The city of Las Vegas has many casino properties, and it’s getting difficult to keep track of who owns what in Sin City, especially nowadays when casino acquisitions are happening all the time. One of the companies that has been looking to get rid of some properties that it owns is MGM Resorts International.
However, to do that, it must first consult the Nevada Gaming Commission, which just recently approved the sale of the legendary casino property called Circus Circus.
The most likely person to become the owner of the property currently owned by MGM is Phil Ruffin. Ruffin is not a new name to the casino industry, as he is the owner of a popular casino and hotel property that goes by the name of Treasure Island, which is just one of many properties owned by the billionaire.
Circus Circus has been on Ruffin’s radar for quite a while, as he considers that property not yet another addition to the lengthy list of things he owns. In other words, Ruffin has been rather serious about obtaining Circus Circus, and it seems that he is now just one step away from doing so as the NGC gave the green light to the deal made between Ruffin and MGM.
The deal was announced back in October, but the NGC took some time to review it and eventually give the nod to both sides. Ruffin had to pay a total of $825 million in order to acquire the property in the Entertainment Capital of the World.
Terms Of Deal
Ruffin will have to pay $662.5 million right away, and there will be a floating note with the due set to 2024, containing the additional $162.5 million. Once you take a look at it, it’s actually a great profit for MGM, which spent only $15 million to build it back in 1968.
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If we translate that to today’s standards, that would be somewhere around $110.8 million. Therefore, MGM still made a huge profit from this sale — much more than the original investment.
This sale is considered a good one by many industry professionals, mainly because MGM failed to use all the capacity Circus Circus offers. Ruffin has plans to correct its mistakes and maximize Circus Circus’ operations.
One of the things that shows how MGM actually neglected the property a bit is located on the second floor of the venue. Namely, it’s 20,000 square feet of nothing. It’s a huge abandoned area. Ruffin was well aware of that and told the NGC that he would invest more money in the property and turn the abandoned area into a big bingo hall.
Ruffin is also going to focus on the Las Vegas Festival Grounds. It’s a huge plot of land that is mainly used for various outdoor activities, such as music concerts, conventions, and more. Ruffin has big plans for this area, which can take up to 80,000 visitors.
Therefore, it’s safe to conclude that Ruffin has big plans for the future of Las Vegas and some of its iconic properties. On the other hand, MGM is very careful about its finances and continues to let go of some of the properties that it believes are a financial burden to the company.
The Bellagio has already been taken off its hands, and it now has plans to do the same with MGM Grand and Mandalay Bay, both of the properties being located in Vegas. However, the property that is most likely to be sold next is MGM Springfield, which already showed some poor performance figures in the recent past.