MGM Resorts International has dramatically improved its prospects in the United States, winning key approvals in Maryland and Massachusetts for more than $1.7 billion in new resort gaming development.
A state commission in Maryland has awarded the Las Vegas-based casino giant the state’s sixth and final license for a $935 million, 300-room resort at National Harbor overlooking the Potomac River within 10 miles of Washington, D.C.
Slated to open in 2016 with 3,600 slot machines, 140 table games, a theater, gourmet restaurants, a spa and high-end retail, MGM National Harbor, as it’s called, “has the potential to change not only the region’s skyline, but also the calculus for where tourists stay, where business groups hold conventions and where Washington lobbyists entertain,” said The Washington Post.
The resort is expected to employ about 4,000 people and generate upwards of $700 million in gambling revenues by its third year.
“This is a big deal for the entire region,” said Prince George’s County Executive Rushem L. Baker.
Margins could be impacted by the state’s high tax on slot win of 67%, offset somewhat by a friendlier 20% on table revenue, but MGM Chairman and CEO James Murren is duly optimistic. “I believe that this will be the most successful commercial [gambling] resort in the United States … outside of Las Vegas,” he told the Post, adding that the company will break ground as soon as it receives clearance from County Council and the Planning Board, a process that could take several more months.
MGM bested two competing bidders for the license: Greenwood Racing, which operates the Parx casino just north of Philadelphia, and Penn National Gaming, a major operator in the US regional sector.
Maryland currently is home to four casinos with a fifth, a Horseshoe-branded resort in Baltimore under development by Caesars Entertainment and scheduled to open next year.
In Massachusetts, MGM came out on top of a torturous investigative process to win a ruling of suitability that brings the company a crucial step closer to developing the only casino designated for the western part of the state.
Plans call for an $800 million resort in the city of Springfield featuring a 250-room hotel, an 89,000-square-foot casino and 70,000 square feet of retail shopping, restaurants and other non-gaming attractions.
The state’s enabling legislation, passed in 2011, provides for three licenses: in western Massachusetts, Greater Boston and in the southeast. Suffolk Downs racetrack in partnership with Mohegan Sun are competing with Wynn Resorts for the Boston-area license. Caesars Entertainment, the track’s original partner, was rejected by the Massachusetts Gaming Commission late last year as unsuitable for licensing.
In the west proposals by Mohegan Sun and Hard Rock International were rejected by voters in November, leaving MGM as the sole suitable licensee in that part of the state. The company still needs approval from the Gaming Commission before it can be awarded the license. MGM said in a statement that it expects to make its case before the commission at a public hearing at some point later this month or in February and have the license in hand by the spring.
Gambling revenue will be taxed at 25%. MGM also will pay the city of Springfield more than $25 million a year if the casino is built.
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