MGM Resorts International
MGM Resorts International is an American global hospitality and entertainment company operating destination resorts in Las Vegas, Massachusetts, Michigan, Mississippi, Maryland, Ohio, and New Jersey, including Bellagio, Mandalay Bay, MGM Grand, and Park MGM.
Formerly
- Grand Name Co. (1986–1987)
- MGM Grand Inc. (1987–2000)
- MGM Mirage (2000–2010)
US5529531015 
1986
Paradise, Nevada, U.S.
- Bill Hornbuckle (CEO and president)
- Paul Salem (chairman)
$12.899 billion (2019)[1]
1,439,372,000 United States dollar (2022)
1,473,093,000 United States dollar (2022)
$33.9 billion (2019)[1]
$7.7 billion (2019)[1]
74,500 (2020)
MGM Resorts Vacations
Diaoyutai MGM Hospitality
BetMGM
LeoVegas
The company began operations in 1987 as MGM Grand, Inc. and became MGM Mirage in 2000, after acquiring Mirage Resorts. In the mid-2000s, growth of its non-gaming (lodging, food, retail) revenue began to outpace gaming receipts and demand for high-rise condominiums was surging, with median property prices in Las Vegas twice the national average.[2][3] The company shifted its focus from owning and operating resorts and casinos to developing and building real estate in the leisure and gaming industry—launching the massive CityCenter mixed-use project,[4][5] which was at the time of its construction the world's largest construction site and ranks as one of the most expensive real estate projects in history.[6] City Center's development coincided with the global financial crisis, causing more than $1 billion in writedowns in its valuation.[7]
Billionaire investor Kirk Kerkorian and his Tracinda Corporation were, until 2009, the majority shareholders of MGM Mirage; Kerkorian was the former owner of the Metro-Goldwyn-Mayer movie studio, from which MGM Grand derived its name. Following a $1 billion stock offering by MGM Mirage amidst the global credit crunch, Tracinda's shares were diluted from 53.8 percent to 39 percent.[8][9] On June 15, 2010, shareholders voted for MGM Mirage to change its name to "MGM Resorts International".[10]
In 2015, the company split into two forming MGM Growth Properties, a real estate company, while MGM Resorts shifted to operating properties.[11][12] Today, MGM Resorts is the largest casino company in the world by revenue, making $13.13 billion USD in revenue in 2022.[13]
History[edit]
Background and early ventures (1969–1988)[edit]
The company's background can be traced to 1969, when airline and casino tycoon Kirk Kerkorian bought a controlling stake in the Metro-Goldwyn-Mayer (MGM) film studio.[14] In 1970 and 1971, Kerkorian struggled with debt from his acquisitions of MGM and Western Airlines, and was forced to sell a majority of his casino company, International Leisure, to Hilton Hotels at a steep discount.[15][16] When the Las Vegas Hilton, the casino he had built, subsequently became the most successful hotel in Las Vegas, Kerkorian was inspired to lead the studio into the gambling industry.[15] It opened the original MGM Grand Hotel and Casino (now Horseshoe Las Vegas) in 1973.[17] The MGM Grand Reno followed in 1978.[18]
By 1979, the two hotel-casinos accounted for most of MGM's income, and the company announced a plan to split itself in two.[19] The next year, the film studio was spun off as a new company, while the original company, renamed as MGM Grand Hotels Inc., retained the two hotel-casinos.[20] Kerkorian held a 47 percent stake in both companies.[20]
In 1985, Kerkorian began seeking a buyer for MGM Grand Hotels, to allow him to concentrate on running United Artists and on developing new properties under the MGM Grand name.[21] A deal was reached for Bally Manufacturing to buy the company; the deal closed in April 1986,[22] and the two casinos were renamed under the Bally's brand.[23] The terms of the sale allowed Kerkorian to retain rights to the MGM Grand name, and plans were announced to offer the stockholders of MGM Grand Hotels shares in a new company that would hold the naming rights.[24]
The company now known as MGM Resorts International was formed in 1986 as Grand Name Co.[25] as a subsidiary of Kerkorian's Tracinda Corporation.[26] It was renamed in 1987 as MGM Grand, Inc.[25]
The company's first venture was MGM Grand Air, a luxury airline offering service between New York and Los Angeles, which launched in September 1987.[27] The company also made an offer to take over financially struggling Pan American World Airways, but this offer was rejected by Pan Am's board in November 1987.[28]
