MGM Mirage seeks to expand in Macau

By Deena Beasley

LOS ANGELES (Reuters) - MGM Mirage Inc. (MGM.N) plans a second Macau casino resort and may pursue additional projects in the Chinese gambling enclave, Chief Executive Terry Lanni said on Tuesday at the Reuters Hotels and Casinos Summit 2007.

The CEO also said MGM's board had approved plans to study a mixed-use casino resort in Atlantic City, New Jersey, and MGM could be interested in developing destination resorts in Japan if that country passes pro-casino legislation.

MGM plans to open its first Macau property -- an MGM Grand casino -- in the fourth quarter on a 10.5-acre piece of land where most of the casinos in Macau are located. The second site announced on Tuesday is slightly larger and is in the Cotai Strip area, where Las Vegas Sands (LVS.N) and others are building a Las Vegas-style strip.

Both the new Macau projects are owned by MGM Grand Paradise, a joint venture between MGM and Pansy Ho Chiu-king, who is also managing director of Shun Tak Holdings Ltd. (0242.HK), a Hong Kong conglomerate involved in shipping, property, hotels and investments.

"I don't think we should stop at two ... I think there will be further opportunities," Lanni said of Macau. MGM Grand Paradise said it has been engaged in discussions with the Macau government regarding the project and intends to submit plans for it later this year.

The 50-50 joint venture is building its first casino resort, the MGM Grand Macau, on a waterfront site on the Macau peninsula at a cost of about $1.1 billion. That resort is slated to have about 600 rooms, suites and villas, 345 table games and 1,035 slot machines. It is set to open by the end of this year.

The joint venture did not give any details when the second development might open.

Lanni said Nevada and New Jersey gambling regulators, which have yet to approve the partnership with Pansy Ho, will hold hearings on the issue in February and March.

"Ultimately, we expect the approval to be granted and believe MGM will be a strong competitor in Macau," CIBC World Markets analyst David Katz said in a research note on Tuesday.

Chinese gambling revenue in Macau has already topped that of the Las Vegas Strip and is expected to keep growing over the next few years. Wall Street is forecasting Macau casino revenue, which hit $7 billion in 2006, to grow to anywhere from $10 billion to $15 billion by 2010.

U.S. casino operators Wynn Resorts Ltd. (WYNN.O) and Las Vegas Sands already have casinos open in Macau. Las Vegas Sands is set to open another casino, a "Venetian" resort, there later this year.

ATLANTIC CITY CASINO RESORT

Lanni said the board of Las Vegas-based MGM Mirage has approved a project to design a mixed-use casino resort in Atlantic City where MGM now operates the Borgata casino hotel in a joint venture with Boyd Gaming (BYD.N).

The project is in the early stages of development with its size, scope and placement yet to be determined, but components could include residential units, an arena, a non-casino hotel as well as a casino hotel and a significant amount of retail space, he said.

Final plans will take about a year, while regulatory approval would take another year after that, meaning construction in Atlantic City would begin as early as the first part of 2009, Lanni said.