Stay informed with the
NEW Casino City Times newsletter!
LAS VEGAs, Nevada -- Any interruption to business at the Monte Carlo shouldn't affect the bottom line of gaming giant MGM Mirage, analysts said Friday after a rooftop fire shut down the Strip resort.
Gaming Control Board sources thought it would be at least two or three days before the casino portion of the 3,000-room hotel-casino could reopen. Clark County fire and building inspectors will need to examine the facility before it reopens.
Gaming analysts said the Monte Carlo accounts for between 4 percent and 5 percent of MGM Mirage's annual cash flow, which the company describes as earnings before interest, taxes, depreciation and amortization. Through the first nine months of 2007, MGM Mirage had reported cash flow of more than $2 billion companywide, of which $1.5 billion came from the company's 10 Strip hotel-casinos.
"(The Monte Carlo) is not a major part of the MGM Mirage picture, but it's an asset that's positioned to do well in the long term," said Joel Simkins, gaming analyst for Macquarie Securities, who watched television news coverage of the fire from his New York City office.
Analysts said most of the major casino companies have business interruption insurance to cover lost revenue from an incident such as a fire. Business interruption insurance kicked in for the gaming operators that lost casinos on the Mississippi Gulf Coast in August 2005 as a result of Hurricane Katrina.
"A lot of the companies tightened their insurance after 9/11 and Katrina," Simkins said. "MGM Mirage probably isn't facing a prolonged impact."
Deutsche Bank gaming analyst Bill Lerner said MGM Mirage has enough hotel and casino inventory on the Strip to offset any business disruption at the Monte Carlo.
"It's an unfortunate event, but it shouldn't be an impact financially," Lerner said.
The Monte Carlo's 102,000-square-foot casino, which has 1,600 slot machines and 63 table games, was shut down as part of the evacuation. Nevada gaming regulators were notified of the closure and state gaming agents will assist in the reopening.
"There are several different procedures and controls that are undertaken to secure the chip racks and lock down the casino cage," said Gaming Control Board member Mark Clayton. "An internal audit function will take place before reopening."
Clayton said the agency was notified three times by Monte Carlo officials during the incident: when fire first broke out, when the hotel was evacuated and when the casino was shut down.
The Monte Carlo, which opened in June 1996 at a cost of $344 million, was modeled after the Place du Casino in Monte Carlo.
It was built as a joint venture between, initially, Mirage Resorts and Gold Strike Resorts. Circus Circus Enterprises, which was renamed the Mandalay Resort Group in 1999, acquired Gold Strike in March 1995 while the Monte Carlo was under construction. MGM Mirage acquired the hotel-casino through its separate buyouts of Mirage in 2000 and Mandalay in 2005. Circus Circus/Mandalay was the operating partner until MGM Mirage took control of the resort.
MGM Mirage renovated portions of the resort last year.
In December, The Light Group opened Diablo's Cantina, which includes a 13,000-square-foot Mexican-themed restaurant and nightclub that overlooks the Strip.
The Monte Carlo is adjacent to MGM Mirage's $7.8 billion CityCenter development, which is under construction. A planned monorail link will connect the resort to CityCenter and Bellagio to the north.
Copyright GamingWire. All rights reserved.