MGM Resorts International (MGM) has agreed to sell Gold Strike Tunica’s operations to Cherokee Nation Entertainment Gaming Holdings, a Cherokee Nation Businesses subsidiary, for $450 million in cash, subject to usual adjustments.
“I want to thank all of our Gold Strike employees who have consistently delivered world-class gaming and entertainment experiences to our guests,” said Bill Hornbuckle, CEO & President, MGM Resorts International. “Gold Strike is a wonderful property with a bright future ahead. Strategically, though, we decided to narrow our focus in Mississippi to a single resort – Beau Rivage – and dedicate more of our time and resources towards continuing to drive success at that leading, world-class resort and casino.”
Gold Strike announced net income of $81.1 million and Adjusted Property EBITDAR of $115 million for the year ended December 31, 2021, reflecting advantages from market-specific factors in the previous year. Gold Strike reported $67 million in Adjusted Property EBITDAR in 2019 before the pandemic. MGM Resorts’ master lease agreement with VICI Properties Inc. (NYSE: VICI), which currently contains Gold Strike, will be revised upon the completion of the acquisition to cut annual rent by $40 million. After taxes and expected expenses, the business estimates net cash proceeds to be around $350 million.
“This is a great outcome for the Company as we are able to reprioritize future capital expenditures toward opportunities that will enhance the customer experience at our other locations,” said Jonathan Halkyard, CFO & Treasurer, MGM Resorts International. “We appreciate VICI, as the real estate owner of Gold Strike, working constructively with CNE to facilitate a new lease agreement.”
MGM Resorts bought Gold Strike in 2005, after it first opened in 1994. The distinctive property, which stands 32 floors tall and rises above all other structures in Tunica, is one of the most identifiable structures in the city. When it was completed, the gold tower was said to be Mississippi’s highest structure.
Subject to regulatory clearances and other usual closing conditions, the transaction is scheduled to close in the first half of 2023.