weather icon Clear

Wynn, MGM in talks about possible Encore Boston Harbor sale

Updated May 17, 2019 - 5:06 pm

Wynn Resorts Ltd. and MGM Resorts International have had talks about Wynn selling its yet-to-open $2.6 billion Encore Boston Harbor to MGM.

The companies issued a joint statement Friday affirming the conversations, hinting they could be ongoing, but not saying what, if anything, would happen next.

The statement also didn’t address a prospective price of the transaction or how MGM would pay for any deal. MGM is in the midst of a cost and expense reduction strategy it calls MGM 2020 to improve cash flow by $300 million a year by 2021, resulting in the layoff of dozens of employees.

The company also announced Thursday that it anticipates “possibly” spending up to $800 million by next May in the settlement of lawsuits from the Oct. 1, 2017, shooting at Mandalay Bay that killed 58 people.

Any deal would be fraught with regulatory roadblocks, the biggest of which could be Massachusetts’ rule prohibiting one company from owning more than one casino in the state.

MGM opened MGM Springfield in the western part of Massachusetts in August.

Wynn has weathered its own struggles, being fined a record $35 million by the Massachusetts Gaming Commission in April for the company’s failure to act on accusations of sexual harassment by its former chairman and CEO, Steve Wynn, and for failing to disclose a settlement in one case. Steve Wynn has denied all accusations that he harassed anyone.

Wynn Resorts, which was allowed to keep the license it first won in 2013, has until May 30 to decide if it will pay the fine or appeal the commission’s sanctions in court.

Opening unaffected

The joint statement from Wynn and MGM acknowledging talks says the conversations won’t affect the planned opening of the property in Everett, Massachusetts, in June.

“Over the past several weeks, we have engaged in conversations around the potential sale of Encore Boston Harbor,” the statement says. “They are very preliminary and of the nature that publicly traded corporations like ours often engage in, and in fact when opportunities such as this are presented, we are required to explore. We cannot say today where these conversations will lead, however we can reaffirm our commitment to the communities where we operate today.”

The statement said the people of Springfield and Everett welcomed them into their neighborhoods and that both companies take seriously the responsibility of their privileged licenses.

“Our conversations will not impact the jobs at our facilities and will not impact the opening of Encore Boston Harbor,” the statement said. “Regardless of where this leads us, we will ensure that our commitments will be met, and that those who welcomed us into their communities will not be disappointed.”

Some analysts speculated in March 2018, after Steve Wynn divested his holdings in the company and the company’s stock price plummeted, that MGM could be a prospective suitor for the property.

Matt Maddox, then the newly appointed CEO for the company in April 2018, put those reports to rest by saying Wynn had no intention of selling the 671-room resort to MGM or anyone else. Maddox was among the Wynn executives that scouted a location for the Massachusetts property and entered the agreement with Everett in 2014.

The Massachusetts law that prohibits multiple property ownership isn’t that uncommon, according to UNLV law professor Anthony Cabot, who explained that it’s a regulation designed to prevent market monopolization and to promote competition.

In Massachusetts, the state is allowing only three casino resorts and one slot machine parlor. In addition to the properties in Springfield and Everett, one more license for a resort may be issued in the southeastern part of the state. The slot parlor in Plainridge Park is operated by Penn National Gaming, operators of the Tropicana and M Resort in Las Vegas.

Other complications

While the Massachusetts Gaming Commission would have to approve any transfer of gaming licenses, a swap in property ownership could have other complications.

Both Wynn and MGM have signed agreements with their host communities, Everett and Springfield. It’s unclear if those cities would object to new ownership for their respective casino properties.

MGM, which stands to capitalize on the growth in sports wagering if and when Massachusetts legalizes it, bolstered its presence in the Boston area in March when it signed a multiyear gaming partnership deal with the Boston Red Sox Major League Baseball team.

MGM’s logo now appears prominently on the “Green Monster,” the left-field wall at Fenway Park, less than seven miles away from Encore Boston Harbor.

The stock prices of both Wynn and MGM took hits in Friday trading.

