MGM exec expects 2002 to be ‘banner’ year

Jan 29, 2002 9:31 AM

Announcing that Las Vegas casinos are bouncing back from the “sucker punch” delivered on Sept. 11, MGM Mirage exec Jim Murren predicts that 2002 will be a banner year for gaming.

“Las Vegas will do better as a city and we’ll do better than the industry,’’ the MGM Mirage president and CFO said at the Las Vegas Chamber of Commerce’s Preview 2002 event last week.

Filling in for Chairman Terry Lanni ”” who was away “getting revenue for the company’’ ”” Murren reported that MGM Mirage has rehired 2,300 workers and has boosted room rates back to pre-attack levels. Rates at high-profile resorts such as Bellagio are considered crucial because they set the price point for other Las Vegas properties.

“We’re expecting a very strong March,’’ Murren forecast.

With MGM Mirage’s quarterly report coming out Thursday, brokers have applauded the company’s turnaround. Robertson Stephens gaming analyst Harry Curtis reiterated his “strong buy” rating and estimated the firm will post earnings of 32 cents per share in the fourth quarter, compared to Wall Street’s consensus of 22 cents.

Even so, Murren said MGM Mirage and Nevada face a multiplicity of challenges this year and he offered pungent perspectives on a number of those issues, including:

”¡ NCAA betting ban ”” Criticizing the congressional proposal, Murren vowed to fight the pending legislation, saying “We won’t be bullied.’’

”¡ Internet gaming ”” “The industry must get its head out of the sand on this one. We need to work to make Nevada proud.’’

”¡ I-15 traffic ”” “It’s a joke on weekends.’’ He emphasized that government and industry need to improve the congested lifeline that links Las Vegas to Southern California, which accounts for 30 percent of the local gaming market.

”¡ California’s “secret initiative” ”” Murren said the industry is carefully monitoring that state’s semi-secret plan to convert 100 card clubs into Las Vegas-style casinos. Currently, card club operators and some 40 tribal casinos are vying for the right to expand gaming in the Golden State. The tribes recently got a boost when the state ruled that Indian casinos did not have to collect sales taxes on restaurant purchases.

“We will address it,’’ Murren said of the California politicking, without divulging specifics. “We don’t fear competition,’’ he added, saying he believes that gaming will continue to prosper in a sluggish economy. “The third quarter was good, even when the economy was in recession. We’re a value proposition,’’ he said ”” referring both to his company and the industry at large.