MGM is set to report its second-quarter results after the close, and while the company has posted three consecutive quarters of better-than-expected profit and revenue, CityCenter and its massive debt load continue to be a dark cloud looming over MGM and Murren. The question is, will Murren's non-gaming game plan do enough to quell these concerns?
"Gaming is a key component but not the only one," Murren says. "MGM is evolving. Gaming is our heritage but there's not a lot of growth there."
MGM has been taking advantage of cross-marketing in areas where it is not physically located. In May, the company struck a deal with Delaware-based Dover Downs Gaming & Entertainment to allow select members if each group's loyalty program to redeem rewards, enjoy privileges and experience the amenities at the partners' properties.
"We have no interest in acquiring new assets at this time, so instead we are partnering to share databases etc. with other facilities like restaurants and cruise lines," Murren says. "We will be more visible on this later in the year and will reveal more partnerships with an extensive network of affiliate marketing."
MGM is also throwing its efforts behind its M Life loyalty program, which rolled out in Las Vegas earlier this year, tracking spending on the casino floor. The program will launch for its non-gaming operations by the end of the year as well.
In China, where Macau is the only area gaming is legal, MGM is opening branded hotels. The company plans to roll out locations in Beijing, Sanya, Tianjin, Chengdu and Shanghai through 2014, with the first of these non-casino projects launching in September.
MGM has also signed 18 deals to develop and manage its Bellagio, MGM Grand and Skyloft brands in markets like Vietnam, Dubai and India.
"In the U.S., gaming is mature and is not going to grow as rapidly as the non-gaming side," Murren, CEO of MGM Resorts(MGM), told TheStreet in an interview. "From a development perspective, non-gaming in China and even in Las Vegas is where a lot of our capital is focused. It gives us the ability to attract more customers that have little or no interest in gaming."
Jim Murren bet big and lost on CityCenter. Now he is doubling down on the premise that growth will be away from the casino floor.
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