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Beau Rivage Owners Salvage Investment

5 August 2000

BILOXI, Mississippi — Aug. 5, 2000 -- As reported by the Associated Press: "Beau Rivage, the grand, $700 million experiment on Biloxi beach, is finally starting to pay off.

"The upscale, 1,800-room hotel and casino generated a tidy $18 million profit for parent company MGM Mirage during the three months ending in June, quite a jump from the $11.5 million the posh place made during the same period last year.

"But don't look for a casino company to build another resort on the coast anywhere near the magnitude of the Biloxi palace fashioned by former Mirage Resorts Chairman Steve Wynn and his one-time chief executive Barry Shier.

"…Industry analysts contend the level of future investment on the coast will probably not exceed $400 million. However, President Casinos steadfastly maintains there is room in the market for its concept of a $2.1 billion cluster of casinos and 13,000 hotel rooms.

"…Criticism from Wall Street and diminished returns from Beau Rivage drove the price of Mirage Resorts stock into the proverbial toilet and resulted in the company's eventual takeover by billionaire Kirk Kerkorian, majority shareholder in MGM Grand. The merged company, MGM Mirage, is more focused on the bottom line.

"…The resort suffered from overstaffing, the lack of a trained and experienced work force and other operational inefficiencies not unusual when operating a new hotel, particularly one with nearly 1,800 rooms.

"Meanwhile, the dramatic increase in hotel and casino capacity fueled what one industry analyst called a marketing "blood bath" that diminished profit margins and discouraged Wall Street investment.

"…Eventually, analysts believe the market will gradually absorb the flood of hotel and casino capacity generated by Beau Rivage and the opening six months later of Grand Casino Gulfport's 600-room Oasis Hotel and Spa.

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