MGM’s march to the sea; REITmania explained

Where MGM Resorts International goes, other casino companies Kasim Reedare quick to follow — to Atlanta, in this case. Mayor Kasim Reed (pictured) is being coy about who the new suitors are, other than two are domestically based (would Las Vegas Sands pass on another urban opportunity, having turned down Boston?) and one is from overseas, which surely must be Genting Group. Not that the Hizzoner is a fan of gambling, saying Las Vegas is what it is for a reason but “it would be fiscal malpractice … not to hear these people out.”

Rumors of the potential site continue to circle on doomed Turner Field (the Atlanta Braves go through baseball stadiums like you and I through Kleenex). For its part, MGM is backing a bill by Economic Development Committee Chairman Ron Stephens nathan_dealthat would turn Georgia into the new casino mecca, authorizing up to six gambling halls in the Peachtree State. To keep the casinos from clustering around one or two cities, Georgia would be divided into five zones. Regulation would be handled by the Georgia Lottery Corp. Any proposed casino would also have to get the thumbs-up from Gov. Nathan Deal (R, right) and that’s where it gets especially tricky, since Deal is a firm casino opponent.

Momentum would appear to be going against Deal. But one would have thought Florida would have approved resort casinos by now and the process remains stuck in the mud. In the meantime, Georgians will have to keep going to Harrah’s Cherokee, in North Carolina, for their gaming fix.

* The Railroad Pass casino, near Boulder City, may have been a railroad-piclow priority for MGM but it’s Job One for new owner Joe DeSimone. He’s already had the joint repainted and is almost done with repairing the roof. Next on his agenda is a new entrance to the casino. It’s nice to see that MGM’s trash is DeSimone’s treasure.

* If you’re wondering what REITmania is all about, The Associated Press has an excellent explanation. For the seller, it’s a means of offloading long-term debt. And for shareholders in the REIT, it means that 90% of potentially taxable income goes straight to them. The onus for property upkeep, however, remains with the renter (Pinnacle Entertainment, Penn National Gaming) not the landlord. It’s interesting to see that Gaming & Leisure Properties did a bit of cherry-picking in its Pinnacle buyout, excluding newest and most challenged property Belterra Park, Pinnacle’s Ohio racino.

* If you were on the Strip last week and saw vans full of young men in athletic gear pulling up to casinos, you may have witnessed some of the frenzy of the Korean Basketball League draft, recently held in Sin City.

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