MGM MIRAGE expansion into Britain proceeding

Friday, Nov. 7, 2003 | 10:47 a.m.

MGM MIRAGE executives today said the Las Vegas company expects to own or operate several large casinos in the United Kingdom should that government proceed with anticipated gambling industry deregulation and create favorable investment conditions.

The statement was made in conjunction with news that British gaming regulators have approved MGM MIRAGE's 25 percent acquisition of British casino operator Metro Casinos Ltd.

MGM MIRAGE announced the acquisition in May, becoming the first Las Vegas casino giant to strike a formal deal to build casinos in Britain. Metro Casinos, a subsidiary of RJ Brown Holdings Ltd., is constructing a casino in Bristol, on England's west coast, that is expected to open by March 2004 and is pursuing other casino opportunities in the region. Regulators also granted Metro permission to own and operate that casino. RJ Brown also owns a casino on the country's east coast.

The approvals bode well for MGM MIRAGE's expansion plans in Britain, Managing Director of MGM MIRAGE Development Europe Lloyd Nathan said.

"The fact that Metro Casinos has been granted this certificate of continuance following our acquisition of a minority stake potentially stands us in good stead for the future," Nathan said in a statement.

"Should the proposed deregulation create an attractive environment for investment, we will be looking to own or operate a number of large-scale casino operations in the United Kingdom," he added.

U.K. gaming rules are similar to Nevada's in that they require that country's Gaming Board to conduct an investigation prior to approving significant shareholders. Also similar are requirements that companies obtain individual licenses from the Gaming Board to operate each casino in Britain.

"We see the U.K. as being a significant market in which we will be able to utilize our depth of knowledge and experience to develop large-scale gaming, leisure and entertainment complexes," MGM MIRAGE Chief Executive Terry Lanni said in another statement today.

Last month, Harrah's Entertainment Inc. Chief Executive Gary Loveman said his company wants to build two or three major casino resorts in the United Kingdom in addition to the eight to 10 smaller, regional casinos the company had already committed to build with U.K. bingo operator Gala Group Ltd.

Park Place Entertainment Corp., Mandalay Resort Group and casino bosses Steve Wynn and Sheldon Adelson are among the Las Vegas players expressing interest in Britain. Last month Mississippi-based riverboat operator Isle of Capri Casinos Inc. became the first U.S. company to receive British regulatory approval to own casinos in the United Kingdom, announcing it expects to acquire a two-thirds interest in U.K. casino developer Blue Chip Casinos Plc. before the end of the year.

Last week MGM MIRAGE announced a larger commitment of at least $250 million to form a joint venture with a U.K. special events company to potentially build a casino and entertainment complex in the heart of London.

In an interview with the Las Vegas Sun last week, MGM MIRAGE President and Chief Financial Officer James Murren said those plans to develop a casino in a London exhibition hall mark one of the first formal deals struck by a U.S. company in the U.K.'s commercial center.

"It's a very prominent early step" in the company's British expansion strategy but "it's certainly not our (last) step," he said.