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MGM Becomes Sole Owner of Borgata Casino After Boyd Sells 50% Stake
- June 1, 2016 By Oliver Young -
Yesterday Boyd Gaming announced that it sold its 50% stake of the Borgata Hotel Casino & Spa to MGM Resorts. This makes MGM the sole owner of the well known land based casino resort located in Atlantic City.
Boyd told media that it gave up half of its share in the body that controls Borgata Casino, Marina District Development Holding Company, to MGM Resorts for approximately $900 million. The company expects the deal to be closed in Q3 this year.
In addition, the company also expects to get $600 million beforehand because it had deducted its share of the casino’s debt. Boyd will also get 50 percent of the property tax settlements in future with Atlantic City and this can win the company up to $90 million.
Plans to Sell the Borgata
The CEO at MGM Resorts, Jim Murren, told media that the partnership with Boyd has been a great one, however, he wants to bring their Mlife Rewards, a loyalty program, to Borgata Casino and make room for future growth of the property.
In addition, MGM is planning to sell the resort for $1,175 billion to their real estate investment trust MGM Growth Properties, which went in operation earlier in 2016. Afterwards a subsidiary of the company will lease the resort back from MGP and run the entire property.
The CEO at Boyd, Keith Smith also said that he is very pleased with the good performance of the Borgata adding that the half-share sale is a nice chance to unlock good value for shareholders. Smith added that the next step is to reduce the debt that had increased because of several acquisitions in Las Vegas.
MGM Also Responsible for the Future of the Borgata Websites
The selling of Boyd’s share to MGM puts the later company in charge of the leading online gambling operation in America. The online gambling sites linked to Borgata have ranked atop the regulated iGaming market revenue charts in New Jersey since the legalization of virtual gambling in 2013, however, this can change if the New Jersey PokerStars website still remains strong.
Nevertheless, MGM Resorts is entirely responsible for the future of the Bwin.party-powered sites. One of the future decisions will be to consider whether to prolong its partnership with the new owner of Bwin.party, GVC Holdings.
MGM will also have a role in deciding whether New Jersey will share liquidity of Internet poker with the operators in Nevada. The company isn’t running an online poker website in Nevada even though state regulators had given the company thumbs up to do so. Eventually, it’s up to be seen if MGM, as a leading online gambling operation in the US, will continue lobbing for iGaming in the other US states that are currently considering the legalization of online gambling.