MGM Mirage is picking up its toys and going home. It was revealed last month that the company is selling its 50 percent interest in the Borgata (with managing partner Boyd Gaming) and relinquishing its license in New Jersey in order to continue to operate in Macau.
Last year, the state Division of Gaming Enforcement, the investigative arm of the New Jersey regulatory scheme, recommended that the Casino Control Commission not approve Pansy Ho as a suitable partner for MGM Mirage. Most states require their licensees to submit for approval any business arrangement agreed to in another jurisdiction to ensure that the integrity of its regulatory process is upheld. Nevada, Mississippi and Illinois had already given their OK.
Pansy Ho is the daughter of Stanley Ho, the former gaming mogul in Macau. When China took over Macau in 1999, the gaming industry was opened up to three concession-holders. Stanley Ho’s SJM was awarded one of those concessions, along with Wynn Resorts and Galaxy Entertainment.
The problem comes when you examine the background of Stanley Ho. While he ran the gaming monopoly in Macau, he was allegedly involved with the Chinese Triads, a sophisticated crime organization in Asia. Ho therefore is tainted with that connection and could not be licensed in most major gaming jurisdictions, according to experts.
MGM claims that the decision is simply business-related. Company officials claim that they are not interested in New Jersey if they are forced to give up Macau.
The company is currently in discussions with the DGE about settlement of the DGE complaint and has placed its Borgata interest into trust, pending a sale.