MGM Resorts International's intentions with regard to Circus Circus have long been ambiguous. When the late (1943-2011) Terrence Lanni was CEO, he observed that it underutilized its considerable acreage, with much of it covered in low-rise motel units and an RV park. Part of the latter has been scrapped to make room for the $10 million Las Vegas Festival Grounds, which hasn't been the highest or best use of the space, either, but it gives MGM a useful, event-oriented placeholder until the north Strip recovers sufficiently to warrant resort development. When in use, it also spins off some business to Circus Circus, one of the two closest casinos to the venue (the other being SLS Las Vegas).
When current CEO Jim Murren took over from Lanni, he made it clear in the Las Vegas Sun that Circus Circus wasn't going anywhere: His kids loved it too much. "It won't be imploded in my lifetime, and I plan to live a long time," he said, adding, "We may tear pieces of it down and rebuild, but as a property, it will be around forever." Although Circus Circus' cash-flow contribution to the company has shrunk from a 2006 stream of $80 million to a present-day $30 million, the property has a large and loyal following among the Hispanic community, according to the Las Vegas Review-Journal. "It turns out that the family orientation, which is a Circus Circus hallmark, is a major component to attracting the Hispanic market," Murren told the paper. The casino-hotel also continues to win accolades for its steakhouse, routinely lauded as one of the best on the Strip, and once a year becomes Halloween Central when the Adventuredome transforms into the altogether-more-hair-raising Frightdome attraction, which continues to up the ante year on year.
The company isn't just resting on these laurels. It's been conducting focus groups on how to increase Circus Circus' appeal and recently added the El Loco roller coaster to Adventuredome, heightening its thrill quotient. MGM is also ramping up the marketing of Circus Circus, targeting the Arizona, New Mexico, and Southern California markets. However, as you mention, the casino has the eccentricity of a one-off players' club, Circus Players Club, which is property-specific anomaly for the company in this town and means that points accrued at Circus Circus can't be redeemed at other MGM casinos -- and vice versa. However, the clown house did get a substantial infusion of database-marketing clout when, as part of the price for establishing his Hyde nightclub at the Bellagio, then-Sahara owner Sam Nazarian turned over his customer list to Circus Circus for its future betterment (although how much appeal the old tent has for Nazarian's typical clientele of rock stars and the L.A. party set, is another question).
Making a "for" case regarding a Circus Circus sale is the VegasTripping blog, which observed that it "will require capital investment to modernize the place or it remains a grind joint." Also, when MGM recently spun off most of its assets into a real estate investment trust (REIT), notable was the exclusion of Bellagio, the Mirage, and Circus Circus. The first two are the company's highest cash-flow generators (and all three have low property-tax rates, unlike the spinoffs) but Circus' inclusion is a bit of puzzle, prompting speculation about its long-term fate. While noting that the "north end will not be an easy and fast recovery. It will be a slow and steady one," Murren elaborated, "We are taking the point of view that Circus Circus has a significant and iconic role in the renaissance that we hoped to see 10 years ago on the north Strip."
That being said, the CEO can afford to sit back and wait: His company is holding – thanks to Circus Circus – 91 acres of mostly underdeveloped land at the north end of Las Vegas Boulevard, an asset of which nobody else can boast. Circus Circus, like Excalibur, also gives the company a firm foothold in the bargain niche, just as it has distinct middle-class (the Mirage) and high-end (Bellagio) presences on the Strip, to name but two. As Murren asked the Sun, "Who is going to be competing with Circus Circus and Excalibur if the competition is going to be torn down? We see a huge upside by improving them while their competitive set is shrinking and demand is not. The number of casinos catering to that market will dramatically decline over the next few years," Murren said. "In the next five to 10 years [2006-2016] Circus Circus will effectively have that market to itself." He's also floated the idea of a Circus Circus renovation, saying it was a question of "when," not "if." (It still is.)
Even in mid-2009, when things on the Strip were at their bleakest and MGM Resorts had sold Treasure Island to Phil Ruffin so it could complete CityCenter, Murren said that the likelihood of additional asset sales was "worse than 50-50." Few believed him, but he kept his word. While Murren has not been as unequivocal about the clown casino as he has regarding the Mirage, which he says is "not on the market," he is, at worst, hoarding Circus Circus and its vast acreage as valuable chip, to be played at just the right moment. And, with Strip land values still low and north-Strip projects struggling to attract financing, now is not that moment.
