and have already re-branded the hotel as "ACH."
If you go to the Atlantic City Hilton website, you will see that the name ACH has replaced most of the Hilton branding.
David McKee wrote a good article about the name change. He speculates that ACH is likely a temporary placeholder name until the property can be sold off to another company.
Tuesday, May 17, 2011
Revel Atlantic City Restarts Construction
The stalled Revel hotel project in Atlantic City is back on track. The project recently secured financing for the remaining $1.15 billion needed to complete the hotel.
When it opens in the spring of 2012 it will be the first new casino to open on the boardwalk in over 20 years. Locals are hoping the $2.4 billion resort will attract new business to Atlantic City.
It's nice to see a stalled project like this get back on track. Maybe this gives hope to Fontainebleau and Echelon someday restarting in Las Vegas? Maybe not.
To read more about Revel check out Press of Atlantic City.
When it opens in the spring of 2012 it will be the first new casino to open on the boardwalk in over 20 years. Locals are hoping the $2.4 billion resort will attract new business to Atlantic City.
It's nice to see a stalled project like this get back on track. Maybe this gives hope to Fontainebleau and Echelon someday restarting in Las Vegas? Maybe not.
To read more about Revel check out Press of Atlantic City.
Thursday, April 21, 2011
Steve Wynn's Fair Share Concept
The Wynn Resorts quarterly earnings conference call was on Tuesday. The call is sometimes called The Steve Wynn Show by insiders because his straightforward answers can be very entertaining and educational.
Here's one tidbit from this week's call that I found interesting. It involves a concept that Wynn calls "Fair Share" that Wynn Resorts uses to judge how well they are doing:
"For those of you who really follow this, don't look at market share per se, look at fair share. We use that term, you can call it what you want. But you basically take how many units of slot machines or tables does a given operator have compared to the total in the marketplace, and then take a look at the share of the money that the person -- that the company has. If that ratio is better than 1:1, then you're a net receiver of the customers and you've sort of made a dorm out of your neighbor. If it's less than 1:1, then you're a dorm to your neighbor, and that's a negative fair share. We have been able to increase our fair share market penetration in the face of increased competition. It happened to us in Atlantic City years ago. We were the smallest place. But the more places came on, the more our premium over the average increased, and we're enjoying that again in Macau. It's a very important number, and it sort of tells you how good a job you are in delivering a good guest experience, a good customer experience that makes those people want to come back again and again and keep you as their favorite place."
You can listen to the conference call at Wynn Investor Relations, and read the transcript at Seeking Alpha.
Here's one tidbit from this week's call that I found interesting. It involves a concept that Wynn calls "Fair Share" that Wynn Resorts uses to judge how well they are doing:
"For those of you who really follow this, don't look at market share per se, look at fair share. We use that term, you can call it what you want. But you basically take how many units of slot machines or tables does a given operator have compared to the total in the marketplace, and then take a look at the share of the money that the person -- that the company has. If that ratio is better than 1:1, then you're a net receiver of the customers and you've sort of made a dorm out of your neighbor. If it's less than 1:1, then you're a dorm to your neighbor, and that's a negative fair share. We have been able to increase our fair share market penetration in the face of increased competition. It happened to us in Atlantic City years ago. We were the smallest place. But the more places came on, the more our premium over the average increased, and we're enjoying that again in Macau. It's a very important number, and it sort of tells you how good a job you are in delivering a good guest experience, a good customer experience that makes those people want to come back again and again and keep you as their favorite place."
You can listen to the conference call at Wynn Investor Relations, and read the transcript at Seeking Alpha.
Thursday, February 17, 2011
Atlantic City Trump Marina to become Golden Nugget
The Trump Marina in Atlantic City has been sold for the bargain price of $38 million. The buyer, Landry's Inc. owns the Golden Nugget in Las Vegas and Laughlin and is planning on transforming Trump Marina into a Golden Nugget location. The company plans on sinking $150 into the property to make it one of the nicest hotels in Atlantic City.
