Inside Asian Gaming

INSIDE ASIAN GAMING | January 2013 36 Responsibility Is Its Own Rewards MGM Resorts International has long distinguished itself as a socially responsible corporation, by any measure, and Jim Murren has cemented that reputation during his tenure as chairman and CEO. This fall, CR magazine, which calls itself the “voice of the corporate responsibility profession,” named Mr Murren as one of 30 finalists for its annual “Responsible Chief Executive Officer of the Year” award, citing achievements that are familiar to many in the gaming industry. Indeed, Mr Murren has played a key role in MGM’s Diversity & Inclusion program since its inception in 2000; and has led the expansion of the company’s leadership in corporate and social responsibility to include environmental sustainability as well as community engagement and philanthropy. His leadership has helped MGM reach a variety of major social responsibility accomplishments. These include graduating more than 11,000 Diversity Champions through its Diversity Champion training workshop and increasing the overall representation of women (42%) and minorities (38%) in the diversity profile of its management team; spending a cumulative total of nearly US$3 billion with minority- owned, women-owned and disadvantaged business enterprises; contributing to a combined total of more than 500 nonprofit agencies in Nevada, Michigan and Mississippi through its corporate giving program; and donating nearly $50 million to nonprofit organizations through The MGM Resorts Foundation since its founding in 2002. At more than 18 million square feet, CityCenter is the largest LEED Gold certified development in the world, earning six LEED Gold certifications from the US Green Building Council. Additionally, MGM Resort has reduced electricity consumption by 120 million kilowatt hours per year, enough to power 10,450 homes each year, and water usage by 500 million gallons per year, enough to fill more than 750 Olympic-size swimming pools. In 2011, Newsweek magazine ranked MGM Resorts as the most “green” resort and casino company. All of those attributes served the company well in Maryland, and not just in the most obvious way. When you’re asking employees to help the cause by taking a bus ride from Detroit to the Washington D.C.-area and they exit the bus with enthusiasm, well, people only act that way when they believe in something worthwhile. Mr Murren said the Maryland effort was a process of communication and conversation with elected officials, unions, social groups, faith-based communities, economic development corporations, minority business, contractors andmarketing partners.“Along the way, what clearly emerged in the consciousness of the voters of Maryland was not that MGM is a gaming company or even a resort company, but that MGM is a collection of men and women that form a socially responsible company and have a set of core values that resonated with the people we met,”he said.“MGM does care about the environment, does care about and spend effort and time on diversity and does understand the challenges of having a small, local, minority- or women-owned business. They saw that MGM did listen to and want to be part of communities and wasn’t trying to impose its own set of values or ideas on a community but was respectful of their desires and what they wanted to see their community evolve to. “This didn’t happen overnight,”Mr Murren added.“It happened in countless meetings, in small groups and larger settings, from Redskin games to economic development meetings to minority business roundtables to tele-town halls on diversity. I saw some folks I didn’t know in our company, and those that I did know I saw in a very different light. People broke out of their traditional responsibilities, were willing to explore different opportunities; get out of their comfort zones and rally together. We had a bus from MGM Grand Detroit come on down. The enthusiasm of those 30 or 40 folks after a 10-hour bus ride coming down into National Harbor, popping off the bus…they were educated, motivated, and excited.” Other components of the resort are also doing well, according to Mr Murren. “The convention center will be fully booked in 2013; the conference center is gold-certified and has been a big selling point,” he said. “Vdara has made more money as well. It was kind of a hidden jewel as a non-gaming, non-smoking hotel. It’s a favorite of some of the techie crowd of Silicon Valley and the entertainment crowd. They find that venue to be a great oasis and it’s having a record year. Crystals had a record year as well and we expect to do better in 2013 with two or three more stores opening. It’s almost completely occupied now and that started very slow in 2010. Mandarin, which was initially unprofitable, is now profitable.” “Along the way, we have refinanced City Center, so it has no looming maturities whatsoever,” Mr Murren added. “It has very little debt relative to its equity or asset value and the leverage it does have was extended earlier this year so it’s on very, very sound financial footing.” An ex-Wall Street gaming analyst who still crunches the numbers, Mr Murren’s confidence in the overall gaming market stems in no small part from an expected rebound in home prices. “There are many economic indicators that you can look at, but the one that has shown the greatest correlation to our business is housing,” he said. “If you were to take the Case Shiller Housing index and track it to our business you’d see an extraordinarily tight correlation. As housing is improving and people’s wealth isstartingtoreturnwe’reseeingdiscretionary spending increase that extends to gaming.” Expansion Plans MGM never has taken the business approach that it needs to be in every market that allows for gaming, explained Mr Murren. “That doesn’t mean that’s a bad business strategy, just one that is best suited for others,”he said. “Our strategy has been to find markets where we can develop resorts, broadly defined as destination integrated resorts, where we can grow a market and have a dominant market share as a result of being competitive, not simply because it’s a monopoly. That’s the case in Detroit, where MGM is the market leader because we have the most luxurious property.” Mr Murren expects Detroit will show growth in 2013 and so will Mississippi, both in Tunica and at Beau Rivage in Biloxi. “Both are outstanding properties, have benefitted CityCenter Las Vegas