MGM Reveals Plan for Massachusetts - Analyst Blog
16 Janeiro 2012 - 9:15AM
Zacks
MGM Resorts
International (MGM) recently inked a contract with Rolling
Hills Estates Realty Trust to purchase a remote 150 acres of land
in Brimfield, near the Massachusetts Turnpike. The Las Vegas,
Nevada-based company plans to set up a world-class property in the
name of Rolling Hills Resort on that site.
Management commented that the
remote nature of the location along with its proximity to the Mass
Pike is in sync to the upcoming property’s psyche. Management was
in search of rural setting in accordance with the taste of New
Englanders.
The Massachusetts government
recently gave its nod to the construction of three casinos in the
region. Interested developers like MGM will have to compete for a
highly anticipated bidding process to get a license to run one. If
the upcoming project materializes, we belive it will offer
significant opportunities for growth, as the area is under-served
to meet its demand. The development is expected to create 3,000
permanent jobs along with several thousand construction-related
jobs.
MGM Resorts owns and operates 15
properties located in Nevada, Mississippi and Michigan, and had 50%
investments in three other properties in Nevada and Illinois, as of
November 3, 2011. We believe in order to grow its brand beyond the
highly competitive existing market places, the company is targeting
other locations. MGM recently signed a deal with Creative Casinos
for a minority equity interest, which will provide exposure to the
Southwest Louisiana and Texas markets.
While MGM Resorts managed to
acquire a land in Massachusetts, its close competitor Wynn
Resorts Ltd. (WYNN) is reportedly struggling for a plot. A
proposal to build a Wynn Resorts casino adjacent to Gillette
Stadium in Foxborough, Massachusetts, is in uncertainty as the
town's residents are against a casino. However, the hope is still
not ruined.
MGM management is in talks with the
residents of Brimfield and is open to their suggestions. Management
also opened an office at Brimfield to ensure a smooth and
politically hassle-free development process. MGM Resort currently
retains a Zacks #3 Rank, which translates into a short-term Hold
rating. We are maintaining our Neutral recommendation on the stock
over the long term.
MGM RESORTS INT (MGM): Free Stock Analysis Report
WYNN RESRTS LTD (WYNN): Free Stock Analysis Report
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