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Few major outward changes expected from latest casino ownership changes

Sun, sand, slots

BILOXI — What would have happened if the MGM Grand’s $6.4-billion buyout of Mirage Resorts, a transaction that occurred in a surprisingly short time period, hadn’t been reported to the public? From outward signs, most customers and employees of Beau Rivage Resorts probably wouldn’t know the difference.

As with the other mergers and buyouts that have consolidated the Coast casino market, few major changes are expected as a result of the ownership change.

Jeff Dahl, 41, the new president of MGM Grand’s Beau Rivage Resorts, could be considered something of a casino executive whiz as he has in a few short years worked at most of the casinos on the Coast. He originally worked for Mirage Resorts in Nevada before being hired by Grand Casinos. He briefly returned to work at Nevada State Line during the illness of a daughter, and then returned to the Coast as general manager of Treasure Bay.

Next he worked for Palace Casino during its bankruptcy, and then became general manager of Casino Magic in Biloxi through building and opening its new luxury hotel. Next he was tapped to become president of Beau Rivage Resorts, the Coast’s largest and most upscale casino resort.

“I’ve had some wonderful learning experiences on the Coast,” Dahl said. “It was a real advantage working at the different properties. I got to experience a lot of different styles and marketing approaches. I think I’ve managed to learn something from each of those different experiences that I can put together to be helpful in growing this property, as well.”

Dahl said there will be few major changes from the new ownership of the Beau Rivage. Employee benefits will be improved, and Beau Rivage will be able to utilize the entertainment resources of MGM Grand. After the Alegria show ends Oct. 2, the showroom will be reconfigured for more flexibility for different types of entertainment.

Another positive for Beau Rivage will be MGM’s extensive marketing presence throughout the nation. “We will now be able to expose this property to a whole new group of potential guests,” Dahl said.

While under the ownership of Mirage Resorts, Beau Rivage was criticized as being a “Tiffany property in a Wal-Mart market,” a development too upscale for the average casino patron in the area. One change under the new ownership will be to make more effort towards attracting mainstream patrons.

“We are a unique property in that we can offer services to any end of the spectrum,” Dahl said. “We want everyone to feel welcome here, and we have embarked on a local friends campaign. We want to encourage locals to visit us, and will continue to grow the market looking outside the area, as well.”

Dahl said there are opportunities to the grow the market particularly with more cooperative marketing agreements with casinos and other partners for subsidizing air transportation and marketing campaigns such as the blitz in January and February in Atlanta.

“Joint ventures clearly have paid off for all of us,” Dahl said. “We had a wonderful response from the Atlanta market, and now Air Tran is opening its third flight daily out of Atlanta June 10. We’re still fighting perceptions of what we offer here on the Gulf Coast. Some people still refer to us as ‘the boats.’ That’s not what we are offering here. We have a very competitive product. We need to keep exposing the facilities and amenities we offer here to those areas we haven’t gotten full exposure to such as Atlanta, Dallas and Houston.”

Bernie Burkholder, president of the Mississippi Gaming Association and CEO of Treasure Bay Resorts, agreed that cross marketing by the larger casino companies has attracted a large number of visitors.

“Cross marketing by larger companies does provide the Gulf Coast an opportunity to have people visit who otherwise would not have,” Burkholder said. “Once people get an opportunity to visit the Gulf Coast, they are favorable impressed. They go back and tell their friends and neighbors about the experience, which bodes well for additional growth.”

Burkholder believes that the extensive consolidation seen in the Coast casino industry in the past year and a half has been healthy, and may not yet be over. The consolidation has seen several new entrants into the market place such as Park Place Entertainment, Pinnacle Entertainment and MGM Grand.

On the other hand, Burkholder wouldn’t like to see too few companies in the marketplace because then companies could become stale, lose their competitive edge, and be less flexible to react to the needs of customers.

“My opinion is that has been case in some industry sectors, but it certainly isn’t a concern at this time in the gaming sector,” he said. “If anything, the industry is as competitive as it has ever been.”

Tom Brosig, president of the Mid-South Region of Park Place Entertainment, said there were advantages to the merger of Grand Casinos and Park Place Entertainment. The company became stronger, and could take more risks in terms of major events such as championship boxing and big-name musical entertainment.

“We are able to bring more airlift in from more cities to bring more visitors to the Coast,” Brosig said. “From the perspective of workers, our benefit package improved substantially and we have the national buyer leverage of a bigger company.”

Brosig said he believes a lot of the fire power of Beau Rivage Resorts was wasted under Mirage Resorts ownership

“MGM is a better cross marketer to various levels of customer segments,” Brosig said. “The Mirage company for years has been known as a top-end casino company, and the Coast doesn’t have enough of those people. I think MGM Grand will do a better job growing the market across all segments. If will be stiffer competition to the Grand.”

He adds that competition between the casinos is healthy especially if all of the competitors are focused on growing the market rather than trying to take business away from each other.

The competition with Beau Rivage certainly hasn’t hurt the New Palace Casino, which recently opened up an 11-story, 236-room hotel on its site on Back Bay in Biloxi.

“Our imminent demise when Beau Rivage opened was greatly exaggerated,” said Keith Crosby, general manager of the New Palace Casino.

Crosby said consolidation in the Coast casino industry was predictable, and has resulted in some greater efficiencies. He said the reason why the MGM Grand/Mirage Resorts deal closed so quickly was because of the positive impact of the buyout on the balance sheet.

Crosby thinks, however, that some other major casino success stories have been overshadowed by all the attention to the MGM Grand/Mirage deal.

“The one thing that surprises me is that everyone is dazzled by the MGM buyout, and ignoring the quiet, persistent growth of the Isle of Capri,” Crosby said. “The Isle of Capri has been incredibly efficient in protecting their branding. They just continue to grow. That just strikes me as an admirable story. They’ve gone multi-regional, absorbed properties that weren’t even the same brand and converted the brand very effectively. Their growth has been very commendable, and most of their properties are in this state.”

Contact MBJ staff writer Becky Gillette at mullein@datasync.com or (228) 872-3457.


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