The latest rumor out of Vegas is that Mohegan Gaming is looking to to buy the Cosmopolitan Hotel and Casino.
It has been speculated for some time now that the Cosmopolitan Hotel and Casino is up for sale. What isn’t known is when it will be sold and to whom.
Blackstone Inc., which currently owns the hotel paid $1.7 billion for it five years ago and apparently invested about $500 million to upgrade it. If rumors are true then the sale price will be $4 billion, and Blackstone will almost double their investment. The increase in convention traffic in Las Vegas combined with a renewed interest in luxury hotels makes the investment in the 3,000 room hotel worthwhile. The decision to also cut way back on comped rooms, except to the ultra high rollers, also makes the investment more appealing, especially since the average room at the hotel rents for over $300 per night.
The original speculation was that MGM was the front runner to acquire the Cosmopolitan, since the hotel is situated between the Bellagio and City Center, but MGM’s well known cash flow issues make that unlikely. Wynn and Caesars have also been mentioned, but Wynn is dealing with legal troubles stemming from its founders sexual misconduct allegations, which led to his resignation as CEO and Caesars was just bought for $18 billion by Eldorado, who likely won’t have the funds or interest in acquiring a new hotel. There is no indication that the Las Vegas Sands is a player in this endeavor, as it seems Sheldon Adelson is devoting all his time and efforts nowadays into fighting online gambling and ensuring the latest DoJ opinion is ratified.
The latest rumor, provided to me by a viable source, is that Mohegan Gaming and Entertainment is prepared to buy the property. Mohegan Gaming is most known for the Mohegan Sun Casino built on native land in Connecticut and while it, along with the neighboring Foxwood Casino have been very successful in attracting customers, major mistakes made by the casinos around the time of the 2007 recession led to the company being heavily in debt. Not deterred, the Mohegan Tribe expanded its holdings by purchasing the casino at Pocono Downs, then bought the Resorts Casino in Atlantic City, plus they built two large resort casinos in Ridgefield Washington and Marksville Louisiana. The Mohegan Tribe is also expanding internationally preparing to break ground on a $5 billion resort casino built at the airport in Incheon South Korea, which will include its own air strip and just last week Mohegan Sun won the bid to be the new service provider for both the Fallsview Casino and Casino Niagara located in Niagara Falls, Ontario, Canada. By law the Ontario Lottery Corporation has to maintain ownership of the casinos.
So the news, if proven true, is surprising, but not unrealistic. Clearly the Mohegan Tribe views Las Vegas as the one major city missing from their portfolio and they likely feel that acquiring new properties is the best way to get out of debt and grow. The tribe clearly has deep pockets and savvy investors and Caesars and MGM continued to purchase new properties despite major debt loads for years. If the Mohegan Tribe does purchase the casino it will be the first Native American tribe to own and operate a casino in Las Vegas.