June 4, 2009 / 9:38 AM / 9 years ago

INTERVIEW-MGM Mirage in talks for casinos in Taiwan

* MGM talking to three investor groups for Taiwan casino bid

* Eyes opportunities in Japan and the Philippines

(Adds details throughout)

By Sui-Lee Wee

MACAU, June 4 (Reuters) - MGM Mirage (MGM.N), the world’s second-largest casino operator, said on Thursday it is in talks with three investor groups to develop a casino in Taiwan, as it looks to expand in the fast-growing Asia market.

Lloyd Nathan, president of global gaming development, declined to name the three groups for the Taiwan project, as the island paves the way for legalised casino gambling, but said all were Taiwanese and would fully fund the development with cash-strapped MGM acting as operator.

MGM, the largest Las Vegas Strip operator, was also looking at potential projects in Japan and the Philippines, with the company talking in Japan to major local conglomerates, he added.

“I have a desire to aggressively expand in Asia. It’s the most exciting gaming market in the world,” Nathan told Reuters in an interview on the sidelines of an industry conference.

“If legislation occurs that enables our business models, then we would like, without a doubt, to have more than two MGM Grands in Asia.”

MGM, whose main Asian property is a jointly owned casino in the Chinese enclave of Macau, signed a deal with Canada’s Asian Coast Development in November last year to manage MGM Grand Ho Tram, a casino resort in Vietnam.

Its move to expand in Asia comes at a time when other casino operators such as Harrah’s Entertainment [HAMLEH.UL] have also expressed similar interest in cashing in on the fast-growing market amid an uncertain U.S. economic outlook. [nHKG188101].

(For a package of the latest developments in the global gaming sector, click: [nHKG213363].

EXCITEMENT IN TAIWAN

MGM’s investment in Macau has recently become a concern, after the New Jersey Division of Gaming Enforcement asked the New Jersey Casino Control Commission to make the company “disengage itself from any business association” with its partner, Pansy Ho

—- Macau gambling tycoon Stanley Ho’s daughter. [nN19429283]. —- Macau gambling tycoon Stanley Ho’s daughter. [nN19429283].

Nathan declined to comment on the division’s recommendation.

After years of talk, Taiwan’s legislature voted to legalise gambling in January, but limited the move to several offshore islands where it is seeking to boost tourism and speed up economic development. [nSP91706].

“There’s been a lot of excitement on Taiwan ... but there are many, many, many unanswered questions,” Nathan said, adding that these issues centred around regulation and taxation structures, investment criteria and whether mainland Chinese tourists would be allowed into the casinos.

Progress has slowed down in Japan on changing legislation to allow casinos, partly due to the upcoming political elections and the public’s fears that the move could lead to social problems.

MGM — controlled by billionaire Kirk Kerkorian — has been looking very closely at Japan, Asia’s wealthiest nation, for the past two years, Nathan said.

Like its rivals Las Vegas Sands (LVS.N) and Harrah’s, MGM is struggling with a staggering debt burden and declining cashflows as consumers reduce spending amid the global economic downturn.

MGM recently sold $1.5 billion in notes and $1.15 billion in stock, in a bid to reduce its $14 billion debt load, staving off imminent bankruptcy.

Shares of MGM have more than doubled since March on easing bankruptcy fears and on hopes that a gaming sector slump has hit bottom.

(Editing by Doug Young and Jacqueline Wong)

((suilee.wee@thomsonreuters.com; +852 2843 6314; Reuters Messaging: suilee.wee.reuters.com@reuters.net))

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