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Best of Liz Benston

Gaming Guru

Liz Benston

Looking in on: Gaming

5 November 2007

Developer Triple Five, best known for its Mall of America near Minneapolis and the world's largest mall in Edmonton, Alberta, Canada, has plunked down $180 million for a piece of the Strip that was home to the historic La Concha Motel.

It's a hefty sum to pay for less than six acres, considering the space demands of Triple Five's megamalls and even of the smaller strip malls the company owns in town. That's the cost these days on the Strip , where Elad Group recently paid $1.2 billion for the land underneath the soon-to-be-razed New Frontier .

But Triple Five, controlled by the wealthy Ghermezian family, could hang on to the land for years , waiting to sell it for a profit. Or it could acquire neighboring parcels to build a shopping mall with hotel units or condos.

That's a likelier scenario than a casino, Strip observers say.

Triple Five is a private company that shuns publicity, so it probably won't go through the time-consuming and invasive process of seeking a gaming license.

One of its former executives has been linked to disgraced former County Commissioner Erin Kenny, who's in prison for taking bribes from strip club owner Michael Galardi. Kenny testified that a Triple Five executive paid her $3,000 a month after she voted in favor of a casino Triple Five sought to build in the Spring Valley neighborhood. A state panel rejected the casino , which residents opposed .

Triple Five denied bribing Kenny, and executive Don Davidson was acquitted of those charges. Davidson was convicted this year of trying to bribe former Las Vegas Councilman Michael McDonald, but that matter didn't involve Triple Five.

The company, which once owned 9.5 percent of the Riviera's parent company, on Wednesday disclosed the sale of its shares in the Riviera, which is north of the La Concha site.

Separately, Las Vegas has given Triple Five conceptual approval for the Great Mall of Las Vegas, a 1.6 million -square-foot mall with 900 condominiums, office space and a movie theater near U.S. 95 and the Las Vegas Beltway. But the company hasn't received building permits.

• • •

Strip giant MGM Mirage will spend close to $800 million this year on resort upgrades including room remodeling, restaurants and nightclubs. Executives say the return on investment so far has been impressive. In the third quarter, food and beverage revenue rose 10 percent, entertainment revenue rose 13 percent and hotel revenue rose 7 percent despite remodeling at Mandalay Bay and the Bellagio that caused the loss of revenue equivalent to 29,000 room nights.

These nongaming increases helped offset a 3 percent decline in gaming revenue, not counting the company's newly reopened Beau Rivage property in Mississippi.

Executives blamed the decline on baccarat players who got lucky and on the lack of a permanent baccarat room at the Bellagio, which now offers the game in a temporary room.

• • •

Some analysts have wondered whether Wynn Resorts, which reported a 14 percent increase in casino revenue in the third quarter, is stealing market share from MGM Mirage with help from its Macau resort, which is attracting legions of Chinese gamblers, some to the Strip.

One hint is the companies' "hold percentage" - the percentage of bets kept by the casino. Baccarat, preferred by Asian high-rollers, has one of the highest hold s of casino games. Wynn's table game hold percentage has ranged from 24 percent to 28 percent since it opened in Macau, while MGM Mirage's has hovered around 20 percent .

MGM Mirage is anticipating a bump in gambling action when it opens its MGM Grand resort in Macau next month.

"We continue to believe our high -end results will improve once we open MGM Grand Macau," Chief Executive Terry Lanni told investors last week . "We have operated at a distinct disadvantage to Venetian and Wynn. They are meeting people we don't know - but that's all going to change by the end of this year."

Wynn executives say Wynn Las Vegas' gambling business has grown without much help from Macau.

"The high end is doing very well here," Wynn Resorts President Ron Kramer said. "Over time, having access to the Macau market will benefit Las Vegas, but I don't think cross -marketing has really begun."

Looking in on: Gaming is republished from