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Atlantic City Round-Up

18 February 2002

by Joe Weinert

ATLANTIC CITY -- MGM Mirage's six-year flirtation with Atlantic City is heating up again.

The Las Vegas-based gaming giant said it is accelerating design work on its proposed $1.5 billion casino hotel in the seaside New Jersey resort. MGM had applied the brakes in October, citing the need to study competitive threats in nearby states and the need to "rebuild" its business, which was hurt by the Sept. 11 fallout.

"We are going to pick up the pace on that project again because we do love that project. We're not going to get crazy with it, but some of the resources that had been directed to a lot of those other projects, we're going to pull them in and get them directed to this one," said John Redmond, chief executive of the company's MGM Grand Resorts unit.

Atlantic City is among three attractive casino projects MGM Mirage has been pursuing. One, a casino license in the Chinese coastal city of Macau, fell through earlier this month and another, a bid to buy the troubled Rosemont, Ill., casino development, is in limbo.

Redmond said his company has the financial capability to develop multiple casino projects but said its management might have been stretched.

"We've always been working on Atlantic City, but not with the same speed as in the past. We continue to be bullish. Nothing has changed in that regard. We love the marketplace," he said.

The company has no timetable for Atlantic City development, though Redmond indicated it was unlikely to open before 2006.

*****

Harrah's Atlantic City hit the jackpot in a legal dispute with the State of New Jersey.

Under an out-of-court settlement, the casino will receive $26 million for two land parcels the state took for the tunnel connector road. The state had offered half that amount.

Harrah's also gets two rent-free, double-sided billboards along the connector route for 10 years. Such boards can rent for $10,000 per month per side.

*****

Donald Trump personally received a $2.2 million incentive bonus based on the performance of his company's No. 3 casino, Trump Marina.

Under a 1993 contract between Trump and Marina, he is to receive a $1.5 million bonus of the company's earnings before interest, taxes, depreciation and interest exceeds $50 million, plus 10 percent of the cash flow over $45 million. Marina reported full-year cash flow of $52.1 million, down 1.9 percent.

Trump also receives a $1.5 million salary as the company's part-time chairman, chief executive and president.

****

Trump Taj Mahal will apparently be the first U.S. casino to offer a blackjack variation called Blackjack Switch.

The game, developed by a British entrepreneur, allows gamblers to play two hands of blackjack at once.

Gamblers, who must wager the same amount on each hand, receive four cards and have the option of "switching" the last two cards dealt to improve one or both hands before playing them out.

There are a few concessions: A blackjack pays only even money and pushes at 17, 18 and 19 result in losses instead of void wagers, as in standard blackjack.

The New Jersey Casino Control Commission approved the game. The Taj plans to offer it in late March or early April.

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