ATLANTIC CITY N.J. (Reuters) - MGM Resorts International won regulatory permission on Wednesday to re-enter the Atlantic City casino market after a 20-month investigation focusing on the company’s ties to Pansy Ho, the richest woman in Hong Kong, who New Jersey gaming regulators considered an unsuitable partner.
The unanimous vote by New Jersey’s Casino Control Commission caps a years-long saga that effectively forced MGM to give up control of its interest in the Borgata Hotel Casino and Spa, one of Atlantic City’s best-performing gaming properties in a town that has seen its fortunes fade fast.
“When I look over the last nine years, I see a company that looked for a way to get to the most lucrative gaming market on the planet,” said the commission’s chair, Matthew Levinson. “But I also see a company that took steps to remedy problems created by those shortcuts.”
In 2005, New Jersey’s gaming enforcement division began investigating MGM’s affiliation with Ho, whose father Stanley Ho built a gambling empire in Macau. MGM had a joint venture in the southern Chinese territory with Pansy Ho, considered financially dependent on her father, who was under scrutiny for alleged ties to organized crime.
Before New Jersey reached any findings, MGM pulled out, putting its 50 percent Borgata ownership into a fund controlled by a trustee, who was supposed to sell the interest if MGM did not find buyers.
But MGM received an extension, and then a hold, on any sale. In the meantime, its joint venture with Ho floated shares in an initial public offering in 2011, leaving MGM with a majority 51 percent stake and Ho with 24 percent.
MGM General Counsel John McManus noted Ho’s smaller share and told the commission that her significant wealth and several public spats with her father showed that she is independent.
MGM’s interest in returning to Atlantic City comes even as several prominent operators there have folded amid competition from casinos in neighboring states.
By next week, Atlantic City will have seen four casinos close this year. One of them, the bankrupt $2.4 billion Revel Casino Hotel, reached a deal on Wednesday to sell itself to a Florida developer for $90 million in cash.
The Trump Taj Mahal could also close in November if it cannot cut expenses and reach a deal with its largest union.
MGM is one of the biggest owners of undeveloped casino-zoned property in Atlantic City. It controls a 72-acre parcel on Renaissance Pointe in the city’s marina district, and a 14-acre parcel across from the Borgata.
Members on the commission questioned MGM Chief Executive James Murren about his plans.
“We’re going to go at this very aggressively,” Murren said. “I’m acutely aware of the sad situation that has beset the city. I don’t have any answers now, but I’m going to try very hard.”
Editing by Hilary Russ
Our Standards: The Thomson Reuters Trust Principles.