Casino Control Commission agrees to allow MGM a second chance to keep stake in Borgata Hotel Casino and Spa - pressofAtlanticCity.com: Breaking News

Casino Control Commission agrees to allow MGM a second chance to keep stake in Borgata Hotel Casino and Spa - pressofAtlanticCity.com: Breaking News

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Casino Control Commission agrees to allow MGM a second chance to keep stake in Borgata Hotel Casino and Spa

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Posted: Wednesday, February 13, 2013 11:42 am | Updated: 6:31 pm, Wed Feb 13, 2013.

Las Vegas gambling giant MGM Resorts International will get a second chance to keep its ownership in Borgata Hotel Casino & Spa and seek a New Jersey casino license — three years after it left Atlantic City in a highly publicized dispute.

In a preliminary move, the New Jersey Casino Control Commission agreed Wednesday to restart the licensing process and consider MGM’s request to retain its 50 percent stake in Borgata. MGM will now file an application to qualify for a license.

Regulators emphasized that MGM must go through an exhaustive background investigation before any final decisions are made about its license. They could not say how long it will take to complete the investigation.

“Let me stress, we are not here today to determine whether MGM is suitable to hold a license. That’s an issue for another day,” said Matthew Levinson, the Casino Control Commission’s chairman.

MGM is asking for permission to keep its ownership in Borgata as a March 24 deadline approaches for the casino’s sale. However, the sale deadline will be stayed while MGM pursues a license. In the meantime, MGM’s interest in Borgata will be held in a trust pending completion of the licensing process.

The remaining 50 percent ownership of Borgata continues to be held by Boyd Gaming Group, Borgata’s operator. Boyd supports MGM’s petition to keep half-ownership in Borgata. Up to this point, Boyd has not shown any interest in buying MGM’s share.

MGM is seeking a New Jersey license three years after it refused to sever ties with Hong Kong businesswoman Pansy Ho for a Macau casino. In 2009, the New Jersey Division of Gaming Enforcement objected to Pansy Ho, finding she was an “unsuitable” partner for MGM because of alleged Asian organized crime connections by her father, Stanley Ho, a Macau casino mogul. MGM and the Ho family have denied the allegations.

David Rebuck, director of the Division of Gaming Enforcement, said his agency will now scrutinize all aspects of MGM’s operations, not only in Macau and Hong Kong, but also in other areas where the company is seeking casino licenses. He noted that New Jersey will work with regulators in Massachusetts, Maryland and Toronto because MGM wants to build new casinos in those markets.

“It’s going to be thoroughly and exhaustively investigated,” Rebuck said. “Everybody understands that we are looking at everything.”

In a 2010 standoff with New Jersey regulators, MGM decided to sell its interest in Borgata and leave Atlantic City instead of ending its partnership with Pansy Ho. Now, MGM argues that its bid for a New Jersey casino license should be reconsidered because its relationship with Pansy Ho has changed in the past three years.

Previously, their partnership in the Macau casino was 50-50, but a restructuring has reduced Pansy Ho’s stake to just 27 percent. MGM noted that it now holds a majority stake in the casino and also controls its board of directors.

MGM also said in papers filed with regulators that Pansy Ho is financially independent from her father and that he is in no position to “improperly influence” his daughter. MGM also said that Pansy Ho has taken control of the Hong Kong-based shipping, property, hospitality and investment company formerly dominated by her father.

MGM, a top operator in the casino industry, owns some of the best-known properties on the Las Vegas Strip, including Bellagio, CityCenter, MGM Grand, Mandalay Bay and The Mirage.

Nicholas Casiello, a lawyer representing MGM, told the Casino Control Commission that the company is excited by the prospect of returning to Atlantic City.

“Borgata fits nicely into the long-term marketing strategy of MGM,” Casiello said.

Casiello said MGM has made a substantial investment in Borgata and is also the largest casino landowner in Atlantic City. Its holdings include 72 acres of casino-zoned land next to Borgata and a 14-acre site adjacent to Golden Nugget Atlantic City.

Over the years, MGM tantalized Atlantic City with promises of casinos that were never built. In the 1990s, it abandoned plans for a Boardwalk casino in the South Inlet section. Another proposed MGM casino in the Marina District never materialized. Most recently, MGM shelved plans in 2008 for a $5 billion megaresort, on the 72-acre site next to Borgata, because of the sluggish economy and global credit crisis.

Contact Donald Wittkowski:

609-272-7258

DWittkowski@pressofac.com

© 2014 pressofAtlanticCity.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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