Last week, news emerged that MGM Resorts International had entered talks with Wynn Resorts over the possible acquisition of the $2.6 billion Encore Boston Harbor. Latest news reveals that MGM has opted to break off the talks to buy the Greater Boston casino property citing a number of concerns that were voiced by the casino operator’s stakeholders.
Confirming this in Tuesday statement, MGM’s officials pointed out that they have noticed the “anxiety raised by various stakeholders regarding a transaction and this troubles us at MGM”.
Wynn’s Troubles
When MGM Resorts International and Wynn Resort announced that they were in talks last Friday, the news was met with a lot of speculation. Some analysts pointed out that the sanctions that leveled against Wynn Resorts following a year-long investigation had led the company’s executives to consider the sale of the Encore Boston Harbor property even before it is opened.
Last month, Wynn Resorts was slapped with a $35 million fine by the Massachusetts Gaming Commission for failing to act on a number of sexual harassment accusations that were leveled against Steve Wynn, the casino operator’s founder, and former boss. Matt Maddox, the company’s current chief executive was also fined $500,000 with the gaming commission going further to select a monitor that would be tasked with overseeing the Encore Boston Harbor’s operations for three years – this would also be at the expense of the company.
All these considered, MGM’s plans to pursue the Greater Boston area casino fell apart with the company shifting its stand and saying the best course of action going forward was to stop the discussions.
“We only wish to have a positive impact on communities in which we operate. We think the best course of action is to discontinue discussions concerning this opportunity. We wish the company and the Everett community all the best and look forward to visiting their beautiful resort when it opens and welcoming the 5,600 employees to our industry,” MGM’s statement read.
Everett Mayor Carlo DeMaria was one of the strongest opposers of the potential sale of Encore Boston Harbor since he had apparently not been consulted. The sale of the property, as it turns out, would not be able to take place without the mayor’s written authorization under the terms of a 2013 host community agreement that was signed by Wynn Resorts and the city.
What Now?
Well, following the news that the sale of the casino was no longer an option, Wynn Resorts clarified that the company had ceased discussions with MGM Resorts after careful consideration. Moreover, the company confirmed that it does remain committed to opening and operating the Greater Boston Casino as it is the only operator that is “able to do so”.
MGM, on the other hand, will now be refocusing its efforts towards its MGM Springfield operation whose performance has not been as great as initially anticipated. Some of the things that are currently being considered include the implementation of better marketing strategies that will help them gain and retain their clientele.
