MGM To Leave Atlantic City Over Questions About Ho

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ATLANTIC CITY, N.J. - (Associated Press) - MGM Mirage said Friday it will sell its 50 percent stake in Atlantic City's top casino and stop doing business in New Jersey rather than cut ties with the family of an Asian casino mogul that the state felt was too closely linked with organized crime.

The Las Vegas company reached a settlement with the New Jersey Division of Gaming Enforcement in which it would put its interest in the Borgata Hotel Casino & Spa into a trust and sell it within 30 months.

MGM's exit will likely kick off an intense round of bidding for the Borgata, which dominates the nation's second-largest casino