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Home » A HISTORY OF MGM RESORTS AROUND THE WORLD

A HISTORY OF MGM RESORTS AROUND THE WORLD

    A HISTORY OF MGM RESORTS AROUND THE WORLD

    Timeline of MGM Resorts International’s (MGM) Development

    MGM Resorts International: A Brief Overview

    History and first efforts (1969–1988)
    It all began in 1969 when airline and casino magnate Kirk Kerkorian purchased a majority share in the MGM film studio. Kerkorian had to sell a big part of his casino company, International Leisure, to Hilton Hotels in 1970 and 1971 because he was getting more and more in debt from buying MGM and Western Airlines. Kerkorian decided to move the studio into the gambling business after the Las Vegas Hilton, a casino he built, became the most profitable hotel in Vegas. In 1973, it debuted the MGM Grand Hotel & Casino, today known as Bally’s Las Vegas. After it, in 1978, came the MGM Grand Reno.

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    MGM revealed plans to split in two in 1979 when revenue from its two hotel casinos amounted to more than half of the company’s total. The film studio was separated and renamed MGM Studios the following year, while MGM Grand Hotels, Inc. kept its two casinos. Kerkorian owned over half (47%) of the shares in each business.

    To free himself to operate United Artists and construct the new MGM Grand Hotels, Kerkorian started looking for a buyer in 1985. In April of 1986, a deal was finalized for Bally Manufacturing to acquire the firm, and the two casinos were rebranded as Bally’s. It was stated that the investors of MGM Grand Hotels would be offered shares in a new business that would hold the naming rights, and the transaction conditions permitted Kerkorian to maintain rights to the MGM Grand brand.

    In 1986, Grand Name Co. was established as a wholly owned subsidiary of Kerkorian’s Tracinda Corporation, which later changed its name to MGM Resorts International. The following year, it was rebranded as MGM Grand, Inc.

    MGM Grand Air, a luxury airline with routes between New York and Los Angeles, took off in September 1987 as the company’s maiden endeavor. In addition, in November 1987, the company’s plan to acquire the financially troubled Pan American World Airways was turned down by Pan Am’s board.

    Although MGM Grand offered $152 million for the defunct Dunes Hotel in Las Vegas in August 1987, Japanese tycoon Masao Nangaku ultimately won the bidding. Instead, in February 1988, the business paid $167 million to the Summa Corporation for the Desert Inn and Sands casinos. In April of 1989, Sheldon Adelson’s Interface Group paid $110 million to purchase The Sands from him.

    Initiation of Gambling Establishments (1989–1999)

    The business first unveiled its intentions for a $700 million Hollywood-themed complex in September 1989. It would have a 4,000-room hotel and a theme park. MGM Grand initially considered the Desert Inn site for the project but ultimately settled on the Marina Hotel and Casino and the Tropicana Country Club, which it purchased for $93 million plus $30 million in stock. To concentrate on the new endeavor, the business placed the Desert Inn for sale but received no serious offers. They eventually settled on selling it to Tracinda for $130 million. In October 1991, work started on what would become the MGM Grand Las Vegas and the MGM Grand Adventures theme park. The $1 billion resort opened to the public in December 1993. Due to a lack of visitors, the park closed for good in 2002.

    In July 1992, the company’s headquarters were relocated from Beverly Hills to Las Vegas.

    During its development, the business secured a purchase option on an 18-acre plot of land across the street from the MGM Grand. In 1994, Gary Primm of Primadonna Resorts proposed building a casino in the shape of the New York skyline to MGM president Bob Maxey. In March 1995, the two corporations created a joint venture, and building started. The New York-New York Hotel and Casino opened in January 1997 after a construction cost of $460 million was completed.

