MGM Mirage Rides Casinos, New Investors to Record Profits
MGM Mirage had a huge jump in fourth-quarter profits over the previous year, as the casino giant's partnership with Dubai World helped the company net $872 million for the period. Almost 3/4 of the income came from Dubai's investment of almost $3 billion in the CityCenter project under construction in Las Vegas.
The profit for this year's fourth quarter was over four times that of the previous year, when net income posted was $201 million. Other than the massive investment by Dubai, MGM also found its Las Vegas properties growing at a comfortable rate. The company's Strip hotels reported a 5% climb in income from room rentals, and gambling revenue rose 2%, driven by a climb in baccarat play of 17%.
"Even while closing on the most historic transaction in our company's history, the CityCenter joint venture and strategic relationship with Dubai World, our dedicated employees delivered exceptional operating results," said Chairman and Chief Executive Terry Lanni.
MGM Mirage has been devising plans to spread the MGM brand beyond the bounds of casinos and gambling. The partnership with Dubai, a country where gambling is forbidden, represents a move to accentuate hotel and hospitality identities for MGM.
MGM is also currently working with Pansy Ho, daughter of casino billionaire Stanley Ho, to partner in building a new casino and resort hotel in Macau, the MGM Grand Macau. This venture would cost $1.25 billion and establish MGM in the world's newest gambling capitol, as Macau passed Las Vegas last year in gambling revenue generated.
Although MGM Mirage is behind competitors like Las Vegas Sands and Wynn in reaching the Macau market, the reduction of emphasis on gambling as the primary source of income allows the company more flexiblity than some casino empires. This is a clever and thoughtful strategy, well-positioned in light of the increasingly crowded casino market.
