MGM Resorts Wins Key Maryland Gaming License

NEW YORK (TheStreet) -- Friday afternoon, Maryland's Video Lottery Facility Location Commission voted to assign the coveted Prince George's County casino license to MGM National Harbor. The new gaming resort will be operated by Las Vegas-based MGM Resorts International (MGM). The $925-million facility will feature approximately 3,600 video gaming devices and 140 table game and poker tables.

MGM, by virtue of the scale and location of its project, had been favored to win the license, so the Commission's decision did not appear to come as a major surprise to equity investors. At the time of publication, MGM's stock was up 0.7%, in-line with today's gain in the S&P 500. The shares of rival gaming operator Penn National Gaming (PENN), also in contention for the license, were up 0.2%.

For MGM, the casino license grant, while representing a small potential profit source in comparison to the company's Las Vegas and Macau resorts, would help develop a "northeast corridor" of sorts, for the gaming operator. MGM is also vying for a casino license in Springfield, MA. A parallel license victory in Massachusetts would enable MGM to access another important east coast leisure market.

Among existing Mid-Atlantic casinos, PENN has perhaps the most to lose as a result of MGM National Harbor's license win. National Harbor, which sits directly across the Potomac River from Alexandria, Va., is located just 70 miles from PENN's Hollywood Casino at Charles Town Races. PENN had recently earned about one-fifth of its annual EBITDA from its Charles Town racino.

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