MGM Resorts Reportedly Looking to Sell Two Properties

    MGM Resorts Reportedly Looking To Sell Two Properties
    Article by : Erik Gibbs Mar 21, 2024

    MGM Resorts International is currently exploring the potential sale of its casino operations situated at Ohio’s Northfield Park and in Springfield, Massachusetts. individuals familiar with the situation confirmed the possibility, on condition of anonymity, to media outlet Bloomberg.

    The company is collaborating with financial advisers on this matter. However, it’s worth noting that these discussions are in their preliminary stages and may not lead to any definitive action.

    Management at MGM has expressed frustration over the company’s share price, which has seen minimal growth of less than 5% over the past two years, despite notable increases in sales and profits.

    As the largest operator of casinos on the famed Las Vegas Strip, MGM has been actively seeking to expand its presence in both the domestic and international online gambling markets.

    Located approximately 20 miles southeast of Cleveland, MGM Northfield Park combines a horse track with a casino facility. MGM began managing the property in 2019 after taking over from the former Hard Rock establishment.

    In Springfield, Massachusetts, MGM secured a license to operate following the state’s authorization of casino gambling. However, despite opening its doors in 2018, the Springfield casino has fallen short of expectations.

    MGM’s CEO, Bill Hornbuckle, acknowledged the miscalculation in the initial valuation of the Springfield market during discussions with local officials last year, emphasizing that the property’s performance did not meet anticipated levels.

    Despite generating $278 million in gambling revenue in 2023, it has not lived up to the company’s projections.

    It’s important to note that the real estate where both casinos are situated is owned by Vici Properties Inc., a New York-based real estate investment trust.

    Vici Properties acquired MGM Growth Properties, MGM’s REIT affiliate, nearly two years ago. However, a representative from Vici declined to provide any comments regarding the ongoing sale talks.

    From a financial scope, several equities research analysts have released reports on MGM shares. JPMorgan Chase & Co. raised their price target on MGM Resorts International from $52.00 to $54.00, assigning the stock an “overweight” rating in a research report on February 14.

    Additionally, JMP Securities reiterated a “market outperform” rating and set a $57.00 target price for MGM Resorts International on the same day.