MGM Resorts International officially completed its acquisition of the operations of the Cosmopolitan of Las Vegas this week. The deal, worth $1.625 billion, was announced last year, but due to final negotiations and regulatory approvals, it has taken time to finalize.
Bill Hornbuckle, CEO and President of MGM Resorts, stated:
“We are tremendously excited about this significant milestone for our company and the Las Vegas Strip. The Cosmopolitan of Las Vegas, with its iconic brand, carefully curated experiences, and dedicated customer base, has already proven itself as a leading resort on the Strip. We are thrilled to incorporate them into our portfolio of top-tier operations.”
MGM Resorts has taken over the operations of The Cosmopolitan, although the property is not fully integrated into the MGM family yet. The Cosmopolitan will gradually be incorporated into MGM Resorts’ system, which currently operates several Las Vegas casinos.
- Vdara and Aria
- Bellagio
- Cosmopolitan
- Excalibur
- Luxor
- Delano and Mandalay Bay
- (and Signature) MGM Grand
- For Now, The Mirage
- New York to New York
- (And NoMad) Park MGM
The land under The Cosmopolitan is not owned by MGM Resorts. Instead, the company has a lease for 30 years to run the casino. The starting yearly rent for MGM Resorts is set at $200 million, with future increases anticipated.
Currently, The Cosmopolitan will continue to function as most guests remember. However, this will gradually change as MGM Resorts slowly incorporates the new property into its portfolio.
MGM Resorts representatives stated in meetings with the Nevada Gaming Control Board (NGCG) that some changes will be implemented quickly, while others may take up to a year.
The Cosmopolitan keeps its identity…for now
For the time being, Cosmopolitan will continue to utilize its Identity Rewards loyalty program. This is among the major changes and it will require some time before The Cosmopolitan fully transitions into an MGM Rewards property.
For now, MGM Rewards and Cosmopolitan’s Identity will continue to function separately. However, plans for fully merging the two rewards platforms are in the pipeline, although no specific timeframe has been set yet.
Currently, Identity Rewards cannot be utilized at MGM Resorts properties and the same applies in reverse. The process of earning rewards will remain unchanged as it was before the closure of the sale. There will be no alterations to the accumulation of points and comps for the time being.
Just as before the sale closing, one company or the other will send rewards and promotions to their customers.
MGM is permitting Identity members to align their tiers with MGM Rewards in anticipation of a change. This could be advantageous for Identity members interested in exploring MGM properties in Las Vegas and nationwide.
Get ready for a new BetMGM sportsbook
The Cosmopolitan sportsbook, currently operated by William Hill, will soon no longer be under their management.
MGM Resorts is in the process of assuming control over the operations of the Cosmopolitan sportsbook. The company intends to transform it into a BetMGM race and sportsbook.
MGM announced in regulatory meetings with the NGCB that it envisions The Cosmopolitan transforming into a BetMGM sportsbook within 90 days after the sale concludes.
Should that be the situation, a BetMGM sportsbook will establish its presence in The Cosmopolitan prior to August’s conclusion. To err on the side of caution, MGM Resorts has officially stated the transition will take place in the “second half of 2022”.
In time, The Cosmopolitan will transform into a casino where guests can register and fund a BetMGM Nevada sports betting app.
Expect minimal further alterations to gambling at The Cosmopolitan. The previous administration 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, The Cosmopolitan and MGM’s Las Vegas properties are not yet linked.
Guests staying at The Cosmopolitan are not granted access to MGM pools, fitness centers, and other amenities that are available to guests of MGM hotels.
Guests at MGM properties who are cosmopolitan do not get free parking regardless of their Identity Status. To get free parking, higher tier Identity members should align their tiers.
The Cosmopolitan has not yet been incorporated into MGM’s hotel network. Therefore, guests staying at The Cosmopolitan are unable to utilize the MGM app for check-in purposes. For now, all reservations for accommodations at The Cosmopolitan must be made directly with the hotel.
Both hotels will maintain their existing national hotel partners. The Cosmopolitan will remain a part of the Marriott Autograph Collection.
Marriott Bonvoy Points are still applicable at The Cosmopolitan but not at any MGM properties. Nonetheless, MGM Rewards hotels maintain their partnership with Hyatt Hotels.
The partnership of The Cosmopolitan hotel could undergo changes in the future once it is fully incorporated into the MGM Rewards system.
Slowly connecting properties
MGM Resorts categorizes some of its properties into clusters, or 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 earlier.
It seems that Bellagio will be linked to The Cosmopolitan sooner than other properties. According to MGM, majority of the food and beverage outlets at Aria, Bellagio, and The Cosmopolitan will soon permit cross-property charging.
Blackstone offers a nice parting gift
Blackstone retains ownership of 80% of the land under The Cosmopolitan, although it has no role in the property’s operations.
Blackstone expressed their gratitude to all Cosmopolitan employees with an unexpected $5,000 bonus prior to the sale closing. The announcement was made during an appreciation ceremony at The Chelsea.
Blackstone was supposed to give a bonus to only one person, but that didn’t happen. Instead, all employees were announced to receive a bonus, a revelation that was met with cheers from the 2,500 workers present.
The bonuses amount to roughly a $27 million outlay for Blackstone. This is not just a generous act, but also a minor expense in return for years of profit. The bonus represents a mere fraction of the $200 million annual rent that MGM will pay.
Changes to come for MGM
Over the coming year or so, The Cosmopolitan will undergo numerous changes. CEO Bill Hornbuckle, during a NGCB meeting, hinted at the possibility of replacing some restaurants and eventually refurbishing the rooms.
Neither move has a specific timeframe. However, the restaurant space that Estiatorio Milos previously occupied is currently unoccupied.
Changes will also be made to MGM’s portfolio of casinos in Las Vegas.
In the previous year, MGM consented to sell The Mirage operations to Hard Rock International. The transaction is projected to be finalized in the latter half of 2022.
Once the sale of The Mirage is finalized, MGM will run 42.9% of the casinos on the Vegas Strip. However, the company no longer holds ownership of the land beneath its casinos.
A few years ago, MGM adopted an “asset-light” strategy, which involves decreasing the number of assets it possesses. As part of this strategy, MGM sold off its land in Las Vegas, but maintains long-term leases enabling it to continue operating all of its casinos.
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