MGM, Wynn Agree to Back Down from Talks Regarding Encore Boston Harbor
Posted on: May 21, 2019, 10:26h.
Last updated on: May 21, 2019, 10:26h.
MGM Resorts will not end up buying Wynn Resort’s soon-to-open Encore Boston Harbor after all.
Both companies announced the decision Tuesday night, less than a week after they jointly announced the start of discussions regarding the $2.6 billion casino resort in Everett, Mass.
The fleeting negotiations had a couple strikes going against them.
For starters, Everett Mayor Carlo DeMaria told WBUR-FM that he’d use his authority to block a sale. The city was granted that power when Wynn struck a host agreement with the town just north of Boston.
We’re not going to budge, we’re not going to allow another resort to buy this facility,” DeMaria said Tuesday. “Especially if they’re not a five-star resort like Wynn is, a company that can really draw an international clientele, really create the destination resort feel.”
Secondly, and perhaps most crucial, Massachusetts law stipulates a gaming company cannot hold more than one license in the state.
MGM already runs the state’s other casino in Springfield, in western part of the state. MGM Springfield opened in late August last year, but reports indicate it will miss projected revenues by about $150 million.
MGM’s resort also could face competition from Connecticut’s tribal communities, which are considering developing a satellite casino roughly 15 miles away near the states’ border.
MGM Committed to Springfield
In a statement to Casino.org, MGM officials said the company remains committed to Springfield.
“We will always explore ways to deepen our engagement in the Commonwealth. Our discussions regarding the Everett resort were in that spirit,” the company’s statement said. “We have noted the anxiety raised by various stakeholders regarding a transaction and this troubles us at MGM. 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.”
Next Steps for Wynn?
Encore Boston Harbor is scheduled for a June 23 opening, but Matt Maddox, Wynn’s CEO and president, told analysts a couple of weeks ago that date might get pushed back a week or so to ensure the grand opening is flawless.
The development has been beset by delays and controversies since Wynn won the license in November 2014. Numerous lawsuits by neighboring cities and even other gaming companies have caused delays as construction didn’t start predominantly until August 2016.
Then came a state investigation after the company failed to reveal during the bidding process for the gaming license that it knew about sexual misconduct claims against Steve Wynn, the company’s founder. That led to the Massachusetts Gaming Commission to levy a $35.5 million fine against the company, which may decide to appeal the decision.
Despite all the controversy, Wynn Resorts said in a statement to Casino.org that it looks forward to opening Encore Boston Harbor. However, it also said it had a responsibility to talk with MGM when it showed an interest in the property.
“Wynn Resorts prides itself on the design, development and operation of the world’s best integrated resorts,” the statement read. “At times, world class assets attract the attention of others and our board takes seriously its fiduciary duty to review such interest. After careful consideration we have agreed to cease discussions with MGM Resorts.”
When it opens, the resort will employ more than 5,500 workers. The 27-story tower will hold 671 hotel rooms, with a 210,000-square-foot casino featuring 242 table games and more than 3,100 slot machines.
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