by Darren Moore
The hospitality and entertainment company Hard Rock announced Monday night that it will lease The Mirage from VICI Properties Inc. in a long term deal. During MGM Resorts’ third quarter results call early last month, CEO William Hornbuckle stated that The Mirage, a long-time pillar of the company’s Las Vegas Strip portfolio, was up for sale.
Hard Rock wants to build a guitar-shaped hotel on the land and rename it the Mirage Hotel Tower.
“This is a huge transaction for MGM Resorts and for Las Vegas,” Hornbuckle said. Being part of the opening crew for The Mirage in 1989, I know how wonderful it is and how amazing it is for the Hard Rock staff.
Las Vegas Sands sold the Venetian Resort Las Vegas and the Sands Expo and Convention Center earlier this year. Apollo Global Management paid $2.25 billion for the Venetian’s operating firm, while VICI Properties paid $4.0 billion for the land and real estate assets.
VICI will also purchase the Hard Rock-MGM Resorts real estate holdings at The Mirage. During the rebranding and refurbishment, MGM will retain The Mirage branding and licence it to Hard Rock for up to three years. The deal should finalise in the second part of next year.
The Mirage debuted in 1989, ushering in a new era of mega-resorts on the Las Vegas Strip. MGM Resorts purchased The Mirage in 2000 for about $4 billion from former casino entrepreneur Steve Wynn. The Bellagio and Treasure Bay resorts were also part of the deal.
The Mirage was the home of Siegfried Fischbacher and Roy Horn, the late German-American magician and entertainment team famous for their white lions and tigers shows. The act was one of the most popular in Las Vegas until Horn was attacked by a tiger in 2003.
The sale of the resort is the latest in a string of transactions that have shifted MGM Resorts’ focus from real estate to operations and internet gambling.
Recent MGM Resorts sales-leaseback arrangements with Blackstone have seen the investment firm acquire real estate while the casino operator retains management rights. The Bellagio, MGM Grand, and CityCenter — home to the Aria Resort & Casino and Vdara Hotel and Spa — were all part of those agreements according to Vegas casino news sources.
In September, it announced intentions to buy the Cosmopolitan of Las Vegas operations for $1.6 billion as part of Blackstone’s $5.65 billion sale of that property. On-site casino gaming and sports betting are becoming increasingly important to MGM Resorts. In a third quarter investor presentation, the business expects to win as much as a quarter of the U.S. online gaming market share.
As Hornbuckle stated last month, “We know that customers who use both channels are more valuable.”
Selling real estate allows MGM Resorts to reach customers who prefer to play online rather than travel to Las Vegas.
“This news culminates a series of transformational transactions for MGM Resorts,” said Paul Salem, chairman of MGM Resorts International’s board of directors. In addition to CityCenter, the Company will now have a strong balance sheet, a top portfolio, and enormous financial resources to accomplish its strategic objectives.
Darren lives & breathes sports betting and is always sniffing out his next value bet. His favourite sports to bet on are the NFL, horse racing and UFC but he will bet on anything if he thinks the odds are favourable.
