New Haven, Connecticut (AP) — MGM Mirage Inc. has agreed to license its name to the Mashantucket Pequot Tribal Nation for a planned USD 700 million hotel and casino expansion at the Foxwoods Resort Casino.
The new hotel and casino will be called the MGM Grand but will be operated by Foxwoods employees. The American Indian reservation already is home to one of the world’s most successful casinos.
The agreement gives Foxwoods an experienced partner as it tries to expand its convention and entertainment business and attract more minorities. Foxwoods will have access to MGM‘s database of more than 22 million customers and will use MGM‘s partnerships with other companies to help attract new restaurants and top-tier entertainers to eastern Connecticut, Foxwoods CEO William Sherlock said.
Las Vegas-based MGM Mirage owns and operates 24 casinos in Nevada, Mississippi and Michigan. Its Las Vegas properties include the MGM Grand, the Bellagio and Mirage hotels.
„They have some tremendous connections and alliances with restaurant operators and a tremendous access to entertainment,“ Sherlock said.
By partnering with Foxwoods, MGM gets brand exposure in the lucrative Northeast gaming market, which is dominated by Foxwoods and Mohegan Sun. MGM does not operate an East Coast casino, though it is a partial investor in the Borgata in Atlantic City.
Sherlock said he expects to add the MGM name to future projects as part of an ongoing marketing deal between the two companies.
The terms of the deal were not immediately released. Foxwoods is operated by the Mashantucket Pequot Tribal Nation, which does not release financial figures.
„I don’t know if you’ll see a lot of change at Foxwoods directly, said Michael Thomas, the chairman of the Mashantucket Pequot tribe, which runs Foxwoods. „This facility will obviously be an MGM facility.“
Terry Lanni, chairman and chief executive of MGM Mirage, said the two parties have „signed this understanding to come up with ideas and we’ll be exploring that now.“
The Foxwoods expansion includes plans for an 825-room hotel, 5,000-seat theater, a convention center and ballroom, nightclubs and 1,500 more slot machines.
Under its gaming compact, Foxwoods provides the state with a quarter of slot revenues.
„I would think that people at the state level would be thrilled with this,“ Thomas said. They will get more money, faster.“
The two companies also agreed to collaborate on casino investments off the reservation, with MGM lending USD 200 million to the tribe’s development company. The Mashantuckets are already planning a 600-acre resort and casino in the U.S. Virgin Islands.
MGM is scheduled to release first-quarter earnings this week. Fourth-quarter earnings were up 31 percent to USD 97.8 million, the company said in February.
Shares of MGM rose 39 cents to close at USD 43.88 on the New York Stock Exchange.