Boyd Gaming completed the sale of its half of Atlantic City's Borgata casino on Monday to MGM Resorts International. Nevada-based Boyd said it received $589 million from the transaction, after deducting its share of Borgata's currently outstanding debt. It will use the proceeds to pay down debt and for "general corporate purposes."
That amount does not include Boyd Gaming's 50 percent share of any future property tax settlement benefits. The Borgata, Atlantic City's top casino, estimates it is due property tax refunds totaling $160 million, including amounts due under court decisions rendered in its favor and estimates for open tax appeals.
The transaction includes the Borgata casino and hotel, and its non-gaming Water Club hotel tower next door in the city's Marina District.
"As the premier resort in Atlantic City, Borgata is a great addition to our growing presence in the mid-Atlantic and Northeast United States," said Jim Murren, chairman & CEO of MGM Resorts. "We are excited to welcome the talented Borgata leadership team and employees into MGM Resorts and look forward to serving guests with new and exciting opportunities."
Borgata customers will have their Borgata rewards accounts automatically changed over to MGM's rewards program in 2017; the exact switchover date has not yet been determined, MGM said.
MGM now owns all of the Borgata, which has dominated the Atlantic City market since shortly after it opened in 2003. The sale involved Boyd giving up its 50 percent ownership of Marina District Development Holding Co. LLC, Borgata's parent company.
The Las Vegas companies Boyd and MGM have been partners in the Borgata, which reported first-quarter net revenue of $812 million and $212 million in adjusted earnings. Boyd had been the hands-on operator.
MGM decided in 2010 to sell its stake and leave New Jersey rather than cut ties to an Asian business partner in Macau, but a buyer was never found. In 2014, declaring that conditions with its Macau business partnership had sufficiently changed, New Jersey casino regulators allowed MGM back into the Atlantic City market to reclaim its 50 percent share, which had been held in a trust while a buyer was sought.
Following the acquisition of Boyd's interest, MGM Growth Properties LLC will acquire the Borgata's real property from MGM Resorts and lease back the real property to a subsidiary of MGM Resorts. A subsidiary of MGM Resorts will then operate the Borgata.