PENNIES FROM KEVIN - The World's Biggest Theme Park
MGM Mirage has just made a deal to absorb Mandalay Resort Group. The buyout will not only create the largest gaming company in the world, but could forever change Las Vegas.
Written by Kevin Baxter
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MGM Mirage has pulled a Comcast, only they did so successfully. And quickly. In about a week, MGM Mirage made an offer for Mandalay Bay Resorts, had that offer rejected, then worked with Mandalay to work out an acceptable offer. So MGM Mirage will soon control 28 different casinos, eleven of which on the Las Vegas Strip: Mandalay Bay, the Luxor, Excalibur, Monte Carlo, Circus Circus and the current MGM Mirage casinos, the MGM Grand, New York New York, Bellagio, the Mirage, Treasure Island and the Boardwalk. (Yeah, the Boardwalk.) Of the 72,000 hotel rooms on the Strip, MGM Mirage would own more than half.
So how will this affect life in Las Vegas? Well, MGM has been on a buying spree for the past few years, having snapped up New York New York, Bellagio, the Mirage, TI (yuck!) and the Golden Nugget (which it later sold), and the end result has basically been higher room rates. Even though the Strip still has several casinos that aren't related to any others, MGM Mirage's growth spurt affected a lot. About two-thirds of the Strip's rooms were controlled by three companies, these two and Caesars Entertainment. So when one raised room rates, the others did also. Which usually got the loners to try increases also. (Just like Disney/Universal/SeaWorld in Orlando, huh?)
But, not all has been bad. A bigger company meant bigger hotels. Bellagio is adding another tower and TI got a more elegant makeover.
And bigger is what the new company will be about. The company is expected to have $750M annually in available cash, meaning plans that have been in the works could become reality much more quickly. The Boardwalk has been supposed to get the demolition treatment for years, and the 55 acres between the Monte Carlo and Bellagio, an area that was maintained by both companies prior to this deal. Mandalay had plans on the books for 22 acres next to Mandalay Bay and 15 acres across from Luxor. Plus, there are already ideas to implode the family-oriented Excalibur and building something nicer on the property. And any one of these properties could turn into the rumored Cirque du Soleil casino!
There had also been rumors of MGM Mirage buying the Tropicana across the street, which one might think is history, but those familiar with the southernmost part of the Strip know the new company would own three casinos on the southwest corner, two on the northwest corner and the sole casino on the northeast corner. The Trop, on the southeast corner, would give the company a southern Strip monopoly. The cash-rich company could connect the Bellagio-Monte Carlo monorail to the Excalibur and possibly across the street to the Trop and over to the MGM Grand, where the non-free monorail currently ends. (All this is fuzzy right now, as there are plans to extend that monorail to the airport, making a Trop stop likely.)
This many hotels in one company would also benefit tourists in another way: entertainment access. Currently, most shows hold out a large chunk of good seats for hotel guests. So if you are staying at Bellagio and wanted to see Mystere over at TI, you would get into that good section as an MGM Mirage guest. Outside of Celine Dion's new show, the new MGM Mirage would have a lock on almost all the popular Vegas shows, including Mamma Mia, O, Zumanity, Danny Gans, Blue Man Group and Rita Rudner. Furthermore, all these shows would be heavily promoted inside more than HALF the rooms on the Strip. And any bumpkin tourist could walk up to their MGM Mirage ticket desk and have dozens of shows to choose from without ever having to set foot on a non-MGM Mirage property. (Sounds kind of like Walt Disney World, don't it?)
Even better, the virtual monopoly on the south end might actually keep the current casinos from adding new towers, which is the current rage. Caesars currently has three major construction projects going on and they are creating havoc mid-Strip. Why would the MGM Grand or NYNY need a new tower when they can build a brand-new hotel in one of three empty lots? And for cash!
The absolute worst thing that might happen is the loner hotels deciding they need to consolidate to keep up. It is already believed that Caesars and Harrah's, now Numbers Two and Three, will start throwing money at other casinos. Harrah's recently bought the famous Binion's Horseshoe, which it will sell as Binion's as it is saving the Horseshoe name for a new megaresort, and has already had talks about obtaining the New Frontier, which is right across from the sure-to-impress Wynn Las Vegas. That is a good walk from the Harrah's on the Strip, but then the Harrah's owned Rio isn't even on the Strip, so Harrah's is used to distance.
Caesars, on the other hand, has its casinos all in a tightly knit bunch. You don't have to go outside to get from Paris Las Vegas to Bally's, and the Flamingo is right across the street, which is right across the street from Caesars Palace. The company recently sold the off-Strip Las Vegas Hilton, which was kinda weird since it is now on the city's monorail line. Would they want a single casino far from their other selections? Do they have a choice? Possibly, as the Barbary Coast and Imperial Palace are both sad places that border Caesars properties.
Still, with the south Strip monopolized by one company, and nowhere to go mid-Strip, the future clearly lies between Wynn Las Vegas and the Stratosphere, the nothernmost casino on the Strip. The first company brave enough to build one or two properties on this end might end up a big winner down the road, so to speak. Unlike the nearby Circus Circus (which MGM Mirage will certainly either implode or at least remodel), The Stratosphere and Sahara are worthwhile properties. Vegas thrives on the motto "Build it and they will come!" Well, except for the Aladdin.
Just look at what has happened to the south end. The MGM Grand and Excalibur added interest to the Tropicana's boring end. Luxor and New York New York made people want to stay at that end. Mandalay Bay has been nothing but icing on the cake. And Monte Carlo... well, you can get to the Bellagio from there.
Now if MGM Mirage does end up owning everything on the south end, wouldn't it be nice if they would cover the walkways outside? And maybe air-condition them! Hell, I'd never leave their casinos!
My two pennies... Gimme yours!
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