MGM-Mandalay Deal Advances

The proposed MGM Mirage acquisition of Mandalay Resort Group is one step closer to being finalized, as Nevada’s Gaming Commission OK’d a deal to consolidate control of 11 resorts on the Las Vegas Strip February 24th.

The deal is not complete, however. Gaming regulators in Illinois, New Jersey and Michigan must still approve it, as casinos in those states are part of the buyout. Executives hope to obtain those approvals by the end of March.

When finalized, the merger would create one of the world’s largest gambling companies.

The Nevada commission approved the acquisition on a 5-0 vote after a six-month investigation that raised no monopoly concerns. The Federal Trade Commission gave its blessing the week prior.

“As a result of that detailed investigation, anyone who looked at it has been persuaded that this is in the best interests of the state, unequivocally,” Gaming Commission Chairman Peter Bernhard said.

“If this merger forces other companies to provide better service to keep their customers, then that’s good for the state of Nevada.”

Gaming Control Board members had previously recommended the approval, saying they were satisfied that the deal involving 11 resorts comprising half of all employees and almost half of the 74,424 hotel rooms on the Strip won’t overwhelm other casino businesses.

Many of the world’s most famous casinos – The Mirage, Bellagio, MGM Grand, Luxor, Circus Circus and Mandalay Bay – will fall under the MGM Mirage umbrella, raking in an estimated $7.3 billion combined annually. MGM will control a total of 28 properties in five states.

“There is a lot of competition out there today,” board chair Dennis Neilander said after MGM Mirage officials discounted figures showing the combined company would control almost 43 percent of annual gross gambling revenues on the Strip.

“These are companies that spend millions of dollars to try to differentiate between each other,” Neilander said.

Financier and majority MGM Mirage stockholder Kirk Kerkorian made a rare appearance at the Gaming Control Board hearing February 22nd.

“It’s almost a repeat of mine,” the reclusive mogul said, comparing the deal to the May 2000 merger of MGM Grand and Mirage Resorts. “They match up very well.”