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LAS VEGAS-The Nevada Gaming Commission said Thursday it will allow Dubai World, the investment arm of the Dubai government, to more than double its stake in MGM Mirage.

Dubai World already owns 9.4% of the company’s outstanding shares and is a 50-50 partner in Citycenter, the $11-billion, 19-million-square-foot project that is under construction on the Las Vegas Strip and on pace to open all at once in late 2009.

The Commission on Thursday approved a plan that authorizes Dubai World to up that stake to 20%. Having paid in the vicinity of $80 per share for its initial stake, Dubai World may be looking to lower its cost basis in the stock, which on Thursday was trading in the $8 range.

Dubai World is a major investment holding company with a portfolio of businesses that includes DP World, Jafza, Nakheel, Dubai Drydocks, Maritime City, Istithmar, Kerzner, One & Only, Atlantis, Barney’s, Island Global Yachting and Tamweel. Its real estate projects include Nakheel’s Palm and World developments as well as real estate investments in the US, the UK and South Africa. The conglomerate has developed 80,000 luxury residential villas and apartments and approximately three million square feet of retail space.

MGM Mirage, the largest landowner on the Las Vegas Strip, owns and operates 17 properties located in Nevada, Mississippi and Michigan. The Citycenter development includes a 4,000-room resort casino, 2,650 condominiums in multiple towers, two 400-room non-gaming hotels and 470,000 square feet of retail and entertainment space. The company had been planning another integrated resort with Dubai World subsidiary Kerzner at the north end of the Strip, next to its Circus Circus casino, but recently said that it may look to sell the property in an effort to improve its liquidity.

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