Gaming Strategy
Featured Stories
Legal News Financial News Casino Opening and Remodeling News Gaming Industry Executives Author Home Author Archives Search Articles Subscribe
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Recent Articles
Arnold M. Knightly

MGM Mirage under scrutiny in N.J.

3 August 2009

LAS VEGAS, Nevada –- New Jersey or Macau? That's a question MGM Mirage might have to answer soon.

New Jersey's casino regulators are reopening a licensing hearing to determine MGM Mirage's suitability to hold a gaming license in New Jersey, MGM Mirage and Boyd Gaming Corp. announced Friday in filings with the Securities and Exchange Commission.

The suitability of MGM Mirage to be licensed to jointly own the Borgata is at issue because of its partnership with the daughter of a casino magnate alleged to have ties to organized crime in Hong Kong. The Borgata is a 50-50 partnership between MGM Mirage and Boyd Gaming.

Boyd is not involved in the Macau venture with Pansy Ho and MGM Mirage.

The gaming companies said the New Jersey attorney general's Division of Gaming Enforcement asked regulators to reopen the licensing hearing "for the exclusive purpose of examining the qualifications of MGM Mirage," the gaming companies said in the filings.

Concerns about MGM Mirage's joint venture in Macau with Ho were raised in a staff report in May, according to the filings.

Alan Feldman, MGM Mirage's senior vice president of public affairs, said Friday that it would "be wrong and premature for anyone to draw conclusions regarding concerns and information contained in the (division's) report" before the company can present evidence and legal arguments to the commission.

"Based on commission practices, regulatory history and fundamental legal and administrative fairness, we do not expect this matter to be resolved for the better part of a year, or longer," Feldman said in a statement. "It is only fair that we be allowed the time needed to prepare and present a responsive case before the commission."

Ho, the daughter of controversial Hong Kong billionaire Stanley Ho, owns 50 percent of the MGM Grand Macau, the company's $1.25 billion Chinese gaming resort.

The New Jersey gaming division recommended in May in a special report that MGM Mirage "disengage itself from any business association" with Ho, according to MGM Mirage.

MGM Mirage said the division, which has not made the full report public, also found Pansy Ho to be an unsuitable partner and that MGM Mirage's efforts to comply with New Jersey's licensing requirements had been deficient.

The casino control commission has not ruled on the division's recommendations. It is reopening the licensing hearing to consider the findings, although no hearing date has been set.

The Borgata's five-year gaming license is set to expire next year.

Boyd spokesman David Strow said Friday the letter that was sent to the commission stated that the "matter could be investigated without negatively affecting the Borgata's casino license or Boyd Gaming."

Both MGM Mirage and Boyd said hearings will not affect Borgata's day-to-day operations, employees or customers to the property.

Nevada casino regulators held hearings on MGM Mirage's partnership with Ho in March 2007 and found her to be a suitable partner.

Nevada Gaming Control Board Chairman Dennis Neilander could not be reached for comment on Friday's developments.

In May, however, Neilander told the Review-Journal that Nevada has different laws governing the suitability of a gaming licensee's business partner. He said then that the commission could change its decision if New Jersey regulators have information that Nevada regulators did not see.

"If there was evidence not provided to us, then there would be a concern," Neilander said in May. "Otherwise, it would seem that the Division of Gaming Enforcement came to a conclusion using the same facts but applying New Jersey law."

Nevada regulators' decision might not matter, though, if New Jersey gaming regulators accept the report's findings that MGM Mirage is unsuitable to be licensed in New Jersey.

If that happens, the gaming giant could be faced with either selling its 50 percent interest in the Borgata and maintaining its ties to Pansy Ho or selling its half interest in the MGM Grand Macau so it can keep its New Jersey gaming license.

MGM Mirage under scrutiny in N.J. is republished from