Gaming Friday: Possible Mirage Sale, Caesars Bankruptcy Troubles and Atlantic City's Future
Earlier this week, Wynn Resorts blamed a slumping Macau casino market for a 72 percent decline in second quarter profits.
And, a federal bankruptcy judge has thrown a curve ball into the reorganization of Caesars Entertainment’s largest operating division.
If that wasn’t enough, Wall Street analysts say MGM Resorts International may look at selling the iconic Mirage casino.
MGM officials won’t comment on rumors of a Mirage sale.
Las Vegas Review-Journal gaming reporter Howard Stutz and publisher of Global Gaming Business Roger Gros talked to KNPR's State of Nevada about some of those big topics.
Why would MGM Resorts International put the Mirage up for sale?
Howard Stutz: “Mirage kind of sits out there alone. They’re focusing on their development in Maryland, Massachusetts and Macau, building properties there…. And all the properties at the south end of the Strip. Those all kind of connect. They’re going to redo the Monte Carlo. They’re probably going to get a new name on the Monte Carlo at some point. And all that stuff connects and then you have the MGM and their name coming up in Georgia. If Georgia adds a casino, they’re talking about downtown Atlanta, an MGM property there. It’s kind of in the really, early, early, early stages. So that’s where they’re looking.”
Caesars in January placed Caesars Entertainment Operating Company into Chapter 11 with the hopes of eliminating some $10 billion of debt. But recent events suggests the whole company could go into bankruptcy. Is Caesars headed in bankruptcy?
Stutz: “If the whole company is in Chapter 11 you could see break ups. They have 50 properties around the country. They could end up selling pieces off. We don’t know. It could just be a whole cavalcade of questions open up with this.”
Roger Gros: “I’ve talked to some people here in Atlantic City and they’re not doing any kind of capital reinvestment in their properties. They’re not really paying attention to the little details that a casino company really needs to do. So it’s a very hard time for them and of course when you try to value the company along with their Total Rewards program, which is the industry leading loyalty program, it’s very difficult to do.”
As gaming expands in some East Coast cities like Washington, DC and Boston, what can these cities learn from Atlantic City?
Gros: “I think there are a couple of places that are home runs. I think MGM’s property outside Washington DC is going to be a huge hit. If they can get something in Atlanta, as Howard said, the southeastern part of the U.S. is underserved but really those are the two only markets that don’t have a casino operation near them. So, I think if people looked at Atlantic City and looked at how they responded to encroaching competition, they could be better prepared for that kind of thing. Atlantic City was not prepared for it and they’re suffering the consequences right now.”
Just how bad is the market in Macau right now?
Stutz: “The market is kind of in a free fall because of the crackdown on corruption. There have been visa restrictions. The general economy in China has been bad. There are just so many different factors… A lot of this has been government related. A lot of people are wondering, ‘is the government trying to sabotage Macau?’”
Howard Stutz, gaming reporter, Las Vegas Review-Journal; Roger Gros, publisher, Global Gaming Business