Issue 218
November 15- 21, 2004
Volume 4
page 1

This Issue

Gaming News

MGM Mirage to Build Las Vegas Megaresort

Expanding casino operator makes third Las Vegas-area property deal this year

MTR Gaming Group to take reins of Binion's Horseshoe casino in Las Vegas

Wynn Resorts Announces Common Stock Offering

Opening of Phase II at Black Oak Casino Slightly Delayed: Main Gaming Floor Now Scheduled to Open January 12th


Show Time Debbie Reynolds legendary Hollywood performer, returns to The Orleans.

Column The ABCs of Slots
By John Grochowski

Check out our entertainment highlights & upcoming tournaments

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MGM Mirage to Build Las Vegas Megaresort
As reported by the Associated Press

LAS VEGAS, Nevada - Gambling giant MGM Mirage intends to build a new 4,000-room megaresort and sprawling urban development in the heart of the Las Vegas Strip, a project that would dramatically change the landscape of this city's most important commercial center.

MGM Mirage officials are calling the ambitious plan "Project CityCenter," and they believe it will help transform Las Vegas into a sophisticated, multidimensional city, one that rivals other major metropolitan areas.

"Our master plan represents a significant new direction for our city and our company," said Terry Lanni, MGM Mirage Inc.'s chairman and chief executive.

The multibillion-dollar project includes three, 400-room boutique hotels, approximately 550,000 square feet of retail shops, dining and entertainment venues, and a 1,650-unit luxury condominium complex.

The massive development will be built on a 66-acre site between the Bellagio and Monte Carlo hotel-casinos, with the first phase creating 12,000 jobs when it's completed in 2010.

Over the next 18 months, MGM Mirage will pick a master architect and select residential and hotel partners.
Once completed, it could be the largest privately funded development in the country, said Jim Murren, MGM Mirage's president and chief financial officer.

With the announcement, MGM Mirage has settled the question of where it would construct the company's next highly anticipated hotel-casino. It had debated putting the megaresort in either Atlantic City or Las Vegas, which won out for its unprecedented popularity that has helped gambling companies reap dizzying profits since 2003. The city is expected to top a record 37 million visitors this year.

Gambling analysts were cautious about MGM Mirage's announcement, which was expected Wednesday.
"It is somewhat outside the box for MGM," said John Mulkey, a Bear Stearns Co. gambling analyst in New York. "They've been more active acquirers than developers in the past, but it certainly seems within the scope of their abilities to do something impressive with the land."

Like the city, MGM Mirage should soon undergo some enormous changes itself.

Lanni has said the planned $4.8 billion merger with Mandalay Resort Group Inc. is on track for the first quarter of 2005.

The deal is awaiting government approval and would create the world's second-biggest gambling company, a title currently held by Harrah's Entertainment Inc.

The MGM Mirage plan is the third megaresort in the works. Las Vegas Sands has started construction on The Palazzo, a $1.6 billion hotel-casino that's scheduled to open in 2007. It sits across the street from Wynn Las Vegas, Steve Wynn's latest gambling temple that cost $2.7 billion and is slated to open April 28.

On Wednesday, MGM Mirage shares fell 78 cents to close at $58.92 on the New York Stock Exchange - near the high end of their 52-week trading range of $34.05 to $60.07.

Expanding casino operator makes third Las Vegas-area property deal this year
As reported by Las Vegas Review-Journal Knight Ridder/Tribune Business News

LAUGHLIN, Nevada - Barrick Gaming Corp. expanded its Southern Nevada portfolio on Wednesday, acquiring the Golden Nugget Laughlin for $31 million from Poster Financial Group.

The deal, which the companies expect to close in the first quarter of 2005, requires state and federal regulators' approval. The deal includes working capital at the sale's closure, and grants Barrick rights to use the Golden Nugget name for up to two years.

Barrick Gaming co-founder and President Stephen Crystal said his company plans to keep the Golden Nugget Laughlin's current staff and plans no layoffs. The 300 room hotel-casino has about 1,000 workers.

The Golden Nugget Laughlin is Barrick's third big Southern Nevada acquisition this year. The company in March acquired Jackie Gaughan's four principal downtown hotel-casinos -- the Plaza and its seven additional acres, the Las Vegas Club, the Western Hotel and the Gold Spike -- for $82 million. Last month, the company bought the Queen of Hearts and Nevada hotel-casinos for $7.1 million.

In a conference call Wednesday announcing Poster Financial Group's third-quarter earnings, Poster Financial Chairman and Chief Executive Officer Tim Poster said finances drove this company's decision to sell the Golden Nugget Laughlin.

"During the quarter, we received several unsolicited and attractive offers to purchase the Laughlin property," Poster said. "Careful analysis has brought to light the different rates of return on capital reinvestment in our two hotel-casino properties. It is evident that the rate of return has, and will continue to be, greater at the Las Vegas property."

Meanwhile, Poster said his company would use proceeds from the Golden Nugget Laughlin to repay and reduce debt. In a statement, Poster Financial said it expects a modest gain from the sale, but gave no specifics.

Barrick's Crystal said his company sees similarities between its Laughlin and downtown Las Vegas purchases. Both markets attract value-seeking customers, both are ripe for consolidation, and both have untapped potential, he said.

"While both markets have been criticized for not being growth markets, in fact both markets are showing recently that they are in a growth mode," Crystal said. "Laughlin is over time going to grow as a community and as a place where people will retire to."

Crystal said he expects to rebrand the property before the two-year name-rights period ends.

"We hope not to rely on the (Golden Nugget) name for long," he said. "We hope to rebrand as soon as is practical."

Meanwhile, Poster Financial reported a pro forma net loss and a sharp drop in cash flow during the third quarter ended Sept. 30, hurt by low table-game hold percentage.

In a statement, the company said it had, on a pro forma basis, a net loss of $8.7 million the quarter ended Sept. 30, compared with a net loss $900,000 a year earlier. These amounts reflect the acquisition of the Golden Nugget Las Vegas and Golden Nugget Laughlin casinos and related financing transactions as if they had occurred at the beginning of 2003.

On Jan. 23, Poster Financial completed the acquisition of the properties for $213.7 million, consisting of a $215 million purchase price (adjusted to $210.2 million for working capital and other adjustments at the closing date) and approximately $3.5 million in transaction fees.

Also for the third quarter, Poster Financial said it had pro forma negative cash flow, defined as earnings before interest, taxes, depreciation and amortization, of $300,000, compared with positive cash flow of $6.7 million a year earlier.

Pro forma consolidated revenue rose 6.8 percent to $60.9 million from $57 million.

Despite the results, Poster remained upbeat. During the conference call, he said other key business indicators were up in the quarter, including occupancy percentage and average daily rate. Slot handle and table-game drop also increased, he said.

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