    While MGM Grand was constructing Other York-New York, it began planning to enter new markets. Two casinos were supposed to be built on the Chinese island of Hainan after an exploratory agreement was revealed in August 1994, but the deal ultimately never materialized. The business explored constructing a hotel in Darwin, Australia, a profitable market that attracts high rollers from Pacific Rim nations, but finally decided to purchase the existing Diamond Beach Hotel and Casino and rebrand it as the MGM Grand Darwin. In July 1996, MGM announced its intentions to build a casino in Atlantic City. Voters in Michigan authorized casinos in November 1996, and MGM prepared a bid on one of the state’s three gaming licenses; the casino was approved and opened in July 1999 as the MGM Grand Detroit.

    When casinos were finally legalized in South Africa in August 1996, MGM and Tsogo Sun announced plans to build 15 casinos around the country. The first one debuted in October 1998 at the Sundome in Johannesburg. After opening three additional casinos, MGM decided to sell all its stakes in the resorts to Tsogo Sun in November 2001.

    Analysts have thought that either MGM Grand or Primadonna will buy out the other’s share in New York-New York since the idea was first thought of. However, MGM decided against spending so much money and instead purchased Primadonna for $276 million in shares and $336 million in assumed debt. In addition, to complete control of New York-New York, MGM now owns three casinos and two golf courses on the Nevada–California border, thanks to the merger’s completion in March 1999.

    The merger of the Mirage Resorts (2000)

    MGM Grand made an unsolicited approach to acquire Mirage Resorts for $17 per share in February of 2000 after the latter’s stock price plummeted due to poor performance at its new Beau Rivage and Bellagio properties. Experts predicted a drawn-out conflict since Mirage founder Steve Wynn was not anticipated to cede power easily despite mounting pressure from Mirage’s institutional investors. After Mirage turned down the offer, Wynn met with Kerkorian the next day and settled on $21 per share. The increased price was accepted by both corporations, bringing the total to $4.4 billion (including $2 billion in assumed debt). In May of 2000, a merger was finalized, giving MGM complete control of the Mirage, Treasure Island, Bellagio, Boardwalk, and Golden Nugget casinos in Las Vegas, as well as the Golden Nugget in Laughlin, the Beau Rivage in Mississippi, and a 50% stake in the Monte Carlo. The company rebranded as MGM Mirage in August of 2000. Boyd Gaming oversaw a joint venture in which Mirage controlled half of an upcoming Atlantic City casino called the Borgata. Borgata construction continued, and the casino opened to the public in July 2003.

    Developments have stalled (2001–2004)

    After merging with Mirage in 2000, the business spent 2001 and 2002 investigating potential sites for their next big development project in Las Vegas, Atlantic City, Chicago, and Macau. A cutting-edge megaresort catering to millennials was planned for the Boardwalk casino’s 55-acre plot on the Las Vegas Strip. To compete with Wynn’s planned Le Jardin casino, MGM in Atlantic City has moved its attention from its previously stated boardwalk location to a projected $1 billion hotel and casino on a 55-acre plot next to the Borgata. For $600 million, MGM agreed to purchase the unfinished Emerald Casino in Rosemont, Illinois, whose investors had been suspected of having links to organized crime. However, state gaming officials rejected the proposal, and MGM ultimately abandoned its plans, citing Illinois’ high casino tax. Following the expiration of Stanley Ho’s 40-year government-granted monopoly on gambling in Macau, MGM, alongside Stanley Ho, Las Vegas Sands, and Wynn Resorts, competed for three open gaming concessions but was ultimately unsuccessful.

    After a government study in 2001 recommended a relaxation of gambling restrictions in the United Kingdom, MGM began making inroads into the sector. It has launched playmgmmirage.com, an online casino regulated in the British dependent of the Isle of Man, and sought a license to operate an online sports betting site in the United Kingdom. In 2003, it purchased a 25% share in the business responsible for building the Triangle Casino in Bristol, which first opened its doors to the public in February of that year. In London, it signed contracts for the Olympia Exhibition Centre, in Newcastle for St. James’s Park, in Sheffield for Meadowhall Shopping Centre, in Birmingham for the National Exhibition Centre, in Manchester for Sportcity, in Glasgow for the Harbour, in Liverpool for King’s Waterfront, and in Salford for a proposed stadium. The corporation has agreed to pay $490 million to buy Wembley plc, the owner of seven greyhound racetracks in the United Kingdom and four in the United States.

