Boyd Gaming has announced they sold their 50% stake of the top casino in Atlantic City, Borgata Casino, to MGM for a hefty price.
Borgata Casino has been owned and operated by both MGM and Boyd since it was first opened in 2003. The hotel and casino was modeled after high-end properties in Las Vegas, providing a spa, upscale restaurants, and nightlife entertainment. The Boyd deal will close in the third quarter of this year, after which MGM will be the sole owners of Borgata Casino.
Boyd Gaming reportedly sold the Borgata Casino stake for $900 million, plus half of any tax settlements that MGM makes with Atlantic City in the future. Boyd expects to receive around $600 million after paying off debts, and an additional $180 million through tax returns from the city government.
This deal made gambling news partly because the future of gambling in Atlantic City is unclear. The city has faced well documented financial struggles over the years, with its annual casino revenue falling by half since 2005. New casinos in New York and Pennsylvania are partly to blame for this.
MGM Resorts CEO Jim Murren has faith in Borgata Casino
Murren believes that the acquisition of Borgata Casino is important in MGM’s expansion into the East Coast. “We viewed Borgata as what it is, a high-quality, high-performing property that’s bucked the trend in a very rough market. Borgata is the premier resort in Atlantic City and a great addition to our growing presence in the Northeast,” said Murren.
For Boyd Gaming, the deal was a way to reduce their overall debt and improve their balance sheet. Boyd gaming has acquired three Las Vegas casinos since April, and is in the middle of revamping their company portfolio. “Under our leadership, Borgata firmly established itself as the East Coast’s most popular and successful entertainment resort throughout the last 13 years. “While we are pleased with the performance of this property, this transaction is an attractive opportunity to immediately unlock significant value for our shareholders,” said Keith Smith, President and CEO of Boyd Gaming.
It remains to be seen what changes MGM will make to the hotel and casino, but if you can’t make the trip to Atlantic City, check out our list of online gambling sites in the US! What do you think of Boyd’s decision to sell their stake to MGM? Leave your comment below!