MGM Mirage, the casino operator controlled by billionaire Kirk Kerkorian, said auditors questioned its ability to stay in business as the company won a two-month bank reprieve to restructure its debts.
Auditors raised “substantial doubt” about MGM Mirage’s ability to continue, the largest casino owner on the Las Vegas Strip said today in a filing. The company also reported a $1.15 billion fourth-quarter loss after writing down properties because of shrinking gambling revenue.
The auditor’s comments increase the likelihood MGM Mirage will seek bankruptcy protection from creditors.
Gambling revenue slid 17 percent across all of MGM Mirage’s properties because of a 17 percent slump in Las Vegas table game betting and a 12 percent decline in slot-machine takings.
Revenue per available room, a measure of rates and occupancy known as Revpar, tumbled 21 percent at MGM Mirage’s Strip properties in the fourth quarter, as occupancy dropped to 85 percent from 93 percent a year earlier, and the company charged on average $31 a night less for rooms in Las Vegas.
Gambling revenue in Las Vegas, the biggest betting center in the U.S., fell the most on record last year and continued to tumble in January, cutting sales at MGM Mirage, the owner of 10 casino resorts in the city including the Bellagio, Luxor and MGM Grand. MGM Mirage is the biggest employer in Nevada.
MGM Mirage is not alone. Harrah's - the other major casino player in Las Vegas, and the largest casino operator in the world - is also in danger of default. Las Vegas Sands, the owner of the Venetian resort, has lost 95 percent of its stock value this year, and many construction projects in the city that never stops growing are now abandoned - waiting for more money to come available some day.
If you look at hotel rooms in Las Vegas for this summer, you will find LOTS of good deals. I found rooms at Bally's - for anyone - for 45 bucks a night. Bally's has really nice rooms, and it's in the middle of the action. There are tons of similar deals to be had!
I would hate to see any of the major casinos go under, and I don't mean to be crass, but hard times for the casinos often translate to good times for the small-time gambler. As I've already noted, hotel rooms are going for a song this summer, and casinos will go the extra mile to make sure you sit down at a table or a slot machine, too.
I remember back in 1995, I had a convention to go to in Los Angeles, and as long as I was flying all the way out west, I decided to detour to Las Vegas for a couple of days of gambling on my way out to L.A.. I remember reading in the Wall Street Journal that the Stratosphere was struggling to emerge from Chapter 11, and was pulling out all the stops to get people to visit - including cranking up the slot machines and guaranteeing a 98 percent payback on dollar slots. That means for every 100 dollars you churned through the slots, on average and over the long haul, you would receive 98 dollars back.
I decided to stay at the Strat, and within a couple of hours of arriving in town, I hit a dollar slot machine for 2500 dollars - the biggest jackpot I've ever hit - before or since!
Few places in America have taken this recession as hard as Las Vegas, because people out there bought into a dream. It's a place where even hotel maids were able to buy their own homes because of the steady tourism growth and constant need for labor. Between the mortgage crisis and the downturn in the economy, many of those homes are now in foreclosure, and many of those workers are out of jobs.
I'm going to make it my personal economic stimulus mission to contribute to the Las Vegas economy this summer, and help those folks out.
That is, unless I get LUCKY!