    Unfortunately, the ambitious British intentions for development were doomed to failure. After less than two years in operation, MGM shut down its online casino because of competition from more established British businesses and regulatory uncertainties in the United States. MGM was outbid by a consortium of investors that included Kerzner International for the Wembley deal. In 2006, the Triangle Casino was purchased by Stanley Leisure. Because the government decided to pull down and subsequently reject the idea of enabling massive “super-casinos,” the corporation had to scrap its other development plans.

    The business sold the MGM Grand Darwin to Skycity Entertainment for $140 million and the two Golden Nugget casinos (in Las Vegas and Laughlin, Nevada) to Poster Financial Group for $215 million in 2004.

    Union of Mandalay (2004–2005)

    In early 2004, MGM and Mandalay Resort Group began holding secret merger negotiations. If the deal goes through, MGM will own or manages more than half of the hotel rooms on the Las Vegas Strip. Mandalay’s low-end casinos, such as Excalibur and Circus Circus, were appealing to MGM because they would increase the company’s exposure to “high rollers,” the Mandalay Bay Convention Center would put MGM in direct competition with the Sands Expo Center in the convention market. There were at least two prime developable sites on the Strip. MGM made its $7.65 billion bid public in June when the negotiations became public knowledge. Mandalay did not accept the offer because of the provision permitting MGM to back out if antitrust authorities required property sales. Experts predicted that Harrah’s or Boyd would join the bidding process, but they didn’t, and MGM and Mandalay settled on a $7.9 billion agreement instead.

    Executives at MGM were certain that antitrust authorities would not demand the sale of any assets owned by the two businesses. One corporation was not allowed to possess more than one casino in Michigan. Therefore either the MGM Grand Detroit or Mandalay’s 54% ownership in the MotorCity Casino had to be sold. After much internal debate, Mandalay Entertainment finally decided to sell its stake in MotorCity to the casino’s second biggest stakeholder, Marian Ilitch, for $525 million. Meanwhile, a lack of quorum on the Illinois Gaming Board threatened to postpone the merger between MGM and Mandalay since MGM required regulatory clearance to acquire Mandalay’s 50% investment in the Grand Victoria Casino. MGM contemplated selling the casino to the Pritzker family, the other owner, but instead got permission for a proposal to put the facility under the management of a trustee until the licensing process was finalized. As expected, the FTC green-lit the transaction, and MGM secured a $7 billion credit line to cover the costs. Total proceeds from the transaction, which concluded on April 25 and April 25, 2005, were $7.9 billion ($3 billion of assumed debt).

    Even though MGM Mirage became the most prominent casino firm in the world with its Mandalay acquisition, it was eclipsed by Harrah’s Entertainment’s purchase of Caesars Entertainment. This transaction was prompted by the announcement of the MGM-Mandalay merger.

    Consequences that Arose Later (2004–2006)

    Although MGM had previously been unsuccessful in securing a gaming concession in Macau, the business maintained a keen interest in the region’s developing gambling industry. In 2003, it was rumored that Nevada gaming authorities might be open to a deal with Stanley Ho. However, the concept was ultimately nixed unofficially due to allegations that Stanley Ho’s casinos were used as fronts for organized crime triads. When the government authorized the three gaming concessionaires to sell out individual sub-concessions, a new avenue for expansion opened. As of June 2004, MGM partnered with Stanley’s daughter Pansy Ho to build a casino hotel using a sub-concession from Stanley. Despite Nevada Gaming Commission’s initial reservations, the deal was ultimately allowed. The MGM Grand Macau’s construction started in June 2005. It opened to the public in December 2007 after a $1.25 billion price tag was added for completion.

    In 2004, MGM finalized its plans for the Strip’s Boardwalk location, unveiling Project CityCenter, an $8 billion high-density project with hotels, condos, a casino, and a retail center. Construction on CityCenter started the following June after the Boardwalk was closed in January 2006 to make room for the reconstruction.

