Casino News Today

As Las Vegas and its casino industry continue to be victimized by the Great Recession, travelers are reaping a jackpot of bargains.Visits are running about 7 percent behind last year, and MGM Mirage - the company that owns the Bellagio, Mirage, MGM Grand, and several other Vegas resorts - recently announced that its average room rate for the second quarter dropped to $111, down $45 per room from the same period last year. Other big casino companies also reported falling rates.

That may be good news for folks who can afford to travel, but it’s old news on the Strip.

What is new are some strategies that casinos are trying to ease their losing streak, including giving average customers a taste of high-roller living and turning to text messages, Facebook, and Twitter to fill their massive hotels.

MGM Grand, a behemoth resort with nearly 5,000 rooms, has rolled out a program called Prima that rewards guests who commit to spending $500 during their stay. That money can be used for dining, shows and drinks (but not for the room itself or for gambling). In return, customers receive a long list of goodies, including an upgrade to a suite; upgraded tickets to Cirque du Soleil’s KÀ; VIP access to the casino’s nightclubs, Studio 54 and Tabu; two-for-one entrees at fine-dining restaurants; a limo ride to and from any MGM Mirage resort; free admission to the fitness center and the exclusive swimming area, Wet Republic; and no-wait passes for taxi and buffet lines.

In other words, you get treated like a high-roller for an upfront payment of $500 at the MGM Grand - money that you probably would spend anyway. The Prima program is scheduled to run through Dec. 29, and a recent check of room rates showed many available nights in the $55-$100 range.

“These types of promotions we’re seeing now are giving people an opportunity to experience Las Vegas in a way they normally would not,” says Saverio Scheri, managing director for WhiteSand Consulting, a company that advises casinos in the United States and abroad.

Creative packaging is becoming crucial to drawing customers, Scheri says, because ultra-high-end casinos can clobber the competition by marking down room rates so they are slightly higher than lesser-regarded resorts.

“If a great place like the Wynn Las Vegas is charging $159, and that’s only $20 or $30 more than another hotel, people will pay that extra money for the experience,” Scheri says of Steve Wynn resort.

New York New York and Monte Carlo, both MGM Mirage hotels, have been offering rooms around $55 in a promotion that ends in mid-September and includes two-for-one deals on drinks and some meals, plus hefty discounts on shows. The Golden Nugget, considered the class of downtown Vegas, has been advertising rooms for $49 midweek and $89 on weekends and throwing in a $25 food-and-beverage credit and two-for-one show tickets.

Some offers are simply startling. Planet Hollywood is offering a free bottle of liquor for each night’s stay at the hotel.

Then there are the resorts that are turning to social networking and cell-phone text messaging to attract customers.

At the Rio All-Suite Hotel & Casino, Bally’s and Paris, guests can choose to receive daily texts about specials on drinks, dining, and entertainment.

And the MGM Grand is using Twitter and Facebook. A guest who becomes an MGM Grand Facebook “fan” gets access to Facebook-only specials, such as free admission to Wet Republic and a casino nightclub, plus a $25 activity credit. On Twitter, the casino will be posting short-term specials every Thursday that followers can receive on their cell phones or PDAs.

MGM Grand’s fan count has grown to more than 26,000 since the casino hotel made its Facebook debut in May, says MGM Grand marketing executive Michael Perhaes. He expects the number to reach 100,000 by the end of the year.

“Both Facebook and Twitter are potentially much more effective and actionable than e-mail,” Perhaes says, which means more room reservations and show-ticket sales.

As the digital communities grow, customers recommend restaurants, shows, and attractions to one another, Perhaes says. And he expects that when short-term specials are announced on Twitter - a discounted room rate with a 12-hour purchase window, for example - those notices will get copied to dozens of individual Web sites.

“You’re much more likely to take the advice of a family member or friend,” Perhaes says.

However the word gets out, Vegas deals look to be around for a while.

