MGM Resorts International
) recently sealed the joint venture deal with AEG, one of the
leading sports and entertainment presenters in the world, to set
up a sports arena in Las Vegas. The project is worth about $350
million. Per the deal, which was announced in Mar 2013, a
high-end 20,000-seat indoor sports and entertainment facility
will be set up at the popular Las Vegas Strip.
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Construction work for the arena, which will serve as a venue for
boxing matches and other sporting events, entertainment shows and
special events, will begin in summer 2014 with its opening slated
for spring 2016. The upcoming sports facility will be
located between New York-New York and Monte Carlo.
The project will also feature new retail shops, dining and
entertainment offerings, especially at the New York-New York and
Monte Carlo properties, which should boost guest occupancy at
both the resorts.
The latest deal, which is to be financed with equity
contributions from each of the partners as well as
privately-funded third-party financing, also marks a
diversification from MGM's age-old casino business. Given, its
dominant position in arena development and management, AEG also
makes a strategically fit partner.
We believe this new venture will further enhance the presence of
the MGM brand in the highly competitive Las Vegas Strip. MGM
presently boasts nine casino hotels in the Las Vegas Strip namely
Bellagio, MGM Grand, Mandalay Bay, The Mirage, Luxor, New
York-New York, Excalibur, Monte Carlo and Circus Circus. In fact,
MGM's entry to the world of boxing, sports, concerts and other
events will help the entire Las Vegas market garner considerable
footfall and revenues.
MGM Resorts currently retains a Zacks Rank #2 (Buy). Other
players in the casino gaming industry, which look attractive at
current levels include
Boyd Gaming Corp.
Monarch Casino & Resort Inc.
Las Vegas Sands Corp.
), all carrying a Zacks Rank #2.