MGM finishes acquisition of Hard Rocksino.
MGM Resorts International, a Vegas-based gaming behemoth, has finished acquiring Hard Rock Rocksino Northfield Park in Ohio. This acquisition is marked by the renaming of the establishment to MGM Northfield Park. What advantages does this acquisition hold for the market leader?
Favorable sports betting conditions
The MGM takeover of the Hard Rock Casino in Ohio is complicated: until July last year, the original owner of the property was the entertainment firm Milstein Entertainment, which leased the ambiance to Hard Rock. The property was subsequently bought by MGM subsidiary MGM Growth Properties (MGP) in September for around $1 billion (€890 million). Now, the main group is taking over the entire operating assets of the property and leasing it to MGP at a price of $275 million (€244.7 million) per year. The property has been rebranded MGM Northfield Park.
This transaction has given MGM a substantial presence in the Ohio market. MGM intends to capitalize on the planned legalization of sports betting in the seventh-largest state in the US, which has a population of around 12 million. The permit for regulated sports betting is expected within the current quarter. Therefore, MGM has a prime location between Cleveland and Akron, two major cities. Jim Murren, MGM CEO, even commented on the newly acquired establishment:
"Throughout the years, we've strategically and thoughtfully expanded our presence in key US regions. This acquisition allows us to leverage our expertise, maximize cross-marketing efforts, and drive growth. The new resort reinforces this strategy. We're excited about the future of MGM Northfield Park as it solidifies itself as the market leader in Ohio under the MGM brand."
MGP's CEO, James Stewart, also highlighted the benefits for shareholders on New York's Wall Street, stating:
"By adding the property to the master lease, MGP shareholders will continue to benefit from our market-leading net lease coverage, substantial cash flow, and strong credit profile."
Ohio's Largest Casino Resort
The hype surrounding the acquisition is valid because the original Hard Rock Rocksino Northfield Park is Ohio's largest casino resort. According to Murren, this resort fits "perfectly into MGM's portfolio."
The atmosphere includes 2,300 video slots, several retail outlets, gastronomic facilities, entertainment options, and an in-house horse racing track. In the year to June 30, 2018, Hard Rock Rocksino reported net revenue of approximately $293 million (€212 million) and adjusted profits of $94 million (€83 million), only surpassed by the Ohio market.
With the anticipated sports betting legalization in Ohio and potential sports betting deals within the last few months, including with MLB (Major League Baseball) and NHL (National Hockey League), MGM has high hopes here. Since PASPA's repeal last May, sports betting regulation in the US is now the responsibility of individual states, but eight states have already legalized sports betting: Mississippi, New Jersey, Pennsylvania, and, naturally, Nevada's gambling mecca.
Full Speed Ahead with Atif Rafiq
To continue its expansion in North America, MGM recently appointed Atif Rafiq, previously Head of Digital at Volvo Cars, as its new President of Business and Growth. At Volvo, Rafiq spearheaded various strategic digitization initiatives and was active in the B2C sector. Prior to that, he served as Chief Digital Officer at McDonald's Corporation. Regarding his new role at MGM, Rafiq stressed:
"MGM Resorts sits at a unique crossroad between hospitality and an enormous potential for growth. Customers are thrilled with MGM's experience and offerings that entertain, delight, sustain, create cherished memories, and foster lasting connections. The company has a powerful brand, and I want to help widen and deepen customer relationships and focus on opportunities to do so."
MGM plans to appoint more digitalization-focused managers as part of a planned transformation strategy known as MGM 2020. Rafiq's primary objective is to concretize and expand MGM's digital market strategy. According to Jim Murren, the company is currently concentrating on hiring managers in the digitalization field. There are even plans for a Silicon Valley location, although more details have not been released. Keep watching for updates.
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Source: www.onlinecasinosdeutschland.com
