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Howard Stutz
 

MGM Mirage compliance heads in new direction

11 January 2007

LAS VEGAS, Nevada -- When the seemingly routine suitability hearing by the Gaming Control Board on Wednesday for an MGM Mirage director attracted 12 company representatives, including Chairman and Chief Executive Officer Terry Lanni, it was clear that something was brewing.

MGM Mirage used the meeting to announce the company's new direction for its compliance committee, creating a three-member panel in which its members are completely independent from the casino company. The panel will review MGM Mirage's transactions and relationships involving the company's dealings, domestically and internationally.

"We had a robust compliance program, but it needed to be more independent that it was," Lanni said after the hearing in which the control board found director Roland Hernandez suitable to sit on the casino company's board.

"The people on the committee were members of management, and I didn't think that was appropriate," Lanni said. "I thought it was better having people totally unrelated reporting directly to the audit committee, and the audit committee and the board agreed with that."

Hernandez, the retired chairman and CEO of Spanish-language television company Telemundo Group, chairs MGM Mirage's board of directors audit committee, which will have oversight for the compliance committee.

Lanni said that factor was the primary reason the company wanted to unveil its new program Wednesday.

Traditionally, compliance committees review contracts, agreements and partnerships for the casino operator. By state gaming regulation, the panel has to include at least one independent member.

"This takes it to a new level to have that review done by a completely independent body," said gaming attorney Ellen Whittemore of Lionel Sawyer and Collins. "I'm not aware of any other casino company compliance committee composed of completely independent members."

Lanni said former Nevada Gaming Commission member Bill Urga; Richard Morgan, the current dean of the University of Nevada, Las Vegas Boyd School of Law; and Ellen Knowlton, the retired special agent in charge of the Las Vegas office of the FBI; have already begun reviewing issues.

MGM Mirage has announced development deals recently in China, the United Arab Emirates and with the Mashantucket Pequot Tribal Nation, which operates the Foxwoods hotel-casino in southwestern Connecticut.

"There was no one single factor but when you have something happening so many miles away, it gives the board a and management more comfort in our system," Lanni said.

MGM Mirage is also building the $1 billion MGM Grand Macau in China. Questions have arisen about the connections between the company's partner in Macau, Chinese businesswoman Pansy Ho, and her father, controversial Chinese billionaire Stanley Ho.

The company filed an application last year with Nevada gaming regulators find Pansy Ho suitable as a joint venture partner. The matter may be resolved next month.

Lanni said the new compliance committee was not related to the company's relationship with Pansy Ho.

"If I had any concern that she wasn't an independent person, then (the deal) wouldn't be where it is right now," Lanni said. "I have no concerns about that. I've known her about a dozen years and she's very independent and she's very tough. She's not an easy partner. She's a competent, bright, successful businesswoman."

MGM Mirage compliance heads in new direction is republished from Online.CasinoCity.com.