MGM wins Maryland casino license; Hard Rock to acquire Revel?

mgm-maryland-revel-hard-rockMGM Resorts has been awarded a Maryland casino license, beating out rivals Penn National Gaming and Greenwood Racing for the right to build the state’s sixth (and final) gaming joint. MGM’s proposal envisions a 23-acre, $925m facility at National Harbor in Prince George’s county just south of Washington, DC, featuring 3,600 slot machines, 140 gaming tables, a 300-room hotel, 1,200-seat concert theater and seven restaurants. The terms of the license prevent MGM from opening its new joint until 24 months after Caesars Entertainment opens the state’s fifth casino in Baltimore next summer, putting MGM on track for a July 2016 launch.

MGM CEO Jim Murren said his company’s new digs would be “the most beautiful, iconic and successful resort. I think outside of Las Vegas, this will be the most profitable commercial resort in the United States.” The state’s current profit leader is Maryland Live!, which captured 80% of the state’s total casino gaming revenue in November. Maryland is one of the few eastern states showing a year-on-year gaming revenue improvement, largely because it only opened its first legal casino in 2010 and only legalized table gaming in 2012. Compare that with Pennsylvania, which opened its first casino in 2006 yet is already showing signs that the market has peaked. Will Maryland’s momentum survive the addition of not one but two more mega-casinos?

The east coast casino saturation is believed to have contributed to Friday’s decision by Caesars to pay $15m to acquire and shutter the Atlantic Club Casino Hotel in Atlantic City, where Caesars operates four casinos. The Atlantic Club had filed for Chapter 11 bankruptcy protection in November after struggling to make a go of things in AC’s perpetually declining market.

Another AC casino, Revel, also endured bankruptcy proceedings in 2013, having cost $2.4b to build but never delivering the revenue goods over its 20-month existence. Rumors surfaced on Friday that Hard Rock International was in “advanced negotiations” to acquire Revel. The New York Post reported that the Orlando-based Hard Rock, which operates eight casinos in addition to hotels and restaurants across the globe, wasn’t the only suitor vying for Revel but was closest to making a deal. In Sept. 2012, Hard Rock scrapped plans to build its own facility in AC, citing “current market conditions.” If acquired, Revel would be rebranded under the Hard Rock moniker. Neither Hard Rock nor Revel offered official comment on the Post report.