    As of 2004, Singapore was seen as the next big new Asian gambling market, prompting suggestions for two “integrated resort” casinos to be built at Marina Bay and on the island of Sentosa. The MGM and CapitaLand proposal for the Marina Bay property was expected to be $3 billion. Even though there were four proposals in the running, theirs was widely considered the strongest. However, the government granted Las Vegas Sands the license due to the company’s prominence in the meetings and conventions industry.

    MGM Mirage and Foxwoods Resort and Casino announced their cooperation to build an MGM Grand-branded casino on the premises on April 25 and April 25, 2006. MGM Mirage sold the Colorado Belle Hotel & Casino and the Edgewater Hotel & Casino in Laughlin to the partnership of Anthony Marnell III and Sher Gaming on October 16 and October 16, 2006. It was sold for $200 million. On June 1 June 1, 2007, the deal was finalized. MGM Mirage sold Primm Valley Resorts to Herbst Gaming for $400 million on October 31, 2006. The Primm Valley Golf Club is not included in the planned transaction. As of April 10 April 10, 2007, the deal was finalized.

    On March 20 March 20, 2007, one month earlier than expected, the Nevada Landing Hotel and Casino shut its doors for good

    Foreign Direct Investment in Dubai (2007–2009)

    The firm stated on April 19 that it would purchase two properties from Concord Wilshire Partners and Gordon Gaming. The first property was 7.6 acres (31,000 m2) and would cost $130 million. The second property was 25.8 acres (104,000 m2). Thanks to these two lots, the firm owns the southwest corner of the Sahara and Las Vegas Boulevard crossroads. After acquiring the unused portions of the Circus Circus site, the corporation will have a 68-acre (280,000 m) property for future development. The Maxim Casino was going to be built on the Concord site.

    Dubai World announced the acquisition of a 9.5% share in MGM for about $2.4 billion on August 22, 2007. As part of the deal, it would spend around $2.7 billion to purchase a 50% share in MGM’s CityCenter project. If the project launched on schedule and under budget, Dubai World agreed to pay MGM Mirage an extra $100 million. MGM Mirage has decided to sell the investment company 14.2 million shares. The company would issue a public tender for an additional 14.2 million shares at the same price.

    MGM Mirage stopped its $5 billion Atlantic City project on property close to the Borgata on October 29 and 29, 2008.

    At about the same time, New Jersey gambling authorities were looking into whether or not MGM Mirage would be a good fit to run casinos in the state, and they weren’t sure that MGM Mirage’s Macau partner, Pansy Ho, could act independently from influence from her father, Stanley Ho. The latter was often blamed for allowing members of Chinese organized crime to utilize the VIP areas of his casinos. MGM Mirage was forced to sell the highly successful Borgata because it could not meet New Jersey’s gambling rules, opting instead to focus on the much more lucrative Chinese market. Soon after, MGM Mirage divested its remaining 50% stake in the Borgata by selling it to a trust. Within 30 months, the trust had to sell MGM’s investment, albeit the studio may give the trustee instructions for the first 18 of those months.

    MGM Mirage sold the Treasure Island resort and casino in Las Vegas to billionaire Phil Ruffin on December 16, 2008. This transaction closed on March 20, 2009, for $600,000,000 in cash and a $175,000 promissory note.

    MGM Mirage’s annual report for 2008 stated, “there is substantial doubt about our ability to continue as a going concern.” The company “cannot assure that its business would generate sufficient cash flow from the operation,” prompting Dubai World and Infinity World to file a lawsuit in the Delaware Chancery Court on March 23, 2009, to be released from their CityCenter joint venture agreement with MGM Mirage.

    On April 6 April 6, 2009, it was reported that MGM Mirage had retained the services of Morgan Stanley, a leading financial firm, to help locate potential purchasers for the MGM Grand Detroit and the Beau Rivage.

    The difference in age and a new name (2010–present)

    To better reflect the brand’s worldwide reach and expand non-gaming activities, MGM Mirage changed its name to MGM Resorts International on June 15, 2010, with the approval of its shareholders.

