MGM Resorts International has finally sold off its Gold Strike Tunica Casino Resort in Mississippi to CNE Gaming Holdings for a sum of $450 million.
CNE, a subsidiary of Cherokee Nation Businesses, first expressed interest in buying the 50,000-square-foot property in June 2022 and is looking to complete the deal during the first six months of 2023.
As part of the deal, CNE will take over operations of the resort by entering a long-term lease agreement with VICI Properties, the owner of the land on which the casino is situated. With the triple-net master lease agreement, CNE’s annual lease is now set at $40 million for the next 25 years with a subsequent 2% raise each year.
According to MGM International’s CFO, Jonathan Halkyard, the sale will give the company a capital boost that can be returned to shareholders and invested in other growth opportunities. After deducting taxes and estimated fees, MGM will be netting around $350 million from the sale.
Meanwhile, Gold Strike continues to report a steady growth in revenue. For the 2022 financial year, the resort reported net earnings of $47 million, and adjusted property earnings before interest, tax, depreciation, amortization and rent (EBITDAR) stood at $98 million.
The resort continues to cater to a wide range of guests with 1,100 hotel rooms, 125 suites, high-limit gaming, a sportsbook, a conference and convention center, and dining options such as the Chicago Steakhouse.
“This is a historic day of growth for our hospitality portfolio as we enter the commercial gaming industry, and we welcome the wonderful team at Gold Strike to the family,” said Mark Fulton, president and chief operating officer of Cherokee Nation Entertainment.
“For years, we’ve set the standard of excellence in gaming. We are excited to invest in this beautiful property and bring our three decades of industry experience to guests in the Mid-South market.”
MGM chief executive and president Bill Hornbuckle said: “Gold Strike is an iconic property in Mississippi, and the employees there represent southern hospitality at its finest. I wish Gold Strike well, and firmly believe a bright future is ahead for this property.”
Day-to-day operations go on as usual at Gold Strike as all of the resort’s employees have been retained despite the change of hands.