NJ Letting MGM Try to Keep Half of Borgata
The New Jersey Casino Control Commission on Wednesday allowed MGM Resorts International one step closer toward getting back into the Atlantic City casino market.
The company wants the commission to let it keep its 50 percent ownership of the Borgata. The commission allowed MGM to move forward Wednesday with its application, but a final decision still needs to be made following what regulators promised would be a "thorough, exhaustive" examination of MGM's worldwide business operations.
MGM decided in 2010 to sell its stake and leave New Jersey rather than cut ties to an Asian business partner in Macau. The partner's father is suspected by New Jersey regulators of having organized crime ties to Chinese gangs, but MGM and the family of Pansy Ho deny the allegations.
MGM says Ho's control of the Chinese company has lessened, and that her father, Stanley Ho, is old and sick, and not a threat to wield undue influence over her.
In a statement, the company said it is excited about the prospect of returning to New Jersey.
"We've not operated here for three years and have fully cooperated with the terms of our agreement with the state," the company said. "We look forward to demonstrating to the satisfaction of regulators that MGM Resorts meets their standards and should be permitted to return to the market. We would like to once again become an active, contributing element of the New Jersey economy, creating good jobs, attracting new visitors and playing a role in the community."
The vote was a necessary first step for MGM to undo an agreement it made with New Jersey casino regulators to walk away from the Borgata and the state, which at the time was still the nation's second-largest gambling market. (It has since lost that status to Pennsylvania.) The deal prohibited MGM from applying to return to Atlantic City until at least 30 months after its half of the Borgata had been sold.
"Let me stress: We are not here today to determine whether MGM is suitable to hold a license," said Matthew Levinson, chairman of the casino commission. "That's an issue for another day. Today we are simply deciding whether to let the company file an application with us now rather than 30 months after its interest in Borgata is sold."
Since MGM reached its agreement with the state Division of Gaming Enforcement in March 2010 to sell its half interest in the Borgata, the Atlantic City casino market has plunged since then and no one stepped up to buy MGM's share. Boyd Gaming owns the other half of the Borgata, and passed on buying MGM's share. Boyd supports MGM's bid to retain its ownership stake, Borgata vice president Joseph Corbo said.
New Jersey regulators have expressed concern about Pansy Ho, MGM Mirage's partner in the Chinese enclave of Macau. Her father, Stanley Ho, has been accused of ties to Asian organized crime gangs but never charged. He denies any such links.
In its petition to New Jersey regulators, MGM noted several changes it said should justify it being allowed to keep half of the Borgata. The Macau casino, MGM Macau, is no longer a 50-50 joint venture between the company and Pansy Ho; she now controls just over 27 percent of it.
MGM now controls the casino's board of directors, including the ability to break any ties.
While not pre-judging MGM's claims that changes in its Macau situation should justify letting it keep its half of the Borgata, officials said they at least warranted a look.
"We have to verify them for ourselves," said George Rover, deputy director of the gambling enforcement division. "A lot of it involves Macau and Hong Kong; some of it will involve Dubai. It will take a while."
MGM will next ask for a statement of compliance, which is a determination that it has the necessary qualities to hold a casino license in New Jersey. If the gaming enforcement division approves, the casino commission would then consider whether to grant the statement of compliance, which would be the final approval MGM would need to retain its stake in the Borgata.
In 2007, MGM announced plans to build a $5 billion, three-tower casino resort in Atlantic City that would have been the largest ever built here. But the company scrapped those plans just a year later when the economy foundered and casino competition in nearby states intensified.
(Copyright 2013 by The Associated Press. All Rights Reserved.)