MGM Doubles Down on Las Vegas Strip Casino Bet
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Buying the Cosmopolitan resort casino was only one piece of making it part of the company's Las Vegas portfolio.
Nothing happens quickly on the Las Vegas Strip.
That makes sense when you're talking about a very crowded 4.2-mile stretch that's home to numerous megaresorts all battling for the same customers.
Building a new project in a city where the labor market has gotten very tight, the cost of construction materials has gone up, and working conditions are hindered by hot temperatures and desert-like dry air is a huge challenge.
Yet the biggest issue in building something new -- or even revamping an existing property -- in Sin City might simply be the size and scale.
Taking on a project like Caesars Entertainment's (CZR) - Get Caesars Entertainment Inc. Report rebranding of its Ballys resort/casino into its Horseshoe brand don't happen quickly. These are giant projects that involve thousands, sometimes tens of thousands, of people.
That's why moves that get announced often take years before they actually happen.
MGM Resorts International (MGM) - Get MGM Resorts International Report made a deal to acquire the Cosmopolitan for $1.63 billion in September 2021. That deal did not close until May 2022, but closing and integrating the property are two different things.
Now, MGM has big news about what's happening at Cosmopolitan.
MGM Makes a Big Move at Cosmopolitan
Taking over Cosmopolitan did not mean that the new property was integrated into MGM's booking system, loyalty program, or sports-betting platform. Chief Executive Bill Hornbuckle commented on the integration during the company's second-quarter-earnings call.
"Our focus now is on integrating the operations of the property into MGM Resorts' portfolio and working together to maximize the future success of this world-class resort," he said.
Now, meaningful progress on that integration has been made. MGM sent out an invitation to media, saying that the Cosmopolitan will join the company's sports-betting platform as of Aug. 22.
On Monday, Aug. 22, The Cosmopolitan of Las Vegas will take its first sports wager as the BetMGM Sportsbook & Lounge, celebrating the property's transition to the MGM Resorts family. Executives from BetMGM, The Cosmopolitan of Las Vegas and MGM Resorts will be available for interviews to discuss the leading sports betting operator’s expansion into the iconic resort.
MGM also invited the media to get a look ahead at the upcoming NFL season.
"Additionally, BetMGM’s trading team will offer media a preview to forecast the upcoming football season unveiling the biggest wagers, liabilities and the stories to look out for from the sports betting industry," the company said.
Media members who attend will also get to/have to see a performance by comedian Carrot Top, who has a longstanding residency at MGM's Luxor resort/casino.
MGM Has a Big Plan for Its Strip Properties
When MGM bought the Cosmopolitan, it also sold the Mirage. The two moves were effectively done as a trade. It was also done in concert with MGM spinning off its underlying real estate efforts to Vici Properties (VICI) - Get VICI Properties Inc. Report.
"This announcement marks the culmination of a series of transformational transactions for MGM Resorts during the last several years," said MGM Chairman Paul Salem.
"The monetization of our entire real-property portfolio, together with the addition of CityCenter and our agreement to acquire the Cosmopolitan of Las Vegas, will position the company with a fortress balance sheet, premier portfolio, and significant financial resources to pursue our strategic objectives."
Owning the Cosmopolitan made more sense for MGM based on the quality of the property, its location on the Strip, and its fit within the company's portfolio.
Unlocking that potential, however, requires that MGM fully integrate the property -- which had its own booking, loyalty, and betting platforms -- into the broader company.
That's not complete, but each step of the journey makes the Cosmopolitan more a part of the MGM family, which makes it easier to market to the company's existing loyalty user base.
Ultimately, complete integration of the Cosmopolitan will enable MGM casino players to book rooms there through MGM's channels, get complementary perks at the new property and earn points while playing at its casino.
