The US gambling group MGM Resorts International has announced a new acquisition as part of its expansion of its business activities. After the group had already secured the property of the former Hard Rock Rocksinos in Ohio last year via a real estate subsidiary, the takeover was completed a few days ago. MGM Resorts International will thus take over the entire operating assets and change the name of the casino to MGM Northfield Park. The main reason for the expansion of the business operations lies in the relaxation of the gaming law in the USA.
New personnel obligations
The MGM Resorts International were only able to report an important success in the personnel area a few days ago. With Atif Rafiq, an experienced man will join the Group , who is to become President for Business and Growth in the future. Rafiq is by no means a stranger, but has previously worked for carmaker Volvo and fast food giant McDonald’s, among others. The new man is primarily responsible for expanding the business areas. And although Rafiq will only officially take office in May, the first actions of the new growth president already seem to be casting their shadows. After all, MGM has now taken over the former Rocksino in Ohio, a real gambling institution in the state of . Introducing Rafiq:
“MGM Resorts is located at a unique interface between hospitality and an enormous appetite. Customers are excited about MGM’s experience and offerings, which entertain, delight, cheer, build valuable memories and create lasting relationships. The company has a strong brand and I want to contribute to expanding and deepening customer relationships and exploit all opportunities for this.”
And these words are what the new man in the group is obviously already doing. After all, it can be assumed that Rafiq already had a decisive say in the takeover decision. Beyond that the new addition is to provide in the future above all for the fact that in the digital range technical and high-level personnel are adjusted , which bring the US giant in this segment still further forward. Currently however the takeover of the Rocksinos stands in the focus.
Complex business with good end for MGM
That the takeover of the Rocksinos can be announced as successful, does not surprise thereby necessarily, however the way, how the business was completed, is enormously interesting. Until July 2018 the casino building was owned by Milstein Entertainment. The latter in turn leases the property to Hard Rock, before MGM subsidiary MGM Growth Properties bought the property in September 2018 for a good one billion US dollars. The main group has now secured the entire operating assets and acquired the property in its entirety. From now on, this will be leased to MGP by the MGM parent company for USD 275 million per year . The name has already been changed and the former Hard Rock Rocksino will in future be known as MGM Northfield Park.
However, why is this property so important to the Group? There are many reasons for this. Above all, however, an essential point is that Ohio belongs to one of the US states in which sports betting is to be legalized in the future . And that even quite soon in this quarter. For MGM this could result in a first-class situation, as an additional point of contact between the metropolises Cleveland and Akron could be created for players and betting fans. With a federal state with about twelve million inhabitants extremely promising prospects. MGM CEO Jim Murrren explained:
“Over the years we have strategically and carefully expanded our presence in the most important US regions. This is where we can contribute our expertise, maximize our cross-marketing efforts and drive business growth. The new resort reinforces this strategy. We are looking forward to the future of MGM Northfield Park, which will consolidate itself as the market leader in Ohio under the MGM brand.”
Figures speak for the property
In fact, the Rocksino in Ohio is not just any casino, but can be described as a true flagship of the state. Thus the complex offers place for more than 2,300 slot machines , numerous table plays and covers even its own horse racing course, on which regularly running are started. Beyond that also the numbers speak for the location. Thus the Casino gained from June 2017 to June 2018 a net conversion of well 293 million US Dollar . The adjusted profit was a good 94 million US dollars and so the company is the most profitable employer in the whole of Ohio.
The shareholders of MGM Resorts should also be pleased about the takeover, after all, they are building up a considerable base of high-quality real estate not least through their subsidiary MGP. This is exactly what MGP CEO James Stewart explains, who said about the takeover:
“By adding the property to master leasing, MGP shareholders will continue to benefit from our market-leading net rental coverage, our substantial cash flow and our strong credit profile.”
How the development of the resorts will continue in the coming months will be interesting to observe. It is already clear, however, that MGM has recognized the changed situation on the market and is endeavouring not to be left behind by the competition.