|The casino industry's biggest trade group is short one major player at its table after casino giant Mandalay Resort Group walked away from the American Gaming Association.|
The departure of Mandalay, (MBG,) whose resorts include Circus Circus and Mandalay Bay, is far from a death knell for the American Gaming Association (AGA), the gaming industry's main lobbying body, analysts and observers said.
But the move may reflect a growing dissatisfaction by some members and could undermine the idea that there is an association that gives the industry a single voice on important issues like Internet gambling and expansion into new regions, they added.
Mandalay told the AGA last week it did not intend to renew its membership when it expires in July, an AGA spokeswoman said. Mandalay has been a member since its founding in 1995.
The spokeswoman declined to say how much Mandalay pays in annual dues, but companies of that size generally pay about $500,000 per year, said a spokesman at one rival company.
Mandalay President Glenn Schaeffer confirmed his company will no longer belong to the group. 'We're going to participate on a case-by-case basis there,' Schaeffer said. 'We will join forces where we see a common interest. We'll know them when we see them.' He declined to elaborate
AGA President and Chief Executive Officer Frank Fahrenkopf was unavailable for comment.
Industry watchers said the move reflects a growing feeling that giants MGM Mirage (MGG) and Harrah's Entertainment Inc. (HET) have gained undue influence over the AGA's agenda.
MGM Mirage spokesman Allen Feldman said his company is 'honestly perplexed' by Mandalay's decision.
'To some extent, at some point everyone has disagreements in membership organizations,' he said. 'It's almost impossible not to. But to quit is an awfully unsual step to take.'
Feldman called the loss of Mandalay 'unfortunate,' but said it would not stop the AGA from being effective.
Bear Stearns gaming analyst Jason Ader agreed that Mandalay's departure was a setback but said it would not create a crisis for the AGA.
'I view it as a setback for the industry because it's hard to have a unified voice if there's dissention among the leading companies,' Ader said. 'But industry conditions are very competitive, and relationships in some cases have gotten more strained over the years. Creating an organization like the AGA has been a political balance from day one.'