Inside Gaming Column: Mover, Not Monorail, Motivates MGM Mirage

Gaming giant MGM Mirage has its heart set on expanding the former Mandalay Resort Group people-mover as an alternative to the notoriously flawed Las Vegas Monorail. MGM Mirage Chairman Terry Lanni says it is his company's intent to link each of its hotels all the way from Mandalay Bay on the Strip's south end to Treasure Island on the north. Lanni is confident that Harrah's Entertainment, the new owner of Caesars Palace, which sits in the middle between Bellagio and The Mirage, will sign on to the plan. Harrah's Chairman Gary Loveman said no talks have taken place, but he's open to the idea.

Confidentially, investment bankers in Asia are raising red flags for investments in China. Standard and Poor's, for one, counsels clients that slowing global economic growth, coupled with the sliding dollar and signs U.S. consumers are tiring, create risks for investments in China and Macau. Bankers are also concerned Western enthusiasm may create oversupply and tamp down returns on investment.

Still, Wall Street investors are pushing casino developments in Macau for a very simple reason. Projects there are promising 100 percent returns within 18 months, yields never heard of in the United States. Take the newest deal between Australia's richest person, Kerry Packer, and Macau's Stanley Ho for a $1 billion development with three hotels, two apartment towers and a casino. With $350 million in equity, Parker and Ho should recoup their costs in a year or less. And that, in short, is why casino operators in Las Vegas are compulsive about the Far East.

The quick turnaround of a buck is also the reason for all the interest in condominium developments here. Space in the towers is sold -- often before the resorts are built. Hotel-casinos, by comparison, depend on attracting hordes of visitors who spend relatively small sums each. The condos, when successful, lead to faster returns, keeping Wall Street and investors happy.

Rampant rumors of layoffs at the former Caesars Entertainment properties seem vastly exaggerated. In fact, there have been about 28 pit boss positions cut at Caesars Palace, the Flamingo, Bally's, Paris Las Vegas and the Rio. To improve efficiency and customer service, Harrah's is eliminating the 28 positions, but replacing them with the same number of assistant casino shift manager positions. The new managers will be empowered to resolve customer disputes, hire new employees and make credit decisions that used to waste time for Caesars and players. The former pit bosses are all eligible to apply for the reorganized positions although not all may be hired. Harrah's says the move will make players happy.

Gaming Wire Editor Rod Smith can be reached by telephone at 477-3893, e-mail at rodneysmith1@cox.net or by fax at 387-5243.

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