MGM closed down 64 cents, 2.4 percent, then fell another 56 cents, 2.2 percent, to end at $25.33 a share on volume slightly above the daily average.

Wynn plunged $5.89, 4.6 percent, then gained back 3 cents, less than 1 percent, after hours, ending at $131.42 a share, also on volume slightly above normal daily averages.

Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.

Don't miss the big stories. Like us on Facebook.
Business Videos
Daytime fireworks mark the opening of Encore Boston Harbor
The opening of the $2.6 billion Encore Boston Harbor in Everett, Mass. included a three-minute fireworks show launched by Fireworks by Grucci Sunday, June 23, 2019. (Rick Velotta/Las Vegas Review-Journal) @RickVelotta
Elaine Wynn talks about the opening of Encore Boston Harbor
Elaine Wynn, co-founder and largest shareholder of Wynn Resorts, talked during opening festivities of the $2.6 billion Encore Boston Harbor in Everett, Mass. Sunday, June 23, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
People line hours ahead of opening for Encore Boston Harbor
Guests arrive as much as 17 hours early for the 10 a.m. opening of the $2.6 billion, 671-room resort in Everett, Mass. Sunday, June 23, 2019. (K.M. Cannon/Las Vegas Review-Journal) @reviewjournal.com
Crews working 24/7 to complete Circa downtown - VIDEO
Owner Derek Stevens goal is to open the doors to the 1.25 million-square-foot project by December 2020. (Michael Quine/Las Vegas Review-Journal)
Golden Knights Marc-Andre Fleury sells Las Vegas home - VIDEO
Golden Knights goaltender Marc-Andre Fleury has sold his custom home Southern Highlands home in Las Vegas for $2.3 million.
Las Vegas Strip resorts slow to welcome Alexa, Google Home Hub
Alexa, where are you? Smart home and hospitality technology was big at CES in early January. Amazon and Google promoted their voice-activated speakers Alexa and Google Home Hub. Hospitality executives have called the speakers the industry’s future. Yet for all the hype, the revolution is unfolding at a cautious pace on the Strip as well as in other major U.S. hospitality markets. Hotels are focusing their consumer-facing technology investments on adding streaming capabilities, like Netflix, and enhancing their mobile apps, a December report by Hospitality Technology showed. Voice-enabled technology is 10th on that priority list.
What is MGM 2020
MGM Resorts International announced its MGM 2020 plan in January, The plan would improve cash flow by $200 million annually by the end of 2020 and an additional $100 million by the end of 2021. 1,070 jobs were cut as part of the cost-cutting initiative. 881 of those were Las Vegas employees, mostly in management or mid-management positions. Jim Murren
What is MGM 2020
MGM Resorts International announced its MGM 2020 plan in January, The plan would improve cash flow by $200 million annually by the end of 2020 and an additional $100 million by the end of 2021. 1,070 jobs were cut as part of the cost-cutting initiative. 881 of those were Las Vegas employees, mostly in management or mid-management positions. Jim Murren
Find next-level experience
One minute, you’re just trimming hedges and shooting the breeze with your neighbor. But then he brings up Vegas and you’re thinking about the incredible meals, world-class hotels, pools inside of pools and unparalleled entertainment. You’re thinking about iconic artist residencies like Aerosmith. Priorities take shape. Vegas first, lawn and everything else, second. Just like that, Vegas Changes Everything. (Visti Las Vegas/Youtube)
Vegas Changes Everything
A weekend getaway is nice for anyone, but a weekend getaway in Vegas ... that’s a next-level experience with shows, clubs, spas and more. With a chance to see iconic artist residencies like Gwen Stefani, you might just find yourself going from pushing your child on a swing, to pushing back a birthday party. See how Vegas Changes Everything. (Visit Las Vegas/YouTube)
How much do Las Vegas casino CEOs make?
Las Vegas gaming CEOs made anywhere between $1 million and $24 million last year, according to company filings with the U.S. Securities and Exchange Commission. ((Las Vegas Review-Journal)
30-year-old Rio needs a little TLC
Nearly 30 years after the Rio opened, the red and blue jewel that helped catapult Las Vegas to a new level with its buffet and nightclub has lost its status along with its shine.
