MGM’s $3.4 billion gamble; A.C. Trop, Vegas Strip show promise

With concession renewal lurking around the 2020 corner, this might seem a risky time for MGM Resorts International to open a $3.4 billion casino in Macao. But MGM China CEO Grant Bowie says, “The concession renewal will not be determined by how successful we are at running casinos, it’s how successful we are at diversifying and allowing Macao to become more than just a gaming town.” Or, as boss Jim Murren put it, “We feel we’re the kind of company that the government would like to see here,” and MGM Cotai has a $13 million art collection to prove it. MGM met its self-imposed Chinese New Year deadline but not without compromise: only 23 of the gaming tables are new, not imported from MGM Grand Paradise. Also, only 500 hotel rooms are open, albeit booked solid. At peak, the resort is to have 1,390 hotel rooms available, but that’s a bit down the road. In the meantime, guests can busy themselves admiring the resort’s cutting-edge architecture.

Bowie knows the high stakes involved, telling assembled media the new megaresort was “vital in terms of the process of concession renewal.” It’s been an agonizing, five-year process, with many a setback on the way. Bowie finessed the question of a soft opening, saying, “We’ve always wanted to open when the property is ready because of the challenges we’ve endured. The biggest challenge for us was August when we had the largest typhoon come through here. It was a fairly sensitive time for us because we did sustain quite a bit of damage,” although he called the ensuing delay “not significant … because we’re here for the long term.” Whether Macanese officials feel the same remains to be seen, although we like MGM’s concession-renewal chances better than Wynn Resorts‘ ones.

* From a promising new casino, we go to one that was once on the brink of the abyss. “Employee morale was at an all-time low, customers were not happy with the facility and how it was being managed and were leaving in droves and revenues were declining on a monthly basis,” says Tropicana Atlantic City President Anthony Rodio of the mess he inherited from Columbia Sussex. “Fast-forward 10 years to where we are today, I couldn’t be prouder of what we’ve been able to accomplish over that time.” How bad were things when Rodio was brought in by Carl Icahn to reverse the Trop’s fortunes — which he has accomplished and then some? One of his first challenges was to staff up a casino-hotel that ColSux had cut to the bone, in patented fashion. According to The Associated Press, under the ColSux yoke, customers had to contend with “filthy rooms, insect infestations, hourlong waits for slot machine payouts and food and drink orders that often never arrived.”

Fast forward 10 years and even frequent Icahn antagonist Robert McDevitt of Unite-Here admits, “We had a major fight with Carl Icahn at the [Trump] Taj Mahal, but I’m not going to be a hypocrite and ignore the fact that the Tropicana is one of the best-run properties in the industry. They systematically have made it better and better.”

“Employee morale was at an all-time low, customers were not happy with the facility and how it was being managed and were leaving in droves and revenues were declining on a monthly basis,” Rodio told the wire service. “Fast-forward 10 years to where we are today, I couldn’t be prouder of what we’ve been able to accomplish over that time,” which includes being Atlantic City‘s #2 casino for revenue performance. OK, $390 million in a year is a long way back from Borgata‘s $800 million-plus but it’s nothing for which to apologize. The Trop looked to be headed in a death spiral when Rodio arrived. Not only was the hotel a mess — “I noticed as I walked across the tile floor that I almost lost my shoes, the floor was so sticky,” wrote one guest — but worker morale was subzero. Where former William J. Yung III tried to cut his way to profitability, losing his gaming license in the process, Icahn gave the Trop tender, loving care, including $200 million to fix up the old gal. Now if that can just make people forget that meth-lab problem …

* You’re already familiar with most of the Las Vegas Strip‘s coming attraction for this year, as compiled by Thrillist. The column gets ahead of itself with regard to Wynn Paradise Park, which is at least two years off but was evidently too cool not to list. One of the less-touted new attractions is Star Wars-themed Secrets of the Empire virtual-reality experience at Venelazzo. (Color us intrigued.) Something called Opium is coming to Rose.Rabbit.Lie at The Cosmopolitan of Las Vegas. Opium is a by-product of the Absinthe team so, as Thrillist says, “we’re expecting good things.” And, lastly, we see that MGM has lured Wolfgang Puck, the Ronald McDonald of fine dining, away from the Caesars Entertainment fold, at least to the extent of relocating Spago from The Forum Shops to the old Olives space at Bellagio. Sorry to see you go, Olives. We liked you.