Jim Murren, the Chairman and CEO of MGM Resorts International, said he does not expect to build any more casinos in Las Vegas during his time with the Strip's biggest gaming company. With Bellagio, Mandalay Bay, The Mirage, CityCenter, and MGM Grand as a Las Vegas Strip properties for his company, Murren sees no reason to build an resort in town.
That was Jim Murren's logic in a recent interview with the Las Vegas Review-Journal. He spent 7 years as the company's CEO, but was with the company as the Chief Financial Officer for more than a decade prior to that. During his time with the company, Murren has seen it build Mandalay Resort Group, Mirage Resorts, and Aria, centerpiece of the CityCenter. That seems to be enough.
Doesn't See the Need
Jim Murren told the paper, "It's not my expectation during my career here that we will build another casino resort in Las Vegas. I don’t see the value proposition, the need and the business case that could be made."
The pronouncement does not mean MGM Resorts is going to be a less active developer on the Las Vegas Strip. The gaming company continues to be one of the most active local developers when it comes to non-gaming opportunities: restaurants, retail outlets, outdoor festival grounds, and other concert venues. In many ways, that is the present of the Las Vegas Strip, as well as the future. At present, 60% of the revenue on the Las Vegas Strip is generated through non-gaming enterprises.
Retail and Dining District at The Park
At present, the biggest project in that direct is the coming centerpiece to the Park, an outdoor retail and dining district between Monte Carlo and New York-New York. The company is building a $350 million, 20,000-seat sports and entertainment arena in the Park. The complex, which is being built in conjunction with arena developer AEG, will be located beyhind New York-New York.
Murren described his company's strategy in building venues which might help competitors, but also helps the city in general. He said, "We're developing the type of environments that will make our buildings more popular and profitable. Everything we're doing is geared not toward the expansion of the room count or the casino floor, but the expansion of entertainment and visitation to Las Vegas."
"We believe that we will get the lion's share of that benefit."
41 Million People Visited in 2014
He said that the casinos are still a big attraction, but they are no longer the main reason a record 41 million visited the Las Vegas Strip in 2014. These days, the way to attract more people is to build more restaurants and retail outlets, or add better shows. Murren said most of the people who come still stay around to gamble a while at the gaming tables or try their hand at a progressive jackpot on the slot machines. It's just gambling isn't the main attraction anymore.
Even if a new casino won't be built anytime soon, that does not mean James Murren has no plans to improve and update the existing casino resorts he controls. Murren is planning a $66 million, 350,000-square-foot expansion for the Mandalay Bay Convention Center. Once complete, Mandalay Bay is going to have over 2 million square feet of space.
$5 Billion in Gaming Developments Elsewhere
MGM Resorts International is not entirely out of the casino-building business. The gaming company is branching out into other states and countries with its developments. MGM Resorts plans to open a $2.9 billion hotel-casino on Macau's Cotai Strip in 2016. Meanwhile, it is planning a $800 million project in Springfield, Massassachusetts, while it's developing a $1.25 billion integrated casino-resort in National Harbor, Maryland.
That represents $5 billion invested in casino developments at the moment. Just because the Las Vegas Strip is no longer oriented towards gambling alone, does not mean that other nationalities view the matter the same way. Even here in the states, lawmakers and local residents alike want to be able to gamble without taking a cross-country trip. The Internet has gotten people used to gambling conveniently and locally. Thus, casino gambling in America is becoming fractured and localized, just as so many other industries are consolidating.
MGM Resorts' Tactical Approach
Murren says MGM Resorts International has a more tactical approach to its developments these days. What he means is the gambling industry has evolved in many ways. Building casinos on the Strip does less for the company that building them on Main Street of Anytown, USA. The competition is not as fierce beyond the Las Vegas Strip, so it simply makes more sense to build somewhere else in the American landscape.
