20 September, 2008

What happens in Vegas

"What happens in Vegas" was quite an entertaining movie. But there's something equally entertaining as the movie and that is, what REALLY is happening in Vegas. This subject has already been talked about in this blog last year.
In the last 3 days, various international media such as Forbes, CNNmoney, Bloomberg and various Casino News-sites have posted updates on the Dubai investments in Vegas.

...sourced from onlinecasinoadvisory.com
Dubai has said that, in addition to their investment in MGM Mirage directly, they will also own 50 percent of the CityCenter condo/hotel casino and resort complex currently under construction.

Dubai World was given permission to raise its stake in MGM Mirage by various state gambling regulators, allowing the financial arm of the Dubai government to purchase up to 14.75 percent of the casino giant. Dubai World currently owns 9.4 percent of MGM.
New Jersey state regulators approved the possible transaction this week, following previous acceptance of the deal by officials in Michigan and Nevada. MGM Mirage stock rose almost 20 percent in response to the news, going from a price of $33.25 a share to $38.77.
Dubai may eventually increase its ownership of MGM to 20 percent, depending on further approval by Michigan regulators, who had ok'ed the move up to 14.75 percent in April.

..from AP
Steel work has been completed for the Aria Resort & Casino, the anchor property of its massive Citycenter development on the Las Vegas Strip. With 4,000 rooms in two 61-story towers, Aria is the largest of six towers that will hold the bulk of the 19 million-sf mini-city between the Bellagio and Monte Carlo resorts, which is set to open all at once in late 2009 at a cost of more than $11 billion.
Citycenter is a 50-50 joint venture of MGM Mirage and Dubai World, a Dubai government conglomerate whose companies include Nakheel, developer of the man-made Palm and World islands off the coast of Dubai. The project’s opening is now less than 16 months away. When it was 20 months out, about half of the 2,700 residential units had been sold and the mix of buyers has been about one-third Nevada, one-third from Southern California and one third international. About 10% of sales have come from the Middle East, a percentage MGM Mirage and Dubai World hopes will grow this year now that a sales center in Dubai is up and running.

..Ok then, I guess next will be the addition of direct flights from Dubai to Las Vegas on Emirates Airlines. And after that, we should soon see the announcement of the glamorous Dubai "Double Standard"-Awards which, because of popular demand, will be awarded twice yearly. The award will also see the creation of a special quality evalutation committee which will monitor and award new benchmarks for the industry, similar to the ISO.

19 comments:

secretdubai said...

How come the government of Dubai is able to invest in gambling when its own citizens aren't even allowed to put five dirhams on the Dubai World Cup?

nzm said...

Ok then, I guess next will be the addition of direct flights from Dubai to Las Vegas on Emirates Airlines.

After that will be more instances like this when Gulf residents innocently pose with "actresses, dancer and models".

Anonymous said...

SD, who needs loose change betting dens in Dubai when you can gamble with your life's savings anytime. In case you haven't heard, it is known as offplan investing.

i*maginate said...

u don't happen to be blonde do you? red nails? loud? hang around with locals? based here and germany? lol!

Lirun said...

interesting - why are there no laws against this - isnt it worse than nudity and alcohol?

Proud Emirati said...

^^ Gambling is banned.

This is yet another proof on how the government is a hypocrite double standard entity who doesn't care about what its citizens think.

Keefieboy said...

Sheikh Zayed will be spinning in his grave.

rosh said...

I don't see what's wrong with investing in those lucrative deals? Who wouldn't? Sell once once you've made your monies. Investments like these bring about more jobs across GCC, better opportunties for many - added leverage, identity, liquidity for DP world in a global arena. Perhaps a short term necessary evil, for success in the long haul.

Lirun said...

rosh - what about investing in the drug trade or the porn industry.. is that ok too? provided you can repatriate profits and that it creates administrative positions in the UAE (btw while i find the gambling industry repulsive - i do like the gaming industry as a concept - but im asking in light of the law)

Proud Emirati said...

some people would do anything for money ....

bb said...

The government options would be severely limited if its investment had to be compliant with shariah laws. It would end up working against the growth of this country and Emirati's (Hi PE!) should realize that this investment is also about securing their post-oil future.

Buying casino might seem a little bit too obvious but guess most of the acquisition aren't much better when it comes to Islamic finance&values.

(http://www.albalagh.net/Islamic_economics/finance.shtml)


PE: And yes I say a lot of crap :)

Sheikha M. said...

Wow PE, that's pretty strong stuff coming from a National.

Do you really think the Govt. feels that way about Nationals, they don't care what you think? It seems that they do offer a lot of perks for them.

Just curious. Intersting coming from you, as you would have a diferent feeling for this than expats.

rosh said...

Lirun/PE, do you think AUH's Oil, may not light up and keep warm a Hooters outlet? or say help produce weapons in America, perhaps sold to Israel? If it's either black or white - where do you wish to draw the line? Wanna join free trade, capitalism (with a right dose of socialism), travel away from medieval ages and prosper? Well, get in the game, but hold onto your values.

I think, you can invest in a legal regulated Casino and responsibly hold onto morals.

Proud Emirati said...

no u can't

i*maginate said...

rosh, don't ask a dxb for for opinions about AD investments: rule no. infinity.

Ali Hassan said...

Rosh, you said "I don't see what's wrong with investing in those lucrative deals?"

You've gotta be kidding, right? Have you seen the stock price of MGM Mirage lately? It closed yesterday at $30.30.

And what did they pay for it? Here's a quote from International Herald Tribune dated 22-Aug-07: "Dubai World will also buy 14 million shares from MGM Mirage at a price of US$84 per share."

So Dubai World has already lost two-thirds of its investment!! Pretty disastrous deal, eh?

What makes this deal even worse is that Dubai World borrowed $4.5 billion to finance this deal at Libor + 2%. That makes this one of the most idiotic deals the folks at DW have made.

Even if the stock price comes back up to $84, the interest on the syndicated loan will result in DW never making a profit.

This ain't a lucrative deal, buddy.....it's a disaster!!

rosh said...

Ali, short note back. they've not sold the investment. surely shall have a write down/reassessment. i think dw's deal is long term. MGM's shares shall fluctuate. the deal has some fantastic opportunities into markets (china/asia) which DW otherwise not have had, as well as added synergies, am sure. i think dw's cash influx is healthier for mgm's share prices, helps reduce it's debt i.e don't have to use cash flows and credit lines to pay for construction of city center, which sort of take a load off the books.

the last time i checked dw had an excellent credit rating, owned significant share in several banks...so not sure why (or who) went with libor+2..

that said, you are correct, i shouldn't have used "lucrative"..didn't work on the deal, only read/talked about whilst dw was shopping for shares and closing. plus, i did think mgm at $84 was overpriced. doesn't look good right now. anyway, casino business swings steep, sort of like the slot machines.

Terrified of Nothing said...

There is no religion at the highest economic levels, get used to it. The largest individual supporter to Israel purchased his 747 from Saudi royalty, Sol Kerzner is a big time jew (Hi Atlantis!). Etc etc etc.

Grouping pornography and drug trafficking is ... lolarific.

PE is still PE. Me love you long time wink wink.

-ToN

Anonymous said...

not necessarily hypocritical. In fact, gambling is generally a terrible thing for the lower class, which UAE has plenty of. Just because they don't mind raping Americans of their money doesn't mean they should allow the same to happen to their citizens.

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