In August 1987, MGM Grand bid $152 million for the bankrupt Dunes Hotel in Las Vegas, but was beat out by Japanese billionaire Masao Nangaku.[29] Instead, the company acquired the Desert Inn and Sands casinos in February 1988 from Summa Corporation for $167 million.[30] The Sands was sold to Sheldon Adelson's Interface Group for $110 million in April 1989.[31]
First casino developments (1989–1999)[edit]
In September 1989, the company announced plans for a $700-million Hollywood-themed complex, including a 4,000-room hotel and a theme park.[32] The Desert Inn site was initially considered as a location for the project,[32] but within weeks the location was finalized as the Marina Hotel and Casino and the Tropicana Country Club,[33] which MGM Grand acquired for $93 million plus $30 million in stock.[34] The company put the Desert Inn up for sale to focus efforts on the new project,[35] but found no outside bidders, and agreed to sell it to Tracinda for $130 million.[36] Construction on the MGM Grand Las Vegas and the MGM Grand Adventures theme park began in October 1991,[37] and the property opened in December 1993 at a final cost of $1 billion.[38] The park permanently closed in 2002 due to a lack of interest.[39]
The company moved its headquarters from Beverly Hills to Las Vegas in July 1992.[40]
During construction of the MGM Grand, the company acquired an option to buy an 18-acre site across the street from the project.[41] Gary Primm of Primadonna Resorts approached MGM president Bob Maxey in 1994 with an idea for the site: a casino recreating the New York skyline.[42] A joint venture was formed between the two companies, and construction began in March 1995.[43] Completed at a cost of $460 million, the New York-New York Hotel and Casino opened in January 1997.[44]
With New York-New York under development, MGM Grand made moves to expand in several other markets. An exploratory agreement to develop two casinos on the Chinese island of Hainan was announced in August 1994,[45] but came to nothing. In Darwin, Australia, a lucrative market attracting high rollers from Pacific Rim countries,[46] the company considered building a hotel,[47] but instead bought the Diamond Beach Hotel and Casino,[48] renaming it as the MGM Grand Darwin. MGM announced plans for an Atlantic City casino in July 1996.[49] In Michigan, where voters approved casinos in November 1996, MGM made plans for a bid on one of the three available gaming licenses,[50] which would eventually be approved and open in July 1999 as the MGM Grand Detroit.[51]
In South Africa, with casino gambling newly authorized, MGM announced plans in August 1996 to develop 15 properties in conjunction with Tsogo Sun.[52] The first, a temporary casino in Johannesburg's Sundome, opened in October 1998.[53] Three more casinos followed before MGM agreed to sell out its interest in the properties to Tsogo Sun in November 2001.[54]
Since the initiation of New York-New York, analysts had speculated that MGM Grand or Primadonna would buy out the other's interest in the project.[55] Instead of making such a cash-intensive purchase,[56] however, MGM agreed to buy Primadonna outright for $276 million in stock plus $336 million in assumed debt.[57] The merger closed in March 1999,[58] giving MGM ownership of three casinos and two golf courses at the Nevada–California state line, in addition to full control of New York-New York.[59]
Mirage Resorts merger (2000)[edit]
In February 2000, MGM Grand made an unsolicited offer of $17 a share to buy Mirage Resorts, which had floundered due to disappointing results at its new Beau Rivage and Bellagio resorts.[60] Analysts expected a protracted battle, with Mirage founder Steve Wynn seen as unwilling to give up control but under pressure from institutional investors.[61][62] Mirage rejected the offer,[63] but Wynn met with Kerkorian the next day and named a price of $21 a share.[64] The companies agreed on the higher price, for a total of $4.4 billion plus $2 billion in assumed debt.[65] The merger closed in May 2000,[66] giving MGM ownership of the Mirage, Treasure Island, Bellagio, Boardwalk, and Golden Nugget casinos in Las Vegas, the Golden Nugget in Laughlin, and the Beau Rivage in Mississippi, and a half share of the Monte Carlo. The company changed its name to MGM Mirage in August 2000.[67] Mirage had also owned a half stake in the Borgata, a planned casino in Atlantic City, in a joint venture managed by Boyd Gaming.[68] Work on the Borgata continued apace, and it would open in July 2003.[69]
Stalled developments (2001–2004)[edit]
