Global entertainment operator MGM Resorts International communicated that it has reached an agreement to vend the business of Gold Strike Tunica to Cherokee Nation Entertainment Gaming Holdings, LLC, a subsidiary of Cherokee Nation Businesses, for USD 450 million in cash, subject to customary adjustments.
For the twelve months ended December 31st, 2021, Gold Strike reported net income of USD 81.1 million and Adjusted Property EBITDAR of USD 115 million, reflecting benefits from certain market specific factors in the last year. Pre-pandemic, Gold Strike informed Adjusted Property EBITDAR of USD 67 million in 2019. At the closing of the transaction, MGM Resorts’ master lease agreement with VICI Properties Inc., which currently includes Gold Strike, will be amended to reduce annual rent by USD 40 million. The company expects net cash proceeds after taxes and estimated fees to be approximately USD 350 million.
Regarding this operation, Bill Hornbuckle, CEO & President, MGM Resorts International, declared: “I want to thank all of our Gold Strike employees who have consistently delivered world-class gaming and entertainment experiences to our guests. 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.”
Jonathan Halkyard, CFO & Treasurer, MGM Resorts International, added: “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. We appreciate VICI, as the real estate owner of Gold Strike, working constructively with CNE to facilitate a new lease agreement.”