June 20, 2004 - Think of billionaire Kirk Kerkorian, 87, majority owner of MGM Mirage and the Metro-Goldwyn-Mayer film studios, as a little old man pulling the strings behind a curtain and Las Vegas as the city at the end of his yellow brick road.

Looked at that way, the tale of modern-day Las Vegas seems like a remake of "The Wizard of Oz."

Kerkorian has been working his wizardry and making history in Las Vegas for 35 years, and many industry experts agree he has done more than any other individual to transform the dusty hideout for bootleggers and mob figures into an icon of modern-day capitalism and colossal financial deals.

Kerkorian's latest masterstroke, the $7.9 billion MGM Mirage buyout of Mandalay Resort Group, only reinforces his image as the wizard behind-the-curtains working his magic on Las Vegas.

Consider this: If this latest deal goes through as proposed, it will be the largest gaming industry merger ever. It will also create the biggest casino company ever, with nearly 30 properties worldwide, about 70,000 workers and annual revenues of nearly $7 billion.

A reclusive figure, Kerkorian made no public appearances or announcements about the buyout offer or the merger. A spokeswoman said Kerkorian declined comment because he does not do media interviews.

But industry insiders and experts say he was a constant force behind the scenes, pulling all the strings.

"He loves the idea of having everything connected and he really believes bigger is better," said Las Vegas developer Steve Wynn, who has known Kerkorian for decades.

When the deal closes, probably in the first quarter of 2005, Kerkorian's company will control everything on the west side of the Strip from Russell to Spring Mountain roads except Caesars Palace.

Kerkorian is already the world's 65th richest person, according to Forbes' annual list of billionaires. He owns 57 percent of MGM Mirage through his Tracinda holding company, named for his daughters Tracy and Linda.

The buyout will add several popular Strip properties, including Mandalay Bay, Luxor, Excalibur and Circus Circus, and their 20,000 rooms to his company's holdings. MGM Mirage already owns many of the most popular hotel-casinos on the Strip, including the MGM Grand, New York-New York, Bellagio, The Mirage and Treasure Island, controlling more than 17,000 rooms in Las Vegas.

The two companies already jointly own Monte Carlo.

After an MGM Mirage-Mandalay merger, Kerkorian's company would operate nearly half of the 74,000 rooms on the Strip, about 40 percent of its slots and about 44 percent of its table games.

"Kirk has always tested scale," Wynn said. "When there were 400-room hotels, he built a 1,500-room resort. Then he outbuilt himself with a 2,000-room resort, and did it again with a 5,000-room giant. Look at his track record."

Bugsy Siegel and Jay Sarno may have started modern Las Vegas rolling with the Flamingo and Caesars Palace, but Kerkorian launched the era of the megaresort.

He did that by opening what was then the largest hotel in the world, the International, now the Las Vegas Hilton, on Paradise Road in 1969 with 1,512 rooms.

With the new hotel less than a spectacular success, mounting debts forced Kerkorian to sell a controlling interest in International Leisure to Hilton Hotels with the proviso he would not build a competing hotel in Las Vegas. At the same time he started buying stock in the troubled MGM studios.

By 1971, he had control of MGM and announced he would -- again -- build the world's largest resort hotel in Las Vegas. This time, he did it behind the corporate veil of MGM to comply with his Hilton contract. Before 1969, state law prohibited corporations from building or owning casinos. That policy was reversed when the state enacted the Corporate Gaming Act of 1969.

He opened the original MGM Grand, now Caesars Entertainment's Bally's, with 2,084 rooms, on Flamingo Road at the Strip in 1973. Again, his new Las Vegas resort was the biggest hotel in the world at the time.

Work was wrapped up on the first MGM Grand one day before a new Clark County building code went into effect that would have required fire suppression sprinklers, University of Nevada, Las Vegas professor and casino industry expert Bill Thompson said.

The lack of sprinklers led to tragedy in 1980, when the hotel was devastated by a fire that killed 87 people and injured hundreds.

Even though the hotel reopened eight months later, to this day it is referred to as the site of Las Vegas' worst disaster.

In 1986, Kerkorian sold both the Las Vegas and Reno MGMs to Bally Manufacturing Corp.

Going again for the title of biggest, in 1993 Kerkorian opened the current MGM Grand, which had 5,000 rooms, the most ever at the time. The hotel also had a theme park as big as Disneyland when it opened in 1955.