In 2001 and 2002, following the merger with Mirage, the company explored options for its next major development project, including in the Las Vegas, Atlantic City, Chicago, and Macau markets.[70] The 55-acre site of the Boardwalk casino on the Las Vegas Strip was earmarked for a technologically advanced megaresort targeting a Generation X demographic.[71] In Atlantic City, MGM shifted focus from its previously announced boardwalk site to a proposed billion-dollar hotel and casino on a 55-acre tract adjacent to the Borgata, where Wynn had planned to build the Le Jardin casino.[72][73] In the Chicago market, MGM agreed to pay $600 million to buy the unfinished Emerald Casino in Rosemont, Illinois, whose investors had been accused of ties to organized crime.[74] The deal was rejected, however, by state gaming regulators,[75] and MGM then backed off its effort, saying that Illinois's casino tax was too high.[76] In Macau, where Stanley Ho's 40-year government-granted monopoly on gambling was coming to an end, MGM submitted a bid for one of three available gaming concessions,[77] but it was not selected, losing out to Ho, Las Vegas Sands, and Wynn Resorts.[78]
MGM made moves into the United Kingdom market after a 2001 government report called for loosening of the country's gambling regulations.[79] It opened an online casino, playmgmmirage.com, licensed in the Isle of Man, a British dependency,[80] and it applied for a license to run an online sports betting site in the U.K.[81] It acquired a twenty-five percent stake in a company developing the small Triangle Casino in Bristol,[79] which went on to open its doors in February 2004.[82] It inked deals to build casinos at the Olympia Exhibition Centre in London,[83] St James' Park in Newcastle,[84] Meadowhall Shopping Centre in Sheffield,[85] the National Exhibition Centre in Birmingham,[86] Sportcity in Manchester, Glasgow Harbour, King's Waterfront in Liverpool, and at a proposed stadium in Salford.[87] The company also signed a $490-million deal to acquire Wembley plc, owner of seven greyhound tracks in Britain and four in the United States.[88]
The British expansion plans ultimately amounted to nothing. MGM closed its online casino after less than two years, citing uncertainty in American regulations and competition from established British brands.[89] The Wembley acquisition turned into a bidding war, with MGM finally losing out to an investors group including Kerzner International.[90] The Triangle Casino was sold off to Stanley Leisure in 2006.[91] The company's other development plans were scuttled as the government scaled down, and eventually abandoned, the plan to allow large "super-casinos".[92][93]
In 2004, the company disposed of some of its smaller properties, selling the two Golden Nugget casinos (Golden Nugget Las Vegas and Golden Nugget Laughlin) to Poster Financial Group for $215 million,[94] and the MGM Grand Darwin to Skycity Entertainment for $140 million.[95]
Mandalay merger (2004–2005)[edit]
MGM entered into quiet merger talks with Mandalay Resort Group in early 2004.[96] The potential acquisition would give MGM control of more than half the hotel rooms on the Las Vegas Strip.[97] Mandalay assets attractive to MGM included low-end casinos like Excalibur and Circus Circus to broaden MGM's "high roller" appeal;[98] the Mandalay Bay Convention Center, which would allow MGM to compete directly with the Sands Expo center in the convention market;[97] and at least two prime developable sites on the Strip.[99] The talks went public in June, when MGM announced an offer worth $7.65 billion.[100] Mandalay rejected that offer because of a clause allowing MGM to back out if antitrust regulators demanded the sale of any properties.[100] Analysts speculated that another bidder such as Harrah's or Boyd might enter, but none did,[96] and MGM and Mandalay soon agreed on a $7.9 billion deal.[101]
MGM executives were confident that antitrust regulators would not require the sale of any of the two companies' properties.[102] Michigan law, however, forbade one company from owning multiple casinos, requiring the sale of either the MGM Grand Detroit or Mandalay's 54 percent stake in the MotorCity Casino.[103] After some vacillation about which property to sell,[104] Mandalay accepted a $525-million offer for its interest in MotorCity from Marian Ilitch, the casino's second largest shareholder.[105] Meanwhile, in Illinois, where MGM needed regulatory approval to take over Mandalay's 50 percent interest in the Grand Victoria Casino, a lack of quorum on the state Gaming Board threatened to delay the merger.[106] MGM considered a sale to the casino's other owner, the Pritzker family,[107] but ultimately gained approval for a plan to place the property under control of a trustee until completion of the licensing process.[108] The FTC approved the merger as predicted,[109] and MGM obtained a $7 billion line of credit to finance it.[110] The sale closed on April 25, 2005 for a total of $7.9 billion, including $3 billion in assumed debt.[111]
