NORTHFIELD, Ohio — MGM Resorts International is reportedly exploring the sale of its gambling operations at Northfield Park, according to a report from Bloomberg. The report said talks are only preliminary and may not result in any action.
The Northfield Harness Racing Track opened as the Hard Rock Rocksino with much fanfare in December 2013. It is one of seven horse tracks in Ohio that was awarded a slots-only license as part of a compromise between the Kasich administration and the state's four casinos.
The Hard Rock was a $268 million destination drawing gamblers from Cleveland and Akron for a Vegas-like experience.
"We could have done just the slots in the box, as the saying goes, that's not what the brand Hard Rock's about," said Hard Rock International Chairman Jim Allen at the time. "If you look at our success, it really is about trying to create a destination."
It established itself as the gambling leader not just among the state's slots-only racinos but consistently bringing in more revenue than the state's four full-fledged casinos. These numbers caught the eye of MGM in 2019 and prompted them to pay just over a billion dollars for the property.
In the five years since, it has remained the state's earnings leader, bringing in $296.8 million in revenue last year after all bets were paid. It's on a pace to be the first gambling site in the state ever to top the $300 million mark later this year.
Ryan Butler, a casino analyst with Covers.com, said it is not surprising that MGM might be looking to move on from Ohio if the situation is right.
"From MGM it's not that that it's not making money, it's is it making enough money to justify it," said Butler. "This kind of follows a pattern for MGM. They've been kind of divesting themselves from some of their regional properties and focusing on more of the big Las Vegas type properties. They did this in Mississippi a couple of years ago where they divested one of their properties and it's not shocking that they might be looking to do this here."
Since gambling came to Ohio in 2012, the traditional model of companies owning and operating their facilities has changed. REITs, or Real Estate Investment Trusts, have made it more profitable for them to break into two companies, a real estate one that owns the land and the buildings and another that operates the casinos. When Caesars emerged from bankruptcy in 2017, it was the first to do this with the new company, Vici, which handled real estate. MGM did the same, with MGM Growth Properties handling its real estate.
But two years ago, MGM Growth Properties was acquired by Vici, who also owns the two JACK properties in Cleveland and North Randall and leases them back to JACK Entertainment.
"MGM, because they don't own it anymore, technically it might make it a little easier to move on," said Butler. "Can that $60 million plus annual rent, can that be better used maybe somewhere else, so that's probably what they're looking at now."
MGM, for its part, told News 5 in a statement, "We have a longstanding policy of not commenting on rumors or speculation."
The Ohio Lottery tracks how much the state's seven racinos bring in per video lottery terminal (VLT) daily. MGM Northfield is the only one that averages more than $500 a machine, so should they decide to move on?
"There is still definitely interest in that property," Butler said.
