The Las Vegas Strip’s business landscape experienced two dramatic developments on Tuesday, as MGM Resorts International sold two of its most prominent casino properties and Nevada gaming officials moved to bar a disgraced industry legend from doing business in Sin City.
MGM Resorts sold the Circus Circus to casino magnate Phil Ruffin, owner of the Treasure Island Hotel and Casino, in a deal valued at $825 million, including $662.5 million in cash. The transaction is expected to close by the end of fiscal 2019, according to a press release.
In a separate deal valued at $4.25 billion, MGM said it would place the Bellagio into a joint real estate venture, with the Blackstone Group as controlling partner. MGM will hold a five percent stake in the venture and retain operational control over the Bellagio for $245 million in rent.
“This transaction confirms the premium value of our owned real estate assets, highlights the unique value of Bellagio as a premier asset in gaming and solidifies our status as a premier operator of gaming and entertainment properties,” MGM Resorts CEO and Chairman Jim Murren said in a statement. “We will use the proceeds from this transaction, together with the proceeds from the pending sale of Circus Circus Las Vegas, to build a fortress balance sheet and return capital to shareholders.”
MGM will net more than $5 billion combined from the two transactions. The casino chain has been evaluating potential real-estate sales as a means of paying down its debt and providing insurance during times of financial uncertainty, such as a recession.
The Bellagio and Circus Circus were two of the last three remaining properties on the Strip where MGM owns the underlying real estate, according to the Las Vegas Review-Journal. The MGM Grand is the third hotel on the Strip.
MGM shares were flat in trading Tuesday and are up more than 10 percent so far this year.
Steve Wynn under fire
The Nevada Gaming Control Board asked the state’s gaming commission on Monday to bar Steve Wynn, the former longtime chairman and CEO of Wynn Resorts, from working in the industry.
“Mr. Wynn has repeatedly violated Nevada’s gaming statutes and regulations, bringing discredit upon the state of Nevada and its gaming industry,” the filing says. “He is unsuitable to be associated with a gaming enterprise or the gaming industry as a whole.”
Wynn has 15 days to respond to the filing, according to the Review-Journal.
Wynn resigned as CEO of his company in January 2018, days after a Wall Street Journal reported detailed dozens of allegations of sexual misconduct against the casino magnate. In one case, Wynn was alleged to have paid $7.5 million to settle a former female employee’s claim that he had raped her.
The allegations sent Wynn Resorts’ shares plunging and prompted the casino chain to deny payment of a $330 million severance package stipulated in his employment contract. Wynn has denied wrongdoing. He has sold off his remaining shares in Wynn Resorts.
The filing notes that Wynn failed to attend a hearing with gaming officials to address the allegations against him and accuses Wynn officials of failing to report the claims.
“When some of Mr. Wynn’s alleged misconduct became public in 2018, it resulted in negative reporting that was widely disseminated in media outlets around the world,” the filing adds. “This negative reporting and the underlying conduct harmed Nevada’s reputation and its gaming industry.”
Wynn has a personal net worth of more than $3 billion and helped develop several Las Vegas landmarks, including the Bellagio and Treasure Island.
Wynn’s attorney did not immediately respond to the Associated Press’ request for comment.