Casinos.co.uk: Casino News Archive
Sunday 18th May 2008
MGM Mirage Looking For An Ace
Even though the casino industry has shown signs of a slowdown of late and more and more of the larger developments are being postponed for the moment, it seems that MGM Mirage is going against the tide and continuing with plans to build a $8.1 billion CityCenter complex in Las Vegas (due to open towards the end of 2009).
While much can happen between now and the end of 2009, the more immediate concern is the increase in construction costs and the increase in financing expenses. Construction cost across the world have increased substantially over the last twelve months and there are many who believe that we have not yet seen the peak. Indeed it was this rise in construction costs which was part of the reason for the 30% fall in first quarter profits at the company.
We may look back on this decision to go full stream ahead and congratulate MGN Mirage for their foresight and skilled management but there are many who feel it will drag the company down. As the construction and development costs continue to rise, the company will be investing a huge sum of money into a development that will not start producing an income for at least 18 months. Can they really support such a situation at this moment in time?
Source:gambling_CMS_tmark938
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