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- Capital markets for casino projects starting to rebound (10-5-2011)
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- High-tech meets old-school themes at G2E (10-4-2011)
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MGM Resorts International CEO Jim Murren brushed aside pessimism over the economy and shared pieces of his company’s growth strategy in a keynote address Wednesday at the Global Gaming Expo.
Murren said his company would be boosted in the years ahead with expansion in Asia, an aggressive social media program, the prospect of the approval of online poker and his theory that companies involved in gaming would begin working with those that specialize in social gaming.
“It’s very difficult to reconcile what I see in the papers and what I hear on TV and what I see in stock prices with what we see in our financial statements — where we see growth at almost every level, where we have exceeded our forecasts and those of (Wall) Street for the past two quarters,” Murren said.
About 500 attended Murren’s presentation, which included a half-hour address and 25 minutes of questions and answers with American Gaming Association President and CEO Frank Fahrenkopf.
The AGA sponsors the Global Gaming Expo at which more than 25,000 gaming industry professionals saw new products at a trade show and debated issues in more than 100 panel presentations.
The show, staged for the first time at the Sands Expo Center, ends Thursday afternoon.
Murren said there’s reason for optimism for Las Vegas because visitation numbers and gaming revenue are rebounding.
Occupancy rates and the average daily room rate are returning to healthy levels and three MGM properties — the MGM Grand, Mandalay Bay and Aria — had their best booking months in their respective histories, he said.
Murren said the city should be looking forward to the summer opening of McCarran International Airport’s Terminal 3 and that his company is working with federal government officials to expand visa waiver programs that could result in more international visitors to the United States and Las Vegas.
Addressing the crowd on his 50th birthday, Murren spent most of his presentation explaining MGM’s four-pronged approach for growth.
The company has multiple resort projects under way in Asia, including nongaming hotels in Sanya and Beijing, China, and Ho Tram, Vietnam. MGM Grand Macau is riding the explosive gaming growth of Macau, and Murren said the company will soon announce details of its plans to build a resort on the Cotai Strip.
Murren expressed regret about having to retreat from the Atlantic City market, demanded by New Jersey regulators, who found the company’s partner in Macau, Pansy Ho, unsuitable for licensing.
Under a settlement with New Jersey regulators, MGM has two years to divest its Atlantic City holdings, which are wrapped in a partnership with Boyd Gaming at the Borgata resort.
The rest of the company’s growth strategy hinges on emerging technology.
Murren said demographic shifts not only change what appeals to customers in the resorts but how the company communicates with and interacts with them. Income from non-gaming amenities have grown faster than casino revenue in the past five years.
The company is appealing to the new demographic with a revamped loyalty program, M life. Murren admitted that MGM’s previous loyalty program, Players Club, hadn’t been as effective as those of the company’s competitors.The company also beefed up its social media interaction with customers and has 962,000 Facebook friends and 214,000 followers on Twitter.
Murren commented on what has been a recurring theme for G2E 2011 — that the time has arrived for the federal government to approve the legalization of Internet poker. MGM already has experience with online poker, partnering on a free-play site in Great Britain.
“We believe that the time for talking is over and that the time for action is right now,” said Murren, who projected Internet poker would generate billions of dollars in revenue for the company, new tax revenue and thousands of jobs.
Murren also predicted that companies that participate in social gaming platforms, like Nintendo, Sony, EA and Sega, would soon find common ground with the casino gaming sector and that collaborations could jump-start new revenue streams.
In his Q&A session with Fahrenkopf, Murren said he’s pleased with the progress made by CityCenter, which is closing in on its second full year of operation.
“Are we happy with it? I’d say we’re very happy that it’s open. We’re happy that it’s on strong financial footing. We’re happy that it’s employing 10,000 people and contributing to the economy, and we’re happy that’s starting to generate a return to the investors after a long, long tough struggle,” he said.