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Over the past decade or so, Dubai has placed big bets on its ability to become the world's top tourist destination. Now Dubai is taking its plans to sin city itself, Las Vegas. Dubai World, which is the investment holding firm of the Dubai government, has decided to invest $5 billion in MGM Mirage (NYSE: MGM) for a 9.5% stake.In addition, Dubai World will also be getting a 50% interest in the yet to be finished CityCenter development project.
The country, which became wealthy from oil exploration in the latter part of last century, has been building like crazy over the past 10 to 15 years. It is attempting to create a tourist destination to help keep the money flowing once the oil runs dry. The country has been creating some pretty impressive credentials such as The Palm Islands and The World.Dubai's plan is a major undertaking, designed with one idea in mind -- preventing the country from having to go back to its ancient roots of being a simple fishing country once the wells run dry (expected to happen around the year 2015).
What is interesting about the move to Las Vegas is the fact that gambling is prohibited by Muslim law, and hence prohibited in the U.A.E. and Gulf states. Yet, according to Dubai World Chairman Sultan Ahmed Bin Sulayem, this is not the first investment that has exposed Dubai World to gambling so it should not come as such a shock.
As a result of this deal, billionaire investor Kirk Kerkorian's ownership in MGM will drop from 54.15% to "only" 51.65%.
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor's Observer.
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Reader Comments (Page 1 of 1)
8-22-2007 @ 6:20PM
DayNovo said...
Oil money and investments do indeed make for interesting bedfellows. Of course, further ironies abound in the worldwide supply of crude:
http://sneakybusiness.typepad.com/sneaky/2007/08/dubai-sidesteps.html