The potential sale of Wynn Resorts’ nearly completed $2.6 billion Encore Boston Harbor project to MGM Resorts International ended late Tuesday when the two companies said in statements, they would go their separate ways.
News of a potential block-buster deal between the two Las Vegas-based gaming giants for the 671-room hotel-casino in Everett, which is scheduled to open next month, sent shockwaves through the gaming industry when the Boston Globe revealed the talks last Friday.
MGM Resorts said in statement it was committed to its $960 million MGM Springfield resort, which the company opened last August. Under Massachusetts gaming law, companies can only operate one casino in the state and MGM would have had to sell the Springfield property.
“We are committed to our Springfield community and proud of what we have accomplished including thousands of jobs and millions of dollars of revenue for small businesses in the area,” MGM said in a statement released by company spokeswoman Debra DeShong. “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.”
The company said it will “always explore ways to deepen our engagement in the Commonwealth. Our discussions regarding the Everett resort were in that spirit. We think the best course of action is to discontinue discussions concerning this opportunity.”
Wynn Resorts was fined $35 million by the Massachusetts Gaming Commission in April following a year-long investigation into the company’s failure to disclose years of allegations of sexual misconduct against company founder and CEO Steve Wynn. Wynn CEO Matt Maddox also was fined $500,000.
In a statement from company spokeswoman Deanna Pettit-Irestone, Wynn said its “world class assets attract the attention of others and our board takes seriously its fiduciary duty to review such interest.”
However, the company, “after careful consideration we have agreed to cease discussions with MGM Resorts. We remain committed to opening and operating Encore Boston Harbor as only Wynn Resorts is able to do.”
After news of the talkss leaked, Massachusetts leaders and lawmakers in the cities of Springfield and Everett said they would have final say on any transaction.
During Wynn’s first quarter earnings call earlier this month, Maddox said the company was “very confident that (Encore Boston Harbor) will be the nicest integrated resort on the east coast.”
Maddox said the opening of the resort, originally announced for June 23, might be delayed “a week or two to make sure the opening is flawless,” saying that the “regulatory complexity” has been a challenge.
“We’re ready to open, but we may give ourselves another week, or not,” he said. “We do not believe if we choose to appeal (the regulators’ conditions) it will impact our ability to open the project at the end of June.”
In its statement, MGM said, “We wish (Wynn) and the Everett community all the best and look forward to visiting their beautiful resort when it opens and welcoming the 5,600 employees to our industry.”
Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
