MGM ‘monopoly’ passes FTC ‘go’

Jan 11, 2005 5:39 AM

It appears that the issue of MGM Mirage gaining a room monopoly on the Strip through its merger with Mandalay Resorts is no longer an issue.

Insiders say the question has been handled to the satisfaction of the Federal Trade Commission to the point that their approval of the deal is imminent.

Once the FTC approves MGM Mirage’s acquisition of the Mandalay Resort Group, it is on to hearings before Nevada gaming regulators, possibly by February.

Sources in a position to know speculated approval might have come before the end of 2004, but they now say the "holiday slowdown" got in the way.

So how did the Federal Trade Commission get past the argument that this deal will put about half of the Las Vegas Strip’s hotel rooms in the hands of one company?

"Very easy," an insider says. "While the argument about MGM having close to half of the rooms may hold true for the moment, that share will diminish as we move into 2005 and beyond.

"Think about it," the source continued. "Steve Wynn will open his place in April. That’s more than 2,500 rooms."

Moreover, Wynn previously said he expects to have as many as 20,000 rooms on his roughly 200 acres by the time his property is fully developed.

And Sheldon Adelson is adding to what he has (at The Venetian and on adjacent property).

The point is that room count is a dynamic figure. Other ’05 additions will include rooms at the Palms, whatever Boyd Gaming decides to do at the Stardust and the thousand or so rooms that will be part of the South Coast opening late this year.

There’s also Frontier owner Phil Ruffin’s hopes for using his 40-50 acres to create a 4,000-room resort, even as Donald "You’re Fired" Trump fires up his long awaited plans for going into business on the Strip.

Trop gets a reprieve?

Although officials with Tropicana owner Aztar Corp. aren’t talking, there are signs that the venerable Strip resort is not yet ready for the wrecking ball.

The 48-year-old south Strip resort is now booking business into June.

Remember that the company’s last official word about its future in Las Vegas was to have been made in March. Options include renovation, sale or demolition and building a new resort.

But a senior industry source familiar with thinking at the company says, "It is now less likely than ever that there will be significant expansion in Las Vegas by the current owners.

Of course, things could change, but with longtime Chairman Paul Rubeli scheduled to retire at the end of March, there hasn’t been a whisper from the company about its Las Vegas plans.

All this should generate more than the usual interest in the company’s first quarter conference call, since this report should also include updated information on the apparently successful opening of the company’s big new Atlantic City addition known as The Quarter.

Terror on the mind

Post 9/11 fears have changed the way people respond to relatively inconsequential events ”¦ such as power outages.

That’s why the New Year’s Eve outage at the Palms, Rio and Orleans produced far more trauma among guests and executives than was reported in the local news media.

Has there been an act of terrorism? This was the gist of the first calls from frightened guests in rooms, hallways, elevators and stairwells as a transformer near this cluster of hotels blew.

A mid-level manager who spoke only with the promise of anonymity said he was surprised at the number of children who had been left in rooms by parents who went off to party.