MGM to sell Gold Strike Hotel & Casino operating rights to Cherokee Nation for $450 million
Las Vegas-based and NYSE-listed casino operator MGM Resorts International has announced that it is going to sell its operating rights for Tunica-based Gold Strike Hotel & Casino to Cherokee Nation Entertainment Gaming Holdings LLC for $450 million in cash.
Located in the upper corner of Tunica, Mississippi; the Gold Strike Hotel & Casino property features a restaurant, a bar and a casino. All guest rooms at the property comes with air conditioning, a seating area, a flat-screen television with a large number of satellite channels, a private bathroom, a hairdryer and free toiletries.
The transaction is scheduled to close sometime in the first half of 2023. After-tax proceeds from the transaction have been pegged at $450 million. Selling Gold Strike Hotel & Casino’s operating rights will allow MGM Resorts International to sharpen its focus on Beau Rivage in Biloxi.
MGM CEO Bill Hornbuckle said in a statement, “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.”
The Gold Strike property was launched in the year of 1994, and MGM Mirage acquired it 2005 as part of the broader $7.9 billion acquisition of Mandalay Resort Group. That acquisition also added Mandalay Bay, Excalibur, Luxor, Circus Circus, and Slots-A-Fun in Las Vegas to the portfolio of MGM. However, the casino resort company has since offloaded Circus Circus and Slots-A-Fun.
Among Gulf Coast regional gambling-friendly properties, Gold Strike has emerged as a solid performer over the years. Last year, the casino-hotel reported net income of $81 million on adjusted property earnings before interest, taxes, depreciation, amortization & restructuring/rent costs (EBITDAR) of $115 million. That figure was well ahead of the EBITDAR of $67 million that the property had generated in 2019, a year before the onset of Covid-19 pandemic.
Still, MGM decided to sell its operating rights for the property to the Tunica-based tribal operator so that it could reprioritize future capital expenditures towards other opportunities to further enhance customers’ experience.
The sale of Gold Strike operating rights to Cherokee Nation marks the second such transaction in the recent past. Last December, MGM sold the operating rights of the Mirage to Hard Rock International for $1.075 billion.