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Friday, October 26, 2007


MGM PLANS CASINO RESORT TO RIVAL BEST OF LAS VEGAS 

MGM Plans Casino Resort to Rival Best of Las Vegas - New York Times



Atlantic City, less attractive cousin to Las Vegas, has been terrible in increasing tourism and cash revenue. The casinos and hotels are old and out-of-date. The only saving grace for "AC" is that it lies in the middle of the megalopolis formed by the Washington-Baltimore-Philadelphia-New York-Boston corridor. Atlantic City has squandered many chances to be a major destination choice for millions of domestic and international travelers.




An otherwise dismal year for the Atlantic City casino industry turned a bit brighter yesterday when MGM Mirage, the gambling giant, announced plans to build a huge resort hotel that would rank among the most expensive casino projects in history.

The casino hotel, to be called the MGM Grand Atlantic City, will cost $4.5 billion to $5 billion, according to the company. In Las Vegas, the current record holder is Wynn Las Vegas, which cost $2.7 billion and opened in 2005, though there are several casino hotel projects on the drawing boards in the $4 billion to $5 billion range.

The MGM announcement comes at a time of declining gambling revenue as Atlantic City faces increased competition from slot parlors that have recently opened in Pennsylvania and New York. Through the first nine months of 2007, the city’s casinos won a combined $3.8 billion, a 5 percent drop compared with figures in the period a year earlier, according to the New Jersey Casino Control Commission.

“What this says is that, like us, MGM sees this decline as a temporary phenomenon,” said Michael Pollock, publisher of The Gaming Industry Observer, a trade journal based in Atlantic City. “What they’re saying with this proposal is that they see the long-term growth potential for Atlantic City as very real.”

Gordon Absher, an MGM spokesman, said the company did not look at the overall performance of Atlantic City’s 11 casinos but instead focused on the experience of a single property: the Borgata, the first billion-dollar casino in a market that still ranks as the second-largest in the United States.

Despite new competition from nearby markets, at the Borgata, which opened in 2003, revenue from slot machines and table games has risen modestly in the first nine months of 2007. MGM owns 50 percent of the Borgata.

“The Borgata has changed the paradigm for Atlantic City,” Mr. Absher said. “The Borgata shows that if you provide people with the right product, Atlantic City can attract the customer who has an appetite for the Las Vegas experience but doesn’t want to fly across the country to have that experience.”

The project, expected to be completed by 2012, includes three distinct hotel towers. One is expected to have a “more contemporary feel,” Mr. Absher said, while a second will be more upscale. A third, he said, will be an all-suites tower “for high rollers or those who are willing to pay to be treated like high rollers.”

The property will also include a 1,500-seat theater, a spa, a convention center and up to 500,000 square feet of retail space.



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