The Nevada Gaming Commission (NGC) on Thursday gave the green light to MGM Resorts International for its $825 million sale of the Circus Circus to billionaire Phil Ruffin.
MGM, the largest operator on the Las Vegas Strip, announced plans to part with Circus Circus in mid-October. That came on the same day the company said it would sell the Bellagio to a real estate entity controlled by private equity firm Blackstone Group for $4.25 billion. That deal was completed last month.
A copy of the NGC’s Dec. 19 meeting agenda obtained by Casino.org confirms the matter of the Circus Circus sale was discussed and approved earlier today.
To acquire the property at the north end of the Strip, Ruffin is shelling out $662.5 million in cash and a $162.5 million note coming due in 2024.
MGM acquired Circus Circus Las Vegas in connection with its acquisition of Mandalay Resort Group in 2005,” according to a statement announcing the sale. “Originally opened in 1968, today the property has 2,300 employees and is home to the Adventuredome (a 5-acre indoor amusement park), a 10-acre RV park, and 37-acre festival grounds.”
The cost of opening the gaming property in 1968 was just $15 million.
Ruffin, who also owns Treasure Island and a stake in the Trump International Hotel on the Strip, appeared before the Nevada Gaming Control Board (NGCB) last month to discuss some of this plans for Circus Circus.
The venue has a reputation for being cost-effective relative to other higher-end Strip venues. But it also lacks some of the panache associated with other MGM Sin City properties, such as Bellagio and the Mirage. Those differences made Circus Circus a quirky fit in MGM’s Nevada portfolio. Cementing that notion is the fact that the casino was never part of the operator’s M Life Rewards program.
In his appearance before the NGCB last month, Ruffin said he would like to keep the property’s cost-friendly reputation intact. He also speculated that room renovations could take place in the future and new gaming options, such as bingo, could be added to a currently unused 20,000-square foot space on the second floor.
Along with the Circus casino, hotel, and RV park, Ruffin gets the 37-acre Las Vegas Festival grounds at Las Vegas Boulevard and Sahara Ave. He has said that while he has fielded offers for that land, he’s not interested in parting with it because it could be the crown jewel of the overall purchase.
MGM likely isn’t done shedding Las Vegas venues. The company is working with its real estate investment trust (REIT) MGM Growth Properties LLC (NYSE:MGP) to possibly divest the Mandalay Bay.
Last month, MGP announced a share sale aimed at raising cash, stoking speculation that the REIT could be a bidder for the real estate assets of the MGM Grand.
MGM Resorts has engaged in an exhaustive process to evaluate its owned real estate and remains committed to executing its asset-light strategy in a measured way that maximizes value for its shareholders,” said CEO Jim Murren in October.
With MGM Grand, the company would do a sale-leaseback deal, as it did with Bellagio, allowing it monetize the real estate while maintaining operational control of the gaming area and hotel.