Thursday was the D-Day for Dubai World, as the Nevada Gaming Commission (NGC) has signed off on Dubai World’s exit. Dubai World, a Dubai investment arm in the UAE, had a 14-year partnership with MGM Resorts International in developing Las Vegas’ own CityCenter.
Chairman John Moran also said goodbye to the Commission who has been serving for almost 17 years. Moran was originally appointed in 2004 and re-appointed by both Republicans and Democrats. He was the acting chairman since 2020 and departs as the Commission’s longest-tenured member in history. With his departure, a vacancy is likely to be filled in the Commission by Gov. Steve Sisolak.
Nevada Has Prospered During the Pandemic, According to Moran
Moran stated that his last two years were “very challenging.” Everyone knows that Nevada is the so-called gold standard to all jurisdictions. All of them look up to Nevada as to what the authorities are doing there. During the pandemic, Nevada was the state that was looked up to by many jurisdictions in terms of new games and concepts. The state has been dominating the gambling world by doing all the right things, which is something that everyone is aware of.
While speaking on the topic, Moran said that, thanks to the leadership of Gov. Sisolak and J. Brin Gibson, the Gaming Control Board Chairman, not only did Nevada managed to survive during these hard times, but it also prospered. Although difficult decisions were made, gaming was protected, lives were saved, and ultimately, the community had a lot of help.
He closed off by saying that the pandemic isn’t over, but the doors are open in Nevada, which is something that was hard to achieve. July was one of the best months in the state’s history, especially for Las Vegas. These numbers were gained by keeping the doors open, the good leadership, and the dedication of all gambling employees. All of them have protected the licensees, the tourists, the employees, and the community. Thanks to the fact that Nevada acted quickly and effectively on the protocols and emergency orders, which not all liked, but understood that they were necessary to save lives and thus, move in a direction where gambling can prosper.
The Commission Approved MGM’s Acquisition of Dubai World
In November 2007, the Commission gave the green light to MGM to buy Dubai World’s 50% share in CityCenter for a price of $9 billion. The project included the Shops at Crystals, the Vdara condo-hotel, the previously known Mandarin Oriental condo tower and hotel, and the Veer Towers. Of the joint venture, Aria and Vdara are all that remain.
With the departure, a relationship that was contentious ends. A lawsuit against MGM was launched by Dubai to protect its interests when the economy and real estate were devastated by the Great Recession and the project almost ended up in bankruptcy. After lenders provided emergency funding, the project got back on its feet.
With the acquisition of the remaining CityCenter portion, MGM will sell the assets for $3.89 billion to Blackstone Real Estate Investment Trust. Then, it will lease it back and continue to operate the properties by paying an annual rent of $215 million. In doing so, that will be MGM’s last ownership stake in properties on the Strip.
Dubai counsel Jeff Silver of Dickinson Wright thanked the board for its flexibility in finding ways to properly regulate the industry during the presentation of Dubai World. Up until Dubai World showed up in 2007, the Commission never licensed a country.
Silver said that the flexibility of the Commission in this particular case speaks highly on what Nevada gaming represents. It gave the green light to Dubai World to invest more than $5 billion just before the Great Recession was ravaging and, in doing so, kept thousands of people employed and working on the construction.
Commissioner Rosa Solis-Rainey was also very appreciative of what Dubai World has done for the economy in Las Vegas and stated that if the company wants to come back and invest again, it is more than welcome to do so. As for Commissioner Ogonna Brown, she stated that Dubai World has been an amazing partner and, thanks to its performance, it is welcome to come back. Vice-Chairman Steve Cohen also praised the company and stated that it has done a great service and managed to write history, which is something that Nevada is cognizant of.
Even though Dubai World does not have any gaming entities, it has hotel holdings in the US.