The theme park never caught on, and the Emerald City, as the megaresort was known, needed a face lift, retheming and extensive remodeling before it became a commercial success. Even then, it faced stiff competition from Circus Circus Enterprises' Luxor and Mirage Resorts' Treasure Island, which opened the same year.

From there, however, the billionaire, who by then was known as a magician of corporate takeovers, shifted gears and started buying up properties and companies.

"He never had a bit of luck building hotels from scratch, but he has been the best acquirer of properties in the history of Las Vegas," Wynn said.

In 2000, he masterminded a $6.4 billion buyout of Wynn's Mirage Resorts, at the time the biggest merger in gaming industry history.

And now, he's moving to do it again with his proposed $7.9 billion, $71 a share, buyout of Mandalay.

"He's the second deep pocket who brought legitimate capital to town. He's also the first person to come here and build as a hands-on operator," University of Nevada, Las Vegas History Department Chairman Hal Rothman said. "Howard Hughes doesn't count because he didn't build."

In addition to dismissing Hughes as a true hotel mogul because he never built resorts, Thompson said the hotels the reclusive billionaire bought were allowed to deteriorate. Thompson also said Hughes did not bring in the massive capital infusions that were ultimately successful in squeezing out the mob.

"Kerkorian rescued us from Hughes. By making properties so big, he took them out of the reach of the Mafia. They were too big and too expensive," he said.

Still, Rothman said Kerkorian has never been the transforming figure Wynn has because he mainly built boxes, and then changed tactics to buying resorts developed by other entrepreneurs.

"Wynn and recently (Mandalay President Glenn) Schaeffer have been the guys on a bicycle pedaling as fast as they could with the Kerkorian battleship steaming in behind them," he said.

"What Kerkorian did do is see the value of their vision and accelerate the pace of (development) by the sheer volume of capital and the sheer size of building," Rothman said.

"He's a transforming figure, not in having the vision, but in putting the vision in a new way and injecting incredible capital to make it happen. If anyone in capital markets had reservations about Las Vegas, he put those concerns to rest," he said.

Thompson said Kerkorian tends to do things in threes; witness he built the largest hotel in the world in Las Vegas three times.

"It'll be interesting to see what he does next. Maybe he'll figure out a way to gobble up Caesars," Thompson said.

Thompson, however, said Kerkorian's two major merger moves in Las Vegas are simply giant moves in the consolidation of what is now a maturing American industry -- gaming.

"It's like the auto industry in the 1940s and '50s, when we had Packard, Jeep and Studebaker folding into the Big Three," Thompson said.

Wynn said Kerkorian has been pivotal in Las Vegas history in two ways: building hotels and establishing a scale for the size of resorts and capital.

"The MGM Grand was the first deal over $1 billion on the Strip. I think that was a pivotal moment. He has been a pioneer in taking the city to new levels," he said.

However, Wynn said mergers don't add new elements or levels.

"Consolidation, itself, doesn't change anything until it starts to stifle competition. There's no value added. But what do you expect a development guy like me to say?" Wynn said.

Rothman, however, said he sees the Mandalay takeover as a major move in a table game that combines elements of both Monopoly and Risk.

"It puts tremendous pressure on Caesars Entertainment in the sense there were three big competitors (on the Strip) and now there are two," he said.

"And it really accentuates the importance of the properties around the north end of the Strip because it means development will happen. Wynn Las Vegas was pushing it there. This will make it happen," Rothman said.

Thompson said the Mandalay acquisition in itself may just mark another major wave of mergers. But it also raises bigger questions about the possible sale and redevelopment of secondary properties such as the New Frontier, Riviera, Sahara, Wet 'n Wild and Stardust.

Such redevelopment possibilities, Rothman said, make the merger a pivotal development, but not, in itself, a transforming event.

"The real question is: 'What does the next billionaire person interested in Las Vegas and gaming do?' " Thompson said. "Do they consolidate more, do they build another super-resort or do they develop niche properties?"

A recent American Gaming Association survey of industry executives found that more than half of them believe the real future of the gaming industry lies in the development of more niche properties, along the lines of the Palms, Hard Rock Hotel and Terrible's Hotel and Casino.

Industry experts, however, agreed that Kerkorian probably has at least another hand to play on the consolidation front and that's he's paved the way for a new generation of entrepreneurs at the same time.

And, at least one casino industry icon believes there is still time for the wizard to strike again.

"Kirk was in great shape when he turned 87 the other day," Wynn said. "He'll probably live to be 100."

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