This week, MGM Resorts International officially closed on its deal to purchase the operations of the Cosmopolitan of Las Vegas. The $1.625 billion deal was announced last year but it takes time for deals to finalize between final negotiations and regulatory approvals.
MGM Resorts CEO and President Bill Hornbuckle said:
“This is a big moment for our company and for the Las Vegas Strip. The Cosmopolitan of Las Vegas has already established itself as one of the Strip’s premier resorts with an iconic brand, well-curated experiences and a loyal customer base. We couldn’t be more excited to bring them into our portfolio of world-class operations”.
MGM Resorts now owns the operations of The Cosmopolitan but the property isn’t entirely part of the family yet. MGM Resorts will slowly integrate The Cosmopolitan into its system which now operates the following Las Vegas casinos:
- Aria (and Vdara)
- Mandalay Bay (and Delano)
- MGM Grand (and Signature)
- The Mirage (for now)
- New York-New York
- Park MGM (and NoMad)
MGM Resorts does not own the land beneath The Cosmopolitan. The company has a 30-year lease to operate the casino. MGM Resorts will pay an initial annual rent of $200 million with escalators in the future.
For the time being The Cosmopolitan will continue to operate as most guests remember. That will change in time as MGM Resorts slowly integrates the new property into its portfolio.
During meetings with the Nevada Gaming Control Board (NGCB) representatives for MGM Resorts said that some changes will happen quickly while others will take up to a year to implement.
The Cosmopolitan keeps its identity…for now
Cosmopolitan will still use its Identity Rewards loyalty program for now. This is one of the biggest changes and will take some time before The Cosmopolitan completely becomes an MGM Rewards property.
MGM Rewards and Cosmopolitan’s Identity will still operate individually for the time being. That will eventually change but there is no timeframe yet for fully integrating the two rewards platforms.
For now, Identity Rewards cannot be used at MGM Resorts properties and vice versa. Earning rewards will be the same as it was before the sale closed. There are no changes to earning points and comps for now.
Rewards and promotions will be sent from one company or the other to their customers just as they did before the sale closing.
In preparation for a change, MGM is allowing Identity members to match tiers with its MGM Rewards. This could prove useful for Identity members curious about visiting MGM properties in Las Vegas and around the country.
Get ready for a new BetMGM sportsbook
William Hill currently operates the Cosmopolitan sportsbook. This won’t be a William Hill sportsbook for much longer.
MGM Resorts is already working on taking over operations of the Cosmopolitan sportsbook. The company plans to make this a BetMGM race and sportsbook.
During regulatory meetings with the NGCB, MGM said it plans for The Cosmopolitan to become a BetMGM sportsbook within 90 days of the sale closing.
If that’s the case, The Cosmopolitan will be home to a BetMGM sportsbook before the end of August. MGM Resorts is officially saying the change will happen in the “second half of 2022” to be safe.
Eventually, The Cosmopolitan will become a casino where visitors can sign up and fund a BetMGM Nevada sports betting app.
Don’t expect to see many more changes to the gambling at The Cosmopolitan. The previous regime offered similar blackjack, roulette and video poker games as MGM has in its Las Vegas casinos.
MGM Resorts and Cosmopolitan still mostly unlinked
Much like the rewards programs, MGM’s Las Vegas properties and The Cosmopolitan are not linked yet.
Guests at The Cosmopolitan do not have access to any MGM pools, fitness centers and other amenities available to MGM hotel guests.
Cosmopolitan guests at MGM properties do not receive complimentary parking regardless of their Identity Status. Higher tier Identity members should match tiers to gain complimentary parking.
The Cosmopolitan is not yet part of MGM’s hotel system. Guests at The Cosmopolitan will not be able to use the MGM app to check into the hotel. All Cosmopolitan hotel accommodations can only be made with the property for the time being.
Both hotels will continue to have the same national hotel partners. The Cosmpolitan is still part of the Marriott Autograph Collection.
While Marriott Bonvoy Points can still be used at The Cosmopolitan, they cannot be used at any MGM properties. MGM Rewards hotels are still partners with Hyatt Hotels.
The Cosmopolitan hotel partnership could change in the future when it’s completely integrated into the MGM Rewards system.
Slowly connecting properties
MGM Resorts groups some of its properties into pods. The Cosmopolitan will be in a pod with neighbors to the south, Aria and Vdara.
The MGM and Cosmopolitan systems may not be fully compatible for as long as a year. However, this pod should be connected sooner.
It appears as though Bellagio will be connected to The Cosmopolitan sooner than some other properties. MGM says that most of the food and beverage outlets at Aria, Bellagio and The Cosmopolitan will allow cross-property charging soon.
Blackstone offers a nice parting gift
Blackstone still owns 80% of the land underneath The Cosmopolitan. However, the company is completely removed from operating the property.
Before the sale closing, Blackstone thanked all Cosmopolitan employees with a surprise $5,000 bonus. The announcement came at an appreciation ceremony at The Chelsea.
Only one person was supposed to receive a bonus from Blackstone. That wasn’t the case. It should be no surprise that the 2,500 employees in the venue cheered at the announcement that all employees will receive a bonus.
The bonuses work out to be approximately a $27 million expense for Blackstone. This is not only a nice gesture but it’s a small price to pay for years of profit. The bonus works out to be just a small percentage of the $200 million MGM will pay in rent per year.
Changes to come for MGM
There will be plenty of changes at The Cosmopolitan over the next year or so. During an NGCB meeting, CEO Bill Hornbuckle mentioned possibly swapping out a couple of restaurants and eventually updating the rooms.
There’s no specific timeframe for either move. However, the restaurant space formerly used for Estiatorio Milos is currently vacant.
There will also be changes to MGM’s Las Vegas casino portfolio.
Last year, MGM agreed to sell operations of The Mirage to Hard Rock International. The sale should close during the second half of 2022.
When The Mirage sale is completed, MGM will operate 42.9% of the casinos on the Vegas Strip. However, the company no longer owns any of the lands under its casinos.
MGM switched to an “asset-light” model a couple of years ago. This strategy means reducing the assets it owns. In this case, MGM has divested its land in Las Vegas. The company has long-term leases to still operate all of the casinos.