At Treasure Island, the casino is advertising a $25 ticket to Mystere, another Cirque du Soleil show, with the purchase of a full-price ticket. Mandalay Bay has a room package running through Sept. 4 (subject to availability) that includes unlimited access to a buffet. Green Valley Ranch in Henderson has a two-night midweek special on its Web site for as low as $200 that includes a $100 credit on spa treatments (based on two treatments) and a $50 dining credit.

“Usually, you do get better deals in Vegas during the summer than in the fall,” says Scheri, the casino consultant. “But I think we’re going to continue to see these deals in place for some time to come. This is not going to be an overnight recovery.”

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ATLANTIC CITY, N.J. - The FBI and New Jersey State Police say they have arrested a man they believe is the “Commuter Bandit” wanted for robbing 17 banks in Philadelphia and New York.

Thirty-nine-year-old Anthony Boyd of Queens, N.Y., was arrested Wednesday night at the Borgata Hotel, Casino & Spa in Atlantic City. Authorities say Boyd escaped from a Bronx halfway house in December. He was finishing a 10-year sentence for bank robbery.

Boyd’s last suspected bank job occurred Tuesday in Manhattan. The FBI says law enforcement officials received a tip after surveillance video was broadcast on television Wednesday and tracked Boyd to the Borgata.

He had an initial court appearance in Camden on Thursday and is being held in a federal detention facility in Philadelphia. It was not known if he had retained an attorney.

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The news sent MGM (MGM:

MGM Mirage

MGM 2.59, -0.50, -16.2%) shares tumbling 14% in morning trading Friday.

CityCenter, a 67-acre site consisting of hotel-condominiums, a casino and a 500,000-square-foot shopping center, has hired law firm Dewey & LeBoeuf to prepare for a potential bankruptcy filing, according to the New York Times, citing unidentified people briefed on the matter.

The Times reported that MGM Mirage and Dubai World will likely fail to make a $220 million debt payment due Friday, leading to the project’s possible bankruptcy filing within days.

MGM’s bonds are rated below investment grade and have traded at a deep discount to their par value due to fears that it will default or file for bankruptcy. The price of the 5.875% coupon due in 2014 fell Friday to 34 cents on the dollar from 37 cents, according to junk-bond specialist KDP Investment Advisors.

The price reached a low of 30 cents at the beginning of the month, half of what the bond were worth at the beginning of the year.

Dubai World has signaled it won’t provide its half of Friday’s payment, while MGM Mirage struggles to persuade its unwilling lenders to help it finance the project alone, The Wall Street Journal reported. The casino company faces a cash crunch as it tries to meet obligations on more than $13 billion in debt. It narrowly averted defaulting on loans last week and warned that it could default by mid-May, the Journal reported.

Missing the payment Friday could halt work on the project within days, idling 8,500 construction jobs, the Journal said, citing a person familiar with the situation. A delayed opening could also affect 12,000 workers who are to staff the complex, the paper said.

CityCenter, once touted as the largest privately funded development in history, was slated to open later this year after several reductions in its planned scale and scope. MGM has been scrambling to find the money to finish the job, recently using up its last available credit facility and selling off its Treasure Island casino hotel at the heart of the Las Vegas Strip.

Dubai World, saying it’s significantly concerned about MGM Mirage’s survival, sued the gambling giant Monday, charging a breach of contract over the massive CityCenter joint venture, after MGM said in a disclosure that “there’s substantial doubt about our ability to continue as a going concern.”

MGM Mirage sold half its interest in CityCenter to Dubai World, the investment arm of the United Arab Emirates government, in late 2007. At the time, Las Vegas was booming. Under terms of that deal, Dubai World also began acquiring shares of MGM Mirage and currently owns about 9.4% of it.

But the global economic crisis has since had a deep impact on Sin City’s fortunes, with visitor and spending rates dropping by double digits. That has squeezed the once-robust cash flows of casino operators and left them vulnerable to the risk of default on various debt loads used to fund rapid expansion.

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