MGM Mirage looks to Asia for expansion

Friday, June 5, 2009 | 9:26 a.m.

Headlines from the Vegas gaming industry

A second Las Vegas-based gaming, hotel and entertainment company is looking to expand in Asia -- despite financial challenges for its American operations.

MGM Mirage is in talks with three investor groups to develop a casino in Taiwan, an executive said this week.

"I have a desire to aggressively expand in Asia. It's the most exciting gaming market in the world," Lloyd Nathan, MGM Mirage president of global gaming development, told Reuters at an industry conference.

Reuters said he declined to name the three groups for the project in Taiwan, an island nation working to allow casino gambling. Nathan said all were Taiwanese and would fully fund the development with MGM Mirage acting as operator.

Reuters quoted him as saying MGM Mirage was also looking at potential projects in Japan and the Philippines. MGM Mirage already has a stake in a casino in Macau -- a market likely to compete with the development of a gaming market in Taiwan.

An executive with Harrah's Entertainment Inc., also facing financial challenges, said at the same conference this week it's looking to expand in Asia as well.

MGM Mirage this spring completed extraordinary efforts to finalize financing for its CityCenter project in Las Vegas and to bolster its balance sheet with the issuance of $2.5 billion in debt and equity.

The capital raise was needed because MGM Mirage was having difficulty serving its $14 billion in debt obligations as the recession reduced net revenue by 20 percent in the first quarter to $1.5 billion. Including a $190 million gain on the sale of the Treasure Island, MGM Mirage earned $105.2 million in the quarter, down from $118.3 million in 2008's first quarter.

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By qq49h

June 5, 2009

6:42 p.m.

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hopefully we put a bit of the $2.5bil in the bank cause...we will need it after not selling our $243mil in condos for december 16 people
By BorisR (Boris Radtke)

June 6, 2009

3:41 a.m.

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Whatever they do, I will sit on my MGM stocks and keep on buying further stocks of other casino operators. There will be a tournaround some day and when this happens, stocks will celebrate this and will go up multi-fold. I am sure about it. Actually, it's not important if this happens in 2010 or 2013. The longer it takes, the more stocks I will have and then the leverage will be even bigger.
As for Taiwan, I heard that the Chinese government is not that exited about the plans and if Taiwan gets casinos, they want to limit tourist visas for their citizens or even prohibit Chinese citizens to visit Taiwanese casinos. Therefore I think it's quite a gamble setting up plans for casinos in Taiwan. I don't think that Taiwanese people alone are wealthy enough to fill the MGM cash register.

From Switzerland