Bloomberg News

MGM Formally Asks New Jersey to Reconsider Casino License

February 11, 2013

MGM Resorts International (MGM:US), the Las Vegas-based casino operator that agreed to leave New Jersey in 2010, formally petitioned the state’s regulators to re-establish its casino license there.

MGM agreed to leave New Jersey in March 2010 amid questions about the company’s Macau business partner Pansy Ho. The casino operator now has a 51 percent stake in MGM Macau’s parent company MGM China Holdings Ltd., reducing Ho’s stake to 27 percent, according to a filing Feb. 8. New Jersey’s Division of Gaming Enforcement had recommended that Ho be deemed unsuitable to hold a license based on her family’s historical ties to organized crime.

MGM, the biggest casino operator on the Las Vegas Strip, said in March 2010 it would sell its half interest in Atlantic City’s Borgata Hotel Casino & Spa. No transaction has taken place. The company has been looking to open gambling sites in other U.S. states, including Massachusetts and Maryland, amid concern such expansion could be hampered by the failure to retain a license in New Jersey.

MGM, which boosted its stake in MGM China in 2011, has six representatives on the company’s board, while Ho has two, according to the filing.

Ho’s father, Stanley Ho, the subject of the division’s organized crime concerns, is in ill health and no longer has ownership in his daughter’s company, according to MGM’s petition.

Borgata Trust

The casino operator’s request, which the New Jersey Casino Control Commission will consider on Feb. 13, asks only for the right to reapply for a license. MGM has been out of the state for three years and would be absent for a total of four years pending an investigation, according to the filing.

MGM’s interest in the Borgata, the top-grossing casino in Atlantic City, has been held in a trust for the past three years. Las Vegas-based Boyd Gaming Group (BYD:US) operates the property and owns the other half.

MGM fell 3.4 percent to $13.05 at the close in New York. The shares have dropped 11 percent in the past 12 months, while the Russell 1000 Index had advanced 12 percent.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


Steve Ballmer, Power Forward
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • MGM
    (MGM Resorts International)
    • $21.7 USD
    • -0.01
    • -0.05%
  • BYD
    (Boyd Gaming Corp)
    • $9.89 USD
    • 0.06
    • 0.61%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus