The Nevada Gaming Commission (NGC) gave its permission to MGM Resorts International to sell Circus Circus to Phil Ruffin for $825 million.
MGM trimming its business
MGM Resorts is the biggest operator in Las Vegas. In recent months, it has been thinning its business and realigning its priorities. The company announced in mid-October that it plans to sell the Circus Circus business. It also announced the sale of Bellagio a real estate company controlled by Blackstone Group. The sale brought in $4.25 billion for MGM and was completed in November.
According to reports, the agenda of NGC meeting on December 19 which suggests that the Circus Circus sale was discussed by the commission before being approved. Billionaire Phil Ruffin will pay $662.5 million in cash to MGM. He will send another $162.5 million note to the operator in 2024.
MGM’s stint with Circus Circus
In 2005, MGM acquired Mandalay Resort Group and received the Circus Circus Las Vegas property as well. The property originally opened in 1968 with a $15 million opening cost. It has a 5-acre indoor amusement park, a 37-acre festival ground, and a 10-acre RV park as well. It employs 2,300 people in 2019.
Ruffin is not new to the casino business in Las Vegas. He already owns a stake in Trump International Hotel and Treasure Island. He talked to the Nevada Gaming Control Board (NGCB) last month about the Circus Circus sale. What makes the property different from its Strip peers is that it is considered a more cost-effective brand. However, it also lacks the panache of other MGM properties in the city, like the Mirage and Bellagio. It was considered an odd property for the MGM portfolio because of which it never added it to the M Life Rewards program as well.
Ruffin told the NGCB during his meeting last month that he wants to maintain the cost-friendly reputation of the property. He said that he could opt for room renovations and bring more gaming options to the property like bingo. The property already has a 20,000 square foot unused space on its second floor which could become the home to new gaming options.
MGM is planning to divest more of its properties in the coming months. It is working with MGM Growth Properties LLC, its real estate investment trust to shed off Mandalay Bay.