    The MGM Macau resort announced its IPO in April 2011. MGM China Holdings Ltd was formed as a listing vehicle for the IPO, and as part of the arrangement, Pansy Ho would obtain a 29 percent share in the firm. Of the total, MGM Resorts would own 51%, and the general public would own 20%. The initial public offering (IPO) of MGM China on the Hong Kong Stock Exchange brought in $1.5 billion in the capital. MGM China was granted permission to construct a second resort in Macau in January 2013. MGM was approved in 2013 to build a $1 billion resort in Maryland’s National Harbor and a $950 million resort in Massachusetts’s capital city of Springfield. In May 2014, MGM and sports and entertainment business AEG started construction on a $375 million arena on the Las Vegas Strip.

    As of 2013, the MGM Grand at Foxwoods was known as the Fox Tower after a breakup between Foxwoods and MGM. In conjunction with AEG Live, construction on the $375 million T-Mobile Arena began on May 1, 2014. The arena will be built behind the New York Hotel & Casino. On April 6 April 6, 2016, the venue first welcomed fans. MGM bought the naming rights to Biloxi’s brand-new baseball stadium in September 2014, officially christening it MGM Park. That same year, the Massachusetts Gaming Commission granted a license for MGM Springfield, an $800-million project.

    The Railroad Pass Casino and Gold Strike were two of the several properties sold by MGM in 2015. Eldorado Resorts purchased MGM’s Reno holdings (Circus Circus Reno and a 50% share in the Silver Legacy) from MGM for $72.5 million.

    MGM announced an initial public offering (IPO) for MGM Growth Properties (MGP) in April 2016, a new real estate investment trust (REIT) that would own ten of the firm’s casinos; the parent company would continue to manage the casinos under a leasing arrangement. With the proceeds of the IPO, MGM Resorts now owns 76% of the REIT (to the tune of $1.05 billion). The nearby eating and entertainment zone, The Park, opened in April of 2016, prompting MGM to announce in June 2016 that it will be forming a joint venture with Sydell Group to rebuild and rename the Monte Carlo as the Park MGM. MGM paid $900 million to buy out Boyd Gaming’s stake in the Borgata in August 2016 before selling the casino to MGP for $1.2 billion and leasing it back at $100 million annually.

    MGM launched its online sportsbook in Nevada and online casino in New Jersey under the PlayMGM brand in 2017. MGM bought the WNBA’s San Antonio Stars in October 2017. Playing under Las Vegas Aces, the team relocated to the Mandalay Bay Events Center in 2018. A joint venture between MGM and Hyatt sold the Grand Victoria Casino to Eldorado Resorts in August 2018 for $328 million. MGM paid the Rooney family $850 million for Yonkers Raceway and Empire City Casino in New York in January 2019. Then it sold the land and buildings to MGP for $625 million, leasing them back to MGM at $50 million annually.

    It was in 2018 when MGM Resorts and the New York Jets agreed to a gaming collaboration.

    MGM has divested itself of two Las Vegas Strip properties this year: Bellagio and Circus Circus. They rid themselves of the Bellagio’s physical land to the Blackstone Group and sold the Circus Circus brand to Phil Ruffin. Blackstone and MGM growth properties formed a joint venture in 2020 to purchase the MGM Grand and Mandalay Bay from the company.

    After selling the real estate assets of Aria and Vdara to Blackstone in 2021 and buying the operational support of the Cosmopolitan of Las Vegas in 2022, the company then sold the Mirage to Hard Rock International in 2023.

    Pandemic preparedness for COVID-19

    Due to the COVID-19 outbreak, MGM laid off 18,000 workers in August 2020. Its pre-pandemic employment count was 68,000. Thus, the job losses amount to 25%.

    Conspiracies to halt the construction of casinos on native lands
    MGM tried to stop the Trump administration from letting two Native American tribes run a casino in East Windsor, Connecticut, by lobbying on their behalf. The casino was intended to compete with an MGM property in neighboring Massachusetts.

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