MGM Resorts International has completed the sale of the operations of Gold Strike Tunica Resort in Mississippi to CNE Gaming Holdings, a subsidiary of Cherokee Nation Businesses (CNB), for $450.0m.
A deal to sell the land-based casino was agreed in June last year and was due to be completed in the first half of 2023. The transaction will be settled in cash.
After taxes and estimated fees, MGM said it expects to receive $350.0m in proceeds from the sale.
In line with this agreement, MGM’s master lease with Vici Properties that currently includes the Gold Strike property will be amended to reduce the annual rent by $40.0m to $730.0m to account for the sale.
Vici also entered into a triple-net lease agreement with CNB, with initial total annual rent set at $40.0m for 25 years and three 10-year tenant renewal options. Rent will then rise each year by 2.0%, with escalation of the greater of 2.0% and CPI, capped at 3.0%, from year 11 of the agreement.
Net income at the casino for the 12 months to December 31, 2022 was $47.0m and adjusted property earnings before interest, tax, depreciation, amortization and rent (EBITDAR) stood at €98.0m.
“Gold Strike is an iconic property in Mississippi, and the employees there represent southern hospitality at its finest,” MGM chief executive and president Bill Hornbuckle said. “I wish Gold Strike well, and firmly believe a bright future is ahead for this property.”