MGM Resorts International officially took over full controlling interest of the Borgata Hotel Casino & Spa in Atlantic City for a price tag of $900 million.
The news from MGM completes a deal reported this spring in which MGM was taking over Boyd Gaming Corporation’s 50 percent interest in Borgata.
Details of the MGM – Borgata deal
MGM reported that cash proceeds paid to Boyd for its interest in Borgata totaled $589 million. A portion of Borgata’s outstanding debt of $575 million was refinanced and then assumed by MGM Growth Properties LLC, according to a press release.
MGM CEO Jim Murren had this to say upon completion of the deal:
“As the premier resort in Atlantic City, Borgata is a great addition to our growing presence in the mid-Atlantic and Northeast United States.
“We are excited to welcome the talented Borgata leadership team and employees into MGM Resorts and look forward to serving guests with new and exciting opportunities through our diverse resort offerings, entertainment dominance and market-leading loyalty program, M life Rewards.”
And Tom Ballance, President of Borgata:
“We welcome MGM Resorts as the new operator and are excited to further utilize its best-in-class brand to continually bring quality experiences to our guests.”
Logistics of the MGM takeover
MGM now takes over full control over the top Atlantic City property, which generated $812 million in net revenue over the past year when the deal was announced in May.
Previously, Boyd had taken care of the day-to-day operations of Borgata, so that task obviously now falls on MGM.
Borgata customers will eventually be switched over to MGM’s rewards program, but not until a date to be determined in 2016.
MGM, fully invested in NJ
The takeover of a Borgata represents something of an about-face for MGM. Just six years ago, MGM was trying to divest itself from the New Jersey market and was shopping its share of the Borgata.
It also at one point had planned to build MGM Grand Atlantic City a project that was scuttled because of economic conditions.
Now, MGM clearly thinks Borgata and the New Jersey casino resort industry is on solid enough ground to assume full ownership of the property.
MGM and NJ online gambling
MGM comes into full control of Borgata’s land-based interest, but it now also becomes a major stakeholder in the NJ online gambling industry.
It’s possible a shakeup is in store on the online gambling side of things with MGM in charge.
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