MGM Sells Atlantic City Land: Can New Jersey Casinos Survive?

MGM Resorts sells land in Atlantic City for $73 million.
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NEW YORK (

TheStreet

) --

MGM Resorts

(MGM) - Get Report

agreed last night to sell land from its Borgata hotel in Atlantic City for $73 million -- offering hope that there is still some potential interest in the depleted New Jersey gambling hub.

Vornado Realty Trust and Geyser Holdings agreed to buy the Borgata land, which is co-owned with

Boyd Gaming

(BYD) - Get Report

. The parcels equal about 11.3 acres, which would translate into about $6.5 million per acre.

The transaction still needs to be approved by New Jersey regulators, and is expected to close by the fourth quarter.

Earlier in the year, MGM said it planned to divest its 50% stake in the Atlantic City casino, which is currently in trust. The casino operator is still in talks with potential buyers of Borgata casino and hotel.

Once this transaction is complete, MGM will still own about 85 acres of developable land in Atlantic City.

"We view this

deal as a very modest positive in that there are still buyers of Atlantic City assets out there, at least at the right price," J.P. Morgan analyst Joseph Greff wrote in a note. "We don't necessarily interpret

the news as any indication that MGM is closer to selling its 50% stake in Borgata."

Atlantic City has been one of the hardest hit gaming markets, and it doesn't appear it will receive a reprieve any time soon. In June, gaming revenues in the market plunged 11.1% to $286.8 million.

In an effort to revive the region, New Jersey Governor Chris Christie said last week that he is trying to have the state take over the district and turn it into the Las Vegas of the East.

-- Reported by Jeanine Poggi in New York.

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