MGM Mirage is selling the Treasure Island Hotel and Casino on the Las Vegas Strip to Phil Ruffin, the billionaire, for $775 million (£506 million). The casino operator, which has owned Treasure Island since May 2000 when MGM Grand bought Mirage Resorts, said it would show a substantial profit on the deal.

Mr Ruffin, whose interests include casinos and greyhound tracks, is buying Treasure Island through Ruffin Acquisition for $500 million cash and $275 million in secured notes issued by Ruffin Acquisition. He is the former owner of the New Frontier hotel-casino, which was demolished in November last year to make way for The Plaza, a multibillion-dollar resort, and the $1.2 billion Trump International Hotel & Tower.

Mr Ruffin said that the 2,885 room, 90,000 sq ft Treasure Island is “ideally located in the heart of the Strip”. It was built for $450 million by Steve Wynn, a casino mogul, and opened in 1993.

Alan Feldman, an MGM Mirage spokesman, said: “This is a terrific deal for everyone involved. We are able to complete a transaction at the right price with no financing involved through any other third party.”

MGM shares closed up $0.81 or 1.6 per cent, at $11.50, in New York.

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