he chief executives of casino giants Wynn Resorts and MGM Resorts are discussing a possible sale of Wynn’s nearly finished Encore Boston Harbor casino complex in Everett. Wynn Resorts CEO Matt Maddox and MGM CEO Jim Murren met in person in Las Vegas earlier in May to discuss a possible transaction, just weeks before the June 23 scheduled opening of the USD 2.6 billion Encore. The two companies confirmed the talks in a statement after each was reported by the Boston Globe.
The meeting also came days after the Massachusetts Gaming Commission concluded a 15-month investigation into how Wynn Resorts handled accusations of sexual misconduct by its founder and former chief executive, Steve Wynn. The firm was fined USD 35 million as a stipulation of receiving its gaming license.
“Over the past several weeks, we have engaged in conversations around the potential sale of Encore Boston Harbor,” Wynn Resorts and MGM said in the joint statement. “They are very preliminary and of the nature that publicly traded corporations like ours often engage in, and in fact when opportunities such as this are presented, we are required to explore. We cannot say today where these conversations will lead; however, we can reaffirm our commitment to the communities where we operate today.”
The potential transaction could bring about complications, given that MGM already owns a casino and hotel complex in Springfield, and Massachusetts law prohibits one company from holding two casino licenses. Both Wynn and MGM officials said their discussions will not affect jobs at the casinos, nor delay the opening of the Encore.
“Regardless of where this leads us, we will ensure that our commitments will be met, and that those who welcomed us into their communities will not be disappointed,” the two companies said.
MGM would have to relinquish its Western Massachusetts license and presumably sell MGM Springfield, a project that took years to build, cost about USD 960 million, but so far has fallen short of projections in gambling revenue. MGM executives have said soft revenues will improve as they build their marketing machine and get to know their customer base. Any license transfer would require the blessing of the gaming commission.
Furthermore, Boston Mayor Marty Walsh said he isn’t ready to criticize the state’s Gaming Commission for tossing other suitors aside in favor of Wynn. “It’s a difficult situation,” he told reporters Sunday. “They did a hearing, they hired outside people. They came back with a finding and they made a recommendation. I guess it’s easy to second guess them the next day, but I mean they had all of the facts in front of them.”
Officials in Springfield and Everett have raised concerns over the talks to potentially sell the Encore. “A sale would put at risk the benefits and amenities that Wynn Resorts will bring to the city — the 5,500 jobs on the line, taxes and revenues, and improvements for the community and in the Greater Boston area,” Everett City Councilor Mike McLaughlin told the Boston Herald Saturday.
Justin Hurst, president of the Springfield City Council, added that talks of a sale were “difficult and disheartening to hear considering it is somebody that’s been such a good partner over the last few years, has the potential to leave this city, especially one we felt so much optimism by their presence here.”
Mayor Domenic J. Sarno of Springfield said that MGM president Bill Hornbuckle reached out to him late on Thursday to notify him of the sales talks. “Bill reassured me of MGM’s commitment to Springfield and that if anything was to be entertained, and/or occurred, that myself and the Mass Gaming Commission would have a big and ultimate say in what might or might not happen,” Sarno said in a statement.
Everett Mayor Carlo DeMaria, who says he’s “not amused” by business talks surrounding the casino, which was initially scheduled to open up in his city on June 23, gave himself veto power over any potential sale in a section of the community host agreement, according to George Regan, who spoke on his behalf. “He’s not going to allow the city of Everett to be taken for granted,” Regan said.
Walsh pushed for Boston to have host community status for the casino in 2014. That request was denied by the Massachusetts Gaming Commission, prompting the city to sue the gambling regulators in 2015, arguing that nearby residents in the Charlestown neighborhood of Boston should have a vote on a host agreement. Despite the years-long saga surrounding the license however, Walsh says re-opening it to others who were initially interested, wouldn’t be “fair.”
“I don’t think you can do that,” he said. “In fairness, you have a $2 billion building built in Everett, I don’t think you can do that, that wouldn’t be fair to the people of Everett and I don’t think it would be fair to this region. I wouldn’t want to start the process all over again, absolutely not.”
The Gaming Commission did not directly address the sales talk, but said in a statement Friday that its April 30 decision stands, and has given Wynn a deadline of May 31 to pay its fine or send a notice of appeal.