MGM Mirage would sell Atlantic City casino stake under settlement with NJ regulators

MGM Mirage to sell Atlantic City casino stake

LAS VEGAS — MGM Mirage said Friday it will sell its 50 percent stake in Atlantic City’s Borgata Hotel Casino & Spa in an agreement with New Jersey regulators, who believed that an MGM partner in a Chinese casino had ties to organized crime.

Las Vegas-based MGM said it agreed to a settlement even though it disagrees with the state regulator’s ruling on Pansy Ho, MGM Mirage’s joint venture partner in the Chinese enclave of Macau. Her father, Stanley Ho, has been accused of ties to Asian organized crime, but has never been charged. He denies any crime ties, and Pansy Ho has said she operates independently of her father.

Under the settlement with the New Jersey Division of Gaming Enforcement, MGM Mirage would stop doing business as a gaming licensee in New Jersey, and sell its 50 percent interest in the Borgata, and in related leased land in Atlantic City. The settlement is subject to approval by the New Jersey Casino Control Commission, which plans a March 17 hearing.

There was no immediate comment from state regulators.

MGM Mirage jointly owns the Borgata with Body Gaming Corp., whose interest would not be effected by the settlement. The Borgata is not connected to the Ho family.

“We have the utmost respect for the DGE but disagree with its assessment of our partner in Macau,” said Jim Murren, MGM Mirage’s chairman and CEO, said in a news release. “Regulators in other jurisdictions in which we operate casinos have thoroughly considered this matter, and all of them have either determined that the relationship is appropriate or have decided that further action is not necessary.”

But, given the division’s assessment of the organized crime allegations, Murren said the best course of action “is to settle this matter and move forward with the compelling growth opportunities we have in Macau.”

Shares of MGM rose 26 cents, or about 2.3 percent, to $11.93 in morning trading.

MGM Mirage will place its interest in the Borgata and related leased land in a divestiture trust, with a sale mandated within a 30-month period. During the first 18 months, MGM Mirage will have the right to direct the trustee to sell the trust property, subject to approval of the Casino Control Commission.

Before a sale is completed, the trust will retain any revenue from the casino and property assets in the trust, but will pay property taxes and other costs.

MGM Mirage will be permitted to reapply for a New Jersey gaming license beginning 30 months after the sale’s completion.

Out of concern about MGM Mirage’s ties with Pansy Ho, the Division of Gaming Enforcement last July asked the Casino Control Commission to reopen the Borgata’s license, which was in the fourth year of a five-year term.

Considered the father of Macau’s modern gambling industry, Stanley Ho presided over Macau’s casinos for four decades until his monopoly was broken up in 2002 after the Portuguese colony’s return to China.