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MGM Resorts International is looking at potential sales of some of its casino assets. According to a report from Bloomberg News, the operator is exploring the sale of its casino operations at Ohio’s Northfield Park and Springfield, Massachusetts.
The company is working with financial advisers, but the discussions are “preliminary” and may not deliver any action, a confidential source told Bloomberg.
MGM Resorts encompasses 31 hotel and gaming destinations globally. They also run BetMGM Casino online.
MGM’s management is disappointed with the company’s share price
Earlier in the year, some analysts said that MGM Resorts (NYSE: MGM) may look to sell some of its casino assets this year in a bid to increase its share price.
MGM’s management has been unsatisfied and began consulting financial advisors upon review of its share price.
“Our original valuation of this market simply was off – full stop,” MGM chief executive officer Bill Hornbuckle told Bloomberg News reporters. They gathered in the office of Thomas M. Ashe, chief of staff of Mayor Domenic Sarno, in January last year.
The stock has grown less than 5% in the last two years despite an increase in sales and profit. MGM Resorts reported net revenue of $4.4 billion in the final quarter of 2023, a 22% annual increase.
Real estate at MGM Springfield and MGM Northfield Park have the same owner
Vici Properties, a New York-based investment firm, owns the real estate at both casinos mentioned in the report. The company acquired MGM Growth Properties, MGM’s REIT affiliate, less than two years ago.
MGM Northfield Park features live harness racing and simulcasting with over 200 annual harness racing nights. The property also has a casino and is located some 20 miles southeast of Cleveland.
MGM took over the casino’s management in 2019, previously owned by Hard Rock. According to its monthly performance, the casino is among the top five Ohio operators.
In 2014, MGM received a license from the Massachusetts Gaming Commission (MGC) to operate a Springfield casino in the heart of Metro Center. The casino opened in August 2018, launching online sports betting in January 2023.
But the casino hasn’t fulfilled its owner’s expectations. According to MGC’s February 2024 revenue report, MGM’s retail competitors in the state (Encore Boston Harbor and Plainridge Park Casino) each collected over $5 million in total bets.
Combined, the two competitor retail sites collected 87% of all wagers in February 2024, while MGM Springfield reported only $1.6 million. However, MGM Springfield placed second in revenue earned.
