Late Tuesday, MGM announced that it was no longer pursuing talks with Wynn over a possible sale of the latter’s $2.6b Encore Boston Harbor casino, which is scheduled to open to the public on June 23.
MGM said it had “noted the anxiety raised by various stakeholders” after news of the potential blockbuster deal emerged late last week. As a result, MGM said it had concluded that “the best course of action is to discontinue discussions concerning this opportunity.”
Last week’s announcement was greeted with bewilderment by gaming analysts, who questioned by Wynn would be willing to walk away from its largest US project outside Nevada so close to the finish line.
There was also the small matter of Massachusetts gaming laws prohibiting any company from holding more than one casino license in the state. That meant any Encore deal would require MGM to shed its MGM Springfield casino, which opened in the state’s southwest corner last September.
Moreover, any Encore deal would also have required each operator to renegotiate terms with their host communities, and neither of the local mayors appeared keen on the deal. Earlier Tuesday, Everett Mayor Carlo DeMaria told local media that his city was “not going to allow another resort to buy [Encore].” Springfield Mayor Domenic Sarno brushed off the sale talks as ‘mere conjecture.’
MGM’s Tuesday statement defended the talks with Wynn, saying the company “will always explore ways to deepen our engagement” with Massachusetts, but said MGM “only wish to have a positive impact on communities in which we operate” and was “committed to our Springfield community.”
Wynn’s brief statement said “world class assets” like Encore “attract the attention of others” and its board was only doing its duty in entertaining MGM’s overtures. But “after careful consideration, we have agreed to cease discussions” and the company was “committed to opening and operating Encore Boston Harbor as only Wynn Resorts is able to do.”
The Massachusetts Gaming Commission (MGC) recently concluded a probe into Wynn senior management’s role in covering up numerous sexual harassment allegations against the company’s founder and former CEO Steve Wynn. The MGC fined the company $35m and personally fined new CEO Matt Maddox an additional $500k but allowed the company to keep its gaming license.