Dubai World in Casino Business

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Aug 22 2007
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Dubai World, a government-owned holding company which made headlines last year when its subsidiary, Dubai Ports World, was forced to sell its U.S. port operations after an uproar in Congress over security concerns will invest about $5 billion in MGM Mirage, the casino operator. The investment includes $2.7 billion for CityCenter and up to $2.4 billion in purchases of MGM Mirage common stock.

The deal will give Dubai World a minority stake in MGM, with both companies entering a joint venture for CityCenter. The joint venture, CityCenter Holdings LLC, will be owned equally by MGM Mirage and Infinity World Development Corp., a subsidiary of Dubai World. The joint venture will fully own the CityCenter development when it closes.

Dubai World this month signed an agreement for control of the Barneys New York department store. A division of Dubai World spent $100 million this year to buy the QE2, the majestic ocean liner that has carried millions of people across the Atlantic during its 40-year history. The company plans to turn the giant passenger ship into a first-class floating hotel, retail and entertainment destination, berthed off Dubai’s manmade Palm Jumeirah island.

Hey, I thought gambling or casino is prohibited within the law of Islam but then this is business and money talks. It could be argued that Dubai World is just an investor and play no role in running the casino business but still. I’m just wondering if Chua Ma Yu who paid RM1.168bil cash to acquire a 14.02% stake in Star Cruises Ltd from Resorts World (KLSE: RESORTS, stock-code 4715) will resell it to Dubai World for a handsome gain.

MGM shares jumped more than 10 percent, or $7.53, to $81.85 at the open of trading Wednesday.

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