MGM Resorts International announced that it has reached an agreement to sell the operations of Gold Strike Tunica, a 1,133 rooms casino hotel in Mississippi, to Cherokee Nation Entertainment Gaming Holdings, LLC, a subsidiary of Cherokee Nation Businesses, for $450 million in cash, subject to customary adjustments.
"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," said Bill Hornbuckle, CEO & President, MGM Resorts International.
For the twelve months ended December 31, 2021, Gold Strike reported net income of $81.1 million and Adjusted Property EBITDAR of $115 million, calculated as net income of $81.1 million, adjusted for $0.4 million of interest and other non-operating expense, $8.0 million of depreciation and amortization, $0.1 million of net property transactions, and $25.4 million of rent expense associated with triple-net operating leases.
Pre-pandemic, Gold Strike reported Adjusted Property EBITDAR of $67 million in 2019. At the closing of the transaction, MGM Resorts' master lease agreement with VICI Properties (a publicly traded real estate investment trust), which currently includes Gold Strike, will be amended to reduce annual rent by $40 million. MGM Resorts International expects net cash proceeds after taxes and estimated fees to be approximately $350 million.
Gold Strike opened in 1994 and was acquired by MGM Resorts in 2005. At 32 stories tall, it was the tallest building in Mississippi at the time it opened.
The transaction is expected to close in the first half of 2023, subject to regulatory approvals and other customary closing conditions.