MGM Resorts has confirmed it has struck a deal worth $450m in cash to sell the operations of Gold Strike Tunica to Cherokee Nation Entertainment Gaming Holdings.
The deal is expected to close in H1 of 2023 and represents around x11 Gold Strike’s average adjusted EBITDA from 2019-2021. For the 12 months ending December 31, 2021, Gold Strike recorded net income of $81.1m and an adjusted property EBITDA of $115m.
Following the completion of the deal, MGM Resorts’ master lease agreement with VICI Properties, which currently includes Gold Strike, will be reduced by $40m.
MGM stated that it anticipates the net cash proceeds after taxes and legal fees to be around $350m.
“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,” commented 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.”
Gold Strike first opened in 1994 and it was bought by MGM Resorts in 2005. A recognisable building in Tunica, it was reportedly the tallest building in Mississippi when first built.
“I want to thank all of our Gold Strike employees who have consistently delivered world-class gaming and entertainment experiences to our guests,” added 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.”