Validating longstanding rumors, MGM Resorts International has announced the sale of the gaming operations of MGM Northfield Park in Ohio. The slot-only racino is regularly the top-grossing gambling venue in the Buckeye State.
The sale price, announced October 16, is $546 million. Once taxes and transaction costs are deducted, MGM stands to net $420 million, according to a J.P. Morgan investor note. The transaction is expected to close by July 2026. MGM purchased the racino, formerly Hard Rock Rocksino, in 2018 for $275 million.
The purchaser is Clairvest, a Canadian private-equity firm based in Toronto. It would be Clairvest’s 22nd gaming-entitled property, one in which the firm expects to invest $165 million; the firm also holds gambling-enabled properties in New Jersey, New Hampshire, Delaware, and Wyoming.
According to the Toronto Globe & Mail, Northfield Park encompasses 17,000 square feet of casino floor. Its inventory consists of 1,600 video lottery terminals, in addition to a half-mile racing oval and a grandstand that seats 1,820 people.
J.P. Morgan number-crunchers calculated the sale price to be 6.6 times cash flow. “We think the transaction makes sense for MGM, is accretive vs. its current multiple, and along with this week’s earlier announcements (foregoing the NYC casino, receiving recurring dividends from BetMGM) will further boost MGM’s cash balance.
“We recognize this will likely fuel debate on MGM’s ultimate capital/strategic intentions,” the analysts continued, “but we assume that for now, MGM will look to prioritize deploying dry powder for share repurchases.” Although MGM had bought Northfield Park for 8.1 times cash flow, the analysts concluded that the company was making “a nice return on its operations.”
They appended that the return on investment was “solid,” in light of the fact that Northfield Park is a premium gaming asset. They also felt it compared favorably to the five times cash flow value ascribed to Penn Entertainment’s casinos and racinos.
Said Clairvest President Michael Wagman, “We remain committed to offering a premier entertainment experience for the local community. As we look ahead, we intend to build on the strong foundation laid by MGM and guide the continued expansion of the racino in the coming years. We are looking forward to building a collaborative relationship with our new industry partner, VICI,” an allusion to real estate investment trust Vici Properties, which owns the underlying real estate.
According to Action Network coverage, “Clairvest sees racinos — venues offering both casino games and horse racing — as stable and cash-generating assets.”
MGM CEO Bill Hornbuckle said the company was divesting Northfield Park in order to focus on overseas opportunities and online gambling, as well as reinvesting in its North American operations.
Added MGM CFO Jonathan Halkyard, “This is an excellent result for MGM Resorts and demonstrates consistency in driving transaction multiples at meaningful premiums over where MGM Resorts currently trades. The divestiture underscores MGM Resorts’ exceptional financial stewardship, delivering substantial value well beyond the original acquisition price.”
MGM stock nudged up 1.7 percent at the news, reaching $32.73 per share.
