MGM Resorts International has formally concluded its acquisition of the operations of the Cosmopolitan of Las Vegas this week. The deal, worth $1.625 billion, was declared last year but took time to finalize due to final negotiations and regulatory approvals.
Bill Hornbuckle, MGM Resorts CEO and President, said:
“This is a significant milestone for our company and the Las Vegas Strip. The Cosmopolitan of Las Vegas has already carved out its place as a leading resort on the Strip, boasting a distinctive brand, meticulously chosen experiences and a devoted clientele. We are thrilled to include them in our collection of top-tier operations.”
MGM Resorts has taken over the operations of The Cosmopolitan, but the property has not yet fully become part of the company. The Cosmopolitan will gradually be integrated into MGM Resorts’ system, which currently operates the following casinos in Las Vegas:
- Aria (and Vdara)
- Bellagio
- Cosmopolitan
- Excalibur
- Luxor
- Mandalay Bay (and Delano)
- MGM Grand (and Signature)
- The Mirage (for now)
- New York-New York
- Park MGM (and NoMad)
The land under The Cosmopolitan is not owned by MGM Resorts. The company holds a 30-year lease to run the casino. The starting annual rent MGM Resorts will pay is $200 million, with future increases anticipated.
Currently, The Cosmopolitan will continue to operate as most guests recall. However, this will gradually change as MGM Resorts progressively incorporates the new property into its portfolio.
MGM Resorts representatives conveyed to the Nevada Gaming Control Board (NGCG) during meetings that some changes will be implemented quickly while others could take up to a year.
The Cosmopolitan keeps its identity…for now
The Cosmopolitan will continue to utilize its Identity Rewards loyalty program for the time being. This is one of the most significant changes and will require some time before The Cosmopolitan fully transitions into an MGM Rewards property.
For the time being, MGM Rewards and Cosmopolitan’s Identity will continue to operate independently. However, plans are in place to eventually integrate the two rewards platforms, though no specific timeline has been set for this integration.
Currently, Identity Rewards cannot be utilized at MGM Resorts properties and the reverse is also true. The process of earning rewards remains unchanged from how it was prior to the completion of the sale. There are no alterations to the methods of earning points and comps at this time.
Rewards and promotions will continue to be sent to customers from one company or the other, just as they were prior to the sale closing.
MGM is enabling Identity members to match tiers with its MGM Rewards in anticipation of a shift. This could be beneficial for Identity members interested in exploring MGM properties in Las Vegas and nationwide.
Get ready for a new BetMGM sportsbook
William Hill currently runs the Cosmopolitan sportsbook, but it won’t be operating it for much longer.
MGM Resorts is currently in the process of taking control of the Cosmopolitan sportsbook operations. Their intention is to transform it into a BetMGM race and sportsbook.
MGM has revealed its plans to transform The Cosmopolitan into a BetMGM sportsbook within 90 days after the sale closes, during regulatory meetings with the NGCB.
If so, The Cosmopolitan will have a BetMGM sportsbook by the end of August. To err on the side of caution, MGM Resorts officially states that this change will occur in the “second half of 2022”.
In due course, The Cosmopolitan will transform into a casino where guests can register and finance a BetMGM Nevada sports betting app.
Expect minimal further alterations to the gambling scene at The Cosmopolitan. The past management provided comparable blackjack, roulette and video poker games to those found in MGM’s Las Vegas casinos.
MGM Resorts and Cosmopolitan still mostly unlinked
Just like the rewards programs, MGM’s Las Vegas properties and The Cosmopolitan are still not connected.
Guests staying at The Cosmopolitan are not permitted to use any pools, fitness centers, or other amenities that are available to guests at MGM hotels.
Guests at MGM properties with a Cosmopolitan status do not have free parking, irrespective of their Identity Status. To access free parking, higher tier Identity members need to align their tiers.
The Cosmopolitan has not yet been incorporated into MGM’s hotel network. As a result, guests staying at The Cosmopolitan cannot use the MGM app for check-in purposes. For now, all bookings for The Cosmopolitan must be made directly with the hotel.
Both hotels will maintain their affiliation with the same national hotel partners. The Cosmopolitan remains a part of the Marriott Autograph Collection.
Marriott Bonvoy Points continue to be accepted at The Cosmopolitan, but are not applicable at any MGM properties. However, MGM Rewards hotels maintain their partnership with Hyatt Hotels.
The partnership of The Cosmopolitan hotel may alter in the future once it’s fully incorporated into the MGM Rewards system.
Slowly connecting properties
MGM Resorts organizes some of its properties into clusters, referred to as pods. The Cosmopolitan will be grouped in a pod with its southern neighbors, Aria and Vdara.
The systems of MGM and Cosmopolitan might not achieve full compatibility for up to a year. However, this pod is expected to be connected before that.
Bellagio seems likely to link with The Cosmopolitan before other properties. MGM indicates that many of the food and beverage facilities at Aria, Bellagio, and The Cosmopolitan will soon support cross-property charging.
Blackstone offers a nice parting gift
Blackstone still holds ownership of 80% of the land under The Cosmopolitan, yet the company has no involvement in the property’s operation.
Prior to finalizing the sale, Blackstone surprised all Cosmopolitan employees with a $5,000 bonus as a token of gratitude. The announcement was made during an appreciation ceremony held at The Chelsea.
Blackstone was originally intended to give a bonus to only one person, but that didn’t happen. The announcement that all employees would receive a bonus was met with cheers from the 2,500 staff members present, which should not be surprising.
The bonuses equate to roughly a $27 million expenditure for Blackstone. This is not just a generous move, but also a modest cost in exchange for years of profit. The bonus amounts to a mere fraction of the $200 million MGM will annually pay in rent.
Changes to come for MGM
Over the next year or so, The Cosmopolitan will experience numerous changes. CEO Bill Hornbuckle, during a meeting with the NGCB, hinted at the possibility of replacing a few restaurants and updating the rooms eventually.
Neither move has a specified timeframe. However, the restaurant space that Estiatorio Milos previously occupied is now empty.
Changes will also be made to MGM’s portfolio of Las Vegas casinos.
In the previous year, MGM consented to the sale of The Mirage’s operations to Hard Rock International. The sale is expected to conclude in the latter half of 2022.
Once the sale of The Mirage concludes, MGM will run 42.9% of the casinos on the Vegas Strip. However, the company no longer holds ownership of the land under its casinos.
A few years ago, MGM adopted an “asset-light” model, a strategy that involves decreasing its owned assets. As part of this approach, the company sold off its land in Las Vegas but secured long-term leases to continue operating all of its casinos.
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