Regulators OK private salon for MGM Grand

Thursday, July 11, 2002 | 10:47 a.m.

State regulators Wednesday approved a request by MGM MIRAGE to launch one of the nation's first-ever private casinos -- a move that company executives say will help it attract international customers who now gamble at more private casinos in Europe and Asia.

The private casino, located in the MGM Grand resort on the Las Vegas Strip, will consist of three rooms separated by frosted glass doors and will be accessible from a passageway leading from the MGM Grand's Mansion casino, a high-limit area, executives told the state Gaming Control Board.

But it won't be the look of the rooms that will most set them apart. A high-tech surveillance system of cameras and live streaming video will allow state regulators to view every card turn or slot pull -- giving regulators unprecedented access to the casino floor.

Each room is equipped with one fixed camera and six moving cameras that can tilt toward and zoom in on their subjects. The cameras are wired to a central system that can stream live video at roughly 30 frames per second.

Each room will likely only have space enough for at least one table game, or a few slot machines, MGM Grand executives said.

Legislation enacted last year allowed regulators to change Nevada law requiring that all gambling be conducted in public. The laws help to ensure that games are played fairly and that, ultimately, the state receives taxes due on gaming revenues.

Regulations approved in January allow licenses for so-called "international gaming salons" -- enclosed, high-limit rooms where wealthy players can gamble out of the public eye. Rules set minimum wagers at $500 and only allow gamblers with cash or credit lines of at least $500,000.

MGM MIRAGE executives pushed for the change more than two years ago, arguing that they were losing potential customers to foreign casinos that allow private gambling areas.

The company's private casino plan now moves to the Nevada Gaming Commission, which is expected to approve it.

MGM MIRAGE can't pinpoint revenues or say how many additional casino customers the rooms would attract, Bob Moon, chairman of MGM MIRAGE Marketing and head of the company's international marketing efforts, told board members Wednesday.

Still, the MGM Grand anticipates booking the rooms -- which can also be converted into public areas -- for private patrons at least 100 days out of the year.

About 80 percent of these gamblers will be existing MGM Grand customers who already patronize the casino's high-limit rooms, while the remaining 20 percent will likely be new customers, Moon said.

MGM MIRAGE will focus its marketing efforts on international customers by using the company's roughly one dozen foreign corporate offices to establish contacts, he said.

Detailed financial logs on private salon customers, including credit line information and details on length of play, will be reported separately to state regulators.

MGM MIRAGE chose the MGM Grand to debut the private casino because the property's Mansion casino is the most elaborate of its facilities catering to high-rollers, company spokesman Alan Feldman said.

MGM MIRAGE controls an estimated 50 percent of the high-roller business on the Las Vegas Strip. Also, its Bellagio hotel-casino is arguably the city's priciest. Still, the company doesn't have any immediate plans to apply for private casinos at any of its other properties, Feldman said.

"We'll start with it (at MGM Grand), then, as demand warrants, we'll expand it further."

Caesars Palace last week applied to launch a similar private casino in its high-limit area, called Palace Court.

The private casino would consist of three separate rooms accessible from the Palace Court casino floor, Park Place Entertainment Corp. spokeswoman Debbie Munch said. The rooms would have space for one to four table games. Park Place launched Palace Court, a 3,000-square-foot casino with about 23 table games, in mid-December.

The fact that only two casinos have so far applied for private salons doesn't necessarily indicate an overall lack of interest, Control Board Chairman Dennis Neilander said.

"Companies are moving cautiously ... it's not an inexpensive venture" to implement the surveillance technology needed to comply with the regulations, Neilander said.

A lagging economy may also be holding companies back, he said. "Companies are focusing on other things right now."

MGM Grand expects to spend $200,000 to upgrade the rooms as private salons, executives said. The hotel-casino will likely become only the second nationwide, behind the tribal Foxwoods Resort Casino in Connecticut, to offer such areas.