Author Home Author Archives Search Articles Subscribe
Stay informed with the
NEW Casino City Times newsletter!
Newsletter Signup
Stay informed with the
NEW Casino City Times newsletter!
Related Links
Related News
Recent Articles
Best of Howard Stutz
Howard Stutz

MGM to divest from Atlantic City

8 February 2010

ATLANTIC CITY, New Jersey -- MGM Mirage announced this morning it will divest itself from its holdings in Atlantic City by placing its 50 percent ownership stake in the Borgata resort and its vacant land holdings into a trust arrangement.

The move will allow MGM Mirage to sell its stake in the casino, which the company owns in a joint venture agreement with Boyd Gaming Corp.

Last year, New Jersey gaming regulators ruled that Hong Kong businesswoman Pansy Ho, company's joint venture partner in Macau, was unsuitable. Ho is the daughter of billionaire Macau casino kingpin Stanley Ho, who is alleged by authorities to have ties to Chinese organized crime triads.

MGM Mirage and Pansy Ho each own 50 percent of the MGM Grand Macau.

MGM Mirage had been in settlement discussions with the New Jersey Division of Gaming Enforcement.

"We disagree with the New Jersey Division of Gaming Enforcement's recommendation to the Casino Control Commission concerning our Macau partner, but believe pursuing a settlement with the DGE represents the best course of action for our company and its shareholders," MGM Mirage Chairman and Chief Executive Officer Jim Murren said in a statement. "We would like to put this matter behind us and move forward with the compelling growth opportunities we have in Macau."

MGM Mirage would be the sole economic beneficiary of the trust. While a definitive settlement with New Jersey has not been reached, MGM Mirage asked its lenders to consent to the trust arrangement. Any settlement is subject to approval by New Jersey casino authorities.

JP Morgan gaming analyst Joe Greff told investors this morning the move wasn't a surprise and made sense for MGM Mirage.

"It's a pretty simple analysis, MGM Mirage is choosing its Macau joint venture over its Atlantic City joint venture, given Macau's growth versus Atlantic City's positioning in an increasingly competitive Northeast US gaming market," Greff said in a research note.