MGM Mirage Gets Approval for Stake in British Casino

LAS VEGAS -- The King of the Strip is another step closer to opening its first United Kingdom casino, as Las Vegas-based MGM Mirage announced Friday that British regulators approved its deal to buy a quarter-share of a British casino company.

MGM Mirage executives flew to the United Kingdom for a hearing Thursday by the Gaming Board for Great Britain, and regulatory approval was granted immediately afterward, company spokeswoman Yvette Monet said.

The panel then approved MGM Mirage's purchase of a 25 percent stake in Metro Casinos Ltd., a deal announced in May. Financial terms weren't disclosed.

The gaming panel also granted Metro a certificate to own and operate a casino it is building in Bristol, England, a city of 400,000 that has three small casinos.

The British approval is particularly significant because it indicates MGM Mirage would fare well if the company develops additional casinos in the United Kingdom and faces future regulatory decisions, Monet said.

MGM Mirage announced last week its second British casino development deal, including plans to build a $255 million London casino resort. MGM Mirage, Earls Court and Olympia Group entered into a joint venture development to build a 300,000-square-foot casino complex in the Olympia Exhibition Centre in London.

UBS Warburg analyst Robin Farley noted recently that British regulatory approval could help MGM Mirage's prospects in a postderegulation race to open U.S.-style casinos.

"This could allow MGM to beat the rush if deregulation occurs," Farley wrote in a research note.

MGM Mirage Chairman Terry Lanni said in a statement that the decision pleased him.

"We see the U.K. as being a significant market in which we will be able to utilize our depth of knowledge and experience to develop large-scale gaming, leisure and entertainment complexes," Lanni said. "Although today's announcement relates to our relatively modest investment in Bristol, it nevertheless confirms our entrance into the U.K. market."

The MGM Mirage-Metro deal announced in May included plans to work together to develop additional Bristol casinos as well as a possible expansion of the Westcliff Casino, in Westcliff on Sea.

Metro is a subsidiary of R J Bown (Holdings) Ltd.

The deal is contingent on Britain deregulating its gambling industry and allowing U.S.-style casinos, MGM Mirage said. The country's current casinos are quiet, members-and-guests clubs that cannot offer casino credit and popular slot machines.

Lloyd Nathan, managing director of MGM Mirage Development, Europe, explained why the regulatory OK bodes well for the future.

"Should the proposed deregulation create an attractive environment for investment, we will be looking to own or operate a number of large-scale casino operations in the United Kingdom, each of which will require an individual license from the gaming board," Nathan said. "The fact that Metro Casinos has been granted this certificate of continuance following our acquisition of a minority stake potentially stands us in good stead for the future."