The Golden Nugget brand has been in Atlantic City before. The current Atlantic City Hilton (which is also currently for sale) was called Golden Nugget from when it opened in 1980 to 1987. Back then it was owned by Steve Wynn. I wonder what ever happened to that guy?
The Trump Marina is the one hotel in AC that I've never set foot in, the reason being that it has a terrible reputation of being a dump. The location is also isolated, so you can't just happen upon it like you could with a boardwalk casino.
If things go well with the renovations it looks like the Golden Nugget will become a destination casino similar to the other Marina area hotels. You can argue that the two nicest hotels in Atlantic City are Borgata (clearly #1) and Harrah's (up for debate), so when the Nugget is complete the Marina area will have three of the best hotels in Atlantic City.
Source: Press of Atlantic City.
The Golden Nugget brand has been in Atlantic City before. The current Atlantic City Hilton (which is also currently for sale) was called Golden Nugget from when it opened in 1980 to 1987. Back then it was owned by Steve Wynn. I wonder what ever happened to that guy?
The Trump Marina is the one hotel in AC that I've never set foot in, the reason being that it has a terrible reputation of being a dump. The location is also isolated, so you can't just happen upon it like you could with a boardwalk casino.
If things go well with the renovations it looks like the Golden Nugget will become a destination casino similar to the other Marina area hotels. You can argue that the two nicest hotels in Atlantic City are Borgata (clearly #1) and Harrah's (up for debate), so when the Nugget is complete the Marina area will have three of the best hotels in Atlantic City.
Source: Press of Atlantic City.
Monday, October 25, 2010
Boyd won't buy rest of Borgata
Boyd Gaming announced today that it will not purchase the rest of the Borgata in Atlantic City. Borgata was a 50/50 joint venture between Boyd and MGM. Recently MGM announced that they had an offer on the table to sell their share of the property. That offer was made by Leonard Green & Partners.
As the operating partner Boyd had a chance to match that offer. Today Boyd announced that they were declining to purchase the rest of the property:
"Given other opportunities and our current focus on deleveraging our balance sheet, the current offer would not provide a sufficient return on investment for our shareholders. Despite this decision, we are confident in the future of Borgata. The property represents a major investment by Boyd Gaming, and it has delivered substantial value for our shareholders. We remain comfortable with our current position as managing member and 50% owner of Borgata, the region's premier destination resort."
Source: Boyd Press Release.
As the operating partner Boyd had a chance to match that offer. Today Boyd announced that they were declining to purchase the rest of the property:
"Given other opportunities and our current focus on deleveraging our balance sheet, the current offer would not provide a sufficient return on investment for our shareholders. Despite this decision, we are confident in the future of Borgata. The property represents a major investment by Boyd Gaming, and it has delivered substantial value for our shareholders. We remain comfortable with our current position as managing member and 50% owner of Borgata, the region's premier destination resort."
Source: Boyd Press Release.
Sunday, October 17, 2010
MGM Sells Borgata
MGM Resorts International is close to selling their 50% stake of the Borgata in Atlantic City. The company announced it had received an offer from an unnamed source, and is now waiting on approval from the other half of the Borgata ownership, Boyd Gaming.
MGM will receive about $250 million cash in the deal, which calls for the buyer to take over half of the Borgata's $875 million debt load. So essentially the deal is worth $687.5 million which would value the whole Borgata property at $1.375 billion.
Selling the Borgata allows MGM to chip away at their massive debt. It also means they will be out of New Jersey completely which will give them more freedom to operate in Macau. While the Borgata is a great property and the best thing in Atlantic City, MGM is probably happy to sell given the circumstances.
Source: MGM Press Release.
MGM will receive about $250 million cash in the deal, which calls for the buyer to take over half of the Borgata's $875 million debt load. So essentially the deal is worth $687.5 million which would value the whole Borgata property at $1.375 billion.
Selling the Borgata allows MGM to chip away at their massive debt. It also means they will be out of New Jersey completely which will give them more freedom to operate in Macau. While the Borgata is a great property and the best thing in Atlantic City, MGM is probably happy to sell given the circumstances.
Source: MGM Press Release.
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