Dubai Casino Opens in Vegas Despite Debt

The world may have been reeling from the news that some of Dubai’s strongest financial institutions could not pay their debts, but this did not halt or slow down the opening of the Vegas CityCenter. The complex opened in December and is jointly owned by Dubai World and the MGM Mirage.

The CityCenter has some hailing it and some cursing it. The resort has 4,004 rooms and a new casino that many say will attract the tourists back to the city. Others, however say that the CityCenter is just introducing a glut of rooms to an already over saturated market and will just further drive down the value of rooms in the area. It is a large hotel and with it opening means that there is a 4% increase in the number of room available in Vegas, which is a big increase to happen overnight!

The CityCenter has cost a whopping $8.5 billion dollars to build and for many it is a bit of a last grasp at pulling the market back up for the ailing region. It certainly is a big bet, a big bet for Vegas and a big bet for Dubai. The recession has seen a drop in the number of visitors to the city as people have opted not to take a holiday or to avoid gambling as a means to conserve their cash. This has meant big trouble in sin city as many casino companies did not foresee the coming recession.

Dubai hit the news at the end of last year when it announced a $60 billion debt. Dubai World said it would seek a six-month delay in paying creditors on the nearly $60 billion that it owes. The emirate racked up the debt during its own real estate bubble that burst because of the global recession. The CityCenter project cost $8.5 billion to build, but has been valued at a mere $4.88 billion by external evaluators. This is definitely a gamble a lot of people will be hoping pays off. 

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