Casino partners getting fair deal?
March 7, 2010 - 12:00 am
If Station Casinos diverted high-stakes gamblers away from a joint-venture casino to a property where it collects 100 percent of the gaming revenues, it could have industrywide consequences.
So far, the only proof offered by the Greenspun Corp., Station Casinos’ partner in the Green Valley Ranch Resort, is the questionable affidavit from the property’s former general manger, who was fired for “inappropriate conduct.”
The charges brought by Greenspun Corp. caused some to wonder whether this happens in other joint ventures. The allegations might keep other business agreements from being consummated.
“How do you put into writing, ‘Don’t steal my customers?’ ” said an insider.
Nevada regulators want to steer clear of the issue.
“It’s a business dispute, but we don’t want to see partners feuding,” Gaming Control Board Chairman Dennis Neilander said.
MGM Mirage has 50-50 joint-venture agreements to share gaming revenues in Las Vegas, Macau and Atlantic City.
The MGM Grand Macau and Atlantic City’s Borgata are irrelevant to the issue. Neither MGM Mirage nor partner Pansy Ho have other casinos in Macau.
In Atlantic City, Boyd Gaming Corp. manages the Borgata and sends 50 percent of the profits to landlord MGM Mirage. MGM Mirage doesn’t have a Boardwalk casino. Boyd’s nearest casinos are in the South and Midwest.
If a Borgata customer comes to Las Vegas, Boyd Gaming prefers that the player land at one of MGM Mirage’s 10 Strip resorts. Company Chief Executive Officer Keith Smith knows that’s not always the case.
“It’s really the customer who often makes the choice,” Smith said.
Any competition for players became moot when Boyd Gaming shelved its $4.8 billion Echelon project. Still, to avoid conflict, Borgata has its own customer database and casino tracking system, separate from slot clubs offered by either company.
Some analysts quietly raised concerns about MGM Mirage’s joint venture with Dubai World in Aria, the crown jewel of CityCenter.
Through the joint venture, the Persian Gulf emirate’s investment arm earns 50 percent of Aria’s gaming revenues. If a customer plays a few hundred yards away at Bellagio, all casino revenues go to MGM Mirage. Dubai World would get zilch.
MGM Mirage spokesman Alan Feldman sees the issue. But the company’s goal, he said, is to keep players “within the family.”
In other words, gamble at Aria or Bellagio. Stay away from The Venetian or Wynn Las Vegas.
“If a customer wants to go to more than one place, that’s fine. We just want to make sure we own all the places they want to go,” Feldman said.
Howard Stutz’s Inside Gaming column appears Sundays. He can be reached at firstname.lastname@example.org or 702-477-3871. He blogs at lvrj.com/blogs/stutz.