In what legal experts say is the largest settlement of its kind stemming from a mass shooting, MGM Resorts International Inc. agreed Thursday to pay up to $800 million to victims of the 2017 massacre outside its Mandalay Bay Casino & Resort in Las Vegas.
More than 4,000 survivors and relatives of those killed in the deadliest mass shooting in modern U.S. history will be eligible for payments through a victims compensation fund, according to people familiar with the case.
The settlement is expected to total $735 million to $800 million, lawyers for the company and plaintiffs said. MGM has insurance available for up to $751 million, it said.
“We have not seen a mass shooting of this size and we have never seen anything close to the scale of this settlement,” said Georgia State University law professor Timothy Lytton, the author of a book on gun litigation who wasn’t involved in the case.
Large settlements in mass shootings are rare in part because it can be difficult to hold other parties responsible for the criminal acts of individuals, legal experts said.
Movie theater operator Cinemark Holdings Inc. largely defeated lawsuits over the rampage at an Aurora, Colo., theater in 2012 that killed 12 people and injured 70 others. A judge ruled that the shooter was mostly responsible for the carnage. Last year, a judge threw out a lawsuit against Orlando, Fla., police in the 2016 Pulse Nightclub attack there.
But such settlements aren’t unprecedented. The state of Virginia paid $11 million to the families of victims of the 2007 Virginia Tech massacre. Families in the 1999 Columbine High School attack in Colorado won $2.5 million from the parents of the gunmen and two men who provided the teens with guns.
In Las Vegas, Stephen Paddock fired into a crowd of 22,000 outdoor concert-goers from the 32nd floor of the Mandalay Bay on Oct. 1, 2017, killing 58 people and injuring hundreds more before he killed himself.
In the days leading up to the massacre, Paddock gambled and chatted with casino and hotel staff, who helped him carry some of the 20-plus pieces of luggage up to his room that contained semiautomatic rifles and thousands of rounds of ammunition.
The lawsuits blamed MGM for security lapses, such as failing to notice that he was stockpiling weapons in his room.
Survivors, including 23-year-old Paige Gasper, who was shot in the chest, said they hoped the settlement would make companies more vigilant.
“My hope is that our pain and the continuing daily struggle we face will not be forgotten and that we continue to honor the 58 people we lost that night, and that this settlement sends a message to large companies like MGM to do more to protect people and prevent horrific events like October 1st,” Ms. Gasper, now a graduate student in counseling in California, said in a statement.
Michelle Tuegel, a lawyer who represented Ms. Gasper and others, said the settlement would pay for ongoing medical and psychological care for the survivors, as well as things like lost income.
“In a mass shooting it is very unusual to get a settlement,” said Ms. Tuegel. “In so many situations it’s hard to find someone who could actually compensate the survivors and victims and bears some responsibility.”
Plaintiffs’ attorneys and MGM emphasized Thursday that the agreement isn’t an admission of liability.
“We believe there’s really one person who is truly responsible for this and unfortunately, there’s really no way to bring that person to justice,” MGM General Counsel John McManus said in an interview. “When you have the choice of many, many years of litigation that’s painful for everyone, it’s definitely best for the company, the community and the victims to move forward and try to get past this.”
The court will appoint an administrator to evaluate the claims of the survivors and families of those killed and divvy up the money, according to the plaintiffs’ attorneys in the case. That process is expected to finish next year, they said.
The settlement matches what MGM warned investors it might pay in the litigation in a financial filing in May.
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The size of the MGM settlement will likely drive concert venues, hotels and other companies to ratchet up security even further than they already have, legal experts said.
“You’re going to see a lot of pressure on venues to beef up security,” said Mr. Lytton.
Strong liability protections for gun companies signed into law in 2005 have meant that they haven’t had to pay out after mass shootings. But earlier this year, the Connecticut Supreme Court said a leading maker of AR-15 style rifles could be held legally responsible for marketing practices that allegedly made the semiautomatic gun the weapon of choice for mass shooters in a wrongful-death suit brought by the families of victims killed in the 2012 Sandy Hook Elementary School massacre.
The same attorneys filed a separate lawsuit in the Las Vegas massacre earlier this year, alleging that the makers of the 12 different semiautomatic rifles used by Paddock knew they could be easily modified to fire like fully automatic machine guns.
Write to Zusha Elinson at zusha.elinson@wsj.com
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