The Mandalay acquisition made MGM Mirage the largest gaming company in the world,[111] but it was surpassed just two months later when Harrah's Entertainment acquired Caesars Entertainment[112] in a deal that had been spurred on by news of the MGM-Mandalay merger.[113]
MGM Hospitality[edit]
In 2007, MGM Hospitality was established to operate hotels, resorts and residences in key destinations around the globe using the brands of Bellagio, MGM Grand and Skylofts.[194]
In 2009, the company formed Diaoyutai MGM Hospitality, a joint venture with Diaoyutai State Guesthouse of China (the Chinese Foreign Ministry’s venue for VIPs) which develops and operates 5-star hotels and resorts in China.[195]
In April 2013, Hakkasan Las Vegas at the MGM Grand opened its 80,000-square-foot venue on five levels.[196] In 2014, MGM and Hakkasan Group announced the formation of a joint venture named MGM Hakkasan Hospitality, which would develop non-gaming hotels around the world.[197] The partnership was terminated a year later.[198]
Staff and management[edit]
The company's top executives include: James Murren, chairman and chief executive officer; Bill Hornbuckle, president of global casino marketing; Brian Sandoval, president of global gambling development; Corey I. Sanders, chief operating officer; and John McManus, executive vice president, general counsel and secretary.[229][230][231][232]
As of 2015, according to the company, among the company's management ranks, more than 38 percent are minorities and nearly 43 percent are women.[233] The company has received wide recognition for its diversity and inclusion initiatives, such as: 40 Best Companies for Diversity (Black Enterprise Magazine),[234] Top 10 Companies for Latinos (DiversityInc Magazine),[235] Best Places to Work for LGBT Equality (Human Rights Campaign Foundation),[236] Top 10 Regional Companies(DiversityInc)[237] and Top Corporation for Women's Business Enterprises (Women's Business Enterprise National Council).[238] Fortune magazine named MGM Resorts one of the World's Most Admired Companies in 2017.[239]
Controversy[edit]
MGM Resorts International received criticism for filing a lawsuit on July 18, 2018, against survivors and relatives of victims slain in the October 1, 2017 Las Vegas shooting.[240] MGM has claimed that, because it utilized the security services of Contemporary Services Corporation, a vendor certified by the Department of Homeland Security at the time of the October 1 shooting, any proceedings should be held in federal court where MGM is shielded from liability by the Support Anti-Terrorism by Fostering Effective Technologies Act, also known as the Safety Act.[241] MGM said they are insured for $751 million towards the settlement of the lawsuit which MGM believes will be settled in May 2020.[242] Robert Englet, an attorney to some of the survivors, describes the countersuit as an attempt to get a more favorable judge.[243] Brian Claypool, another attorney of the survivors', called the lawsuits a “public relations nightmare”.[244] MGM's controversial action prompted a public outcry from survivors of the shooting, family members of the victims, lawmakers, and media members in New York State urging the New York State Gaming Commission to block MGM from completing its $850 million deal to purchase Empire City Casino and Yonkers Raceway in Yonkers, New York, which deal had been scheduled to close in January 2019.[245][246] In October 2019, MGM agreed to pay victims and survivors up to $800 million.[247]
Awards and recognition[edit]
The company continues to receive wide recognition for its diversity and inclusion initiatives, such as: 40 Best Companies for Diversity (Black Enterprise Magazine) in 2012,[234] Best Places to Work for LGBT Equality (Human Rights Campaign Foundation) in 2013,[236] Top 10 Regional Companies (DiversityInc) in 2014,[237] Top 10 Companies for Latinos (DiversityInc Magazine),[235] and top 100 Companies for MBA Students (Universum Global) in 2014.[248] Fortune has named MGM Resorts one of the World's Most Admired Companies.[239]