The latest on the Drew Las Vegas - VIDEO
Eli Segall recounts his tour of the Drew Las Vegas, formerly the Fontainebleau, on the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
Pinball Hall of Fame to move near south Strip
Operators of the Pinball Hall of Fame have been approved to build a new, larger arcade near the south edge of the Strip on Las Vegas Boulevard near Russel Road. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
National Hardware Show underway Las Vegas
The National Hardware Show kicked off Tuesday at the Las Vegas Convention Center (Mat Luschek / Review-Journal)
Caesars for sale?
Caesars Entertainment Corp. has been swept up in takeover speculation since the company’s share price tumbled last year amid disappointing earnings and concerns over a recession. Amid the decline, hedge funds scooped up shares. Billionaire activist investor Carl Icahn began buying shares of Caesars as early as January. Icahn acquired nearly 18 percent by mid-March. In February Icahn called on the Caesars board to study a sale as a way to boost shareholder value.
Las Vegas home prices
Las Vegas home prices grew fastest among major markets in February for the ninth straight month. But amid affordability concerns, the growth rate has slowed down. Southern Nevada prices in February were up 9.7% from a year earlier, according to the latest S&P CoreLogic Case-Shiller index. The last time Las Vegas' price growth fell below 10% was in September 2017, S&P Dow Jones Indices reported.
Free Parking Coming To Wynn
Free parking will come to the Wynn and Encore resorts on May 1, 2019. (Mat Luschek / Review-Journal)
Founding Venetian employees talk about 20 years at the Strip resort
The Venetian, which opened May 3, 1999, is celebrating 20 years on the Las Vegas Strip. Seven original employees talk about opening the luxury resort and working there for two decades. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Circa aiming for December 2020 opening
The 1.25-million-square-foot property will have 44-stories and 777-rooms. It will also have a separate nine-story, 1,201-space parking garage.
Boxabl official explains the building concept
Boxabl business development manager Galiano Tiramani shows off a room built by his company. (Blake Apgar/Las Vegas Review-Journal)
TI/Mirage Tram reopens
The tram that shuttles guests between TI and Mirage reopened this week after being closed for much of 2018.
Las Vegas Convention Center expansion taking shape
Renderings and actual footage show how the Las Vegas Convention Center is evolving.
Former Starbucks CEO Howard Schultz at Las Vegas convention
Former Starbucks CEO and potential presidential candidate Howard Schultz spoke at the Epicor Insights user conference at Mandalay Bay Convention Center Wednesday, April 17, 2019. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Drew Las Vegas to open in the second quarter of 2022
The 67-story Drew Las Vegas is slated to open in the second quarter of 2022 at the north end of the Las Vegas Strip. (Michael Quine/Las Vegas Review-Journal)
NAB Day 1 (Time Lapse)
NAB kicked off at the Las Vegas Convention Center on Monday, April 8, 2019. (Mat Luschek / Review-Journal)
National Association of Broadcasters Show shows 1mm thick 8K TV with 22.2 channel digital sound
Japan’s NHK Science & Technology Research Laboratories booth featured a 1mm thick 8K TV system used in conjunction with a 22.2 channel digital sound system at the National Association of Broadcasters Show at the Las Vegas Convention Center. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto
Nevada shoppers react to Smith’s no longer accepting Visa credit cards
On March 1, Smith’s announced that it would no longer be accepting Visa credit cards at any of its 142 supermarkets, including the 45 in Nevada.
Massachusetts Gaming Commission asks how long Wynn executives knew about misconduct
Business reporter Rick Velotta gives an update on the adjudicatory hearing on the suitability of Wynn Resorts to retain its gaming license in Massachusetts.
Henderson app developer part of Startup in Residence
Henderson based developers of the app On Point Barricade are taking part in Startup in Residence, a North America program dedicated to pairing tech companies with governments. (K.M. Cannon/Las Vegas Review-Journal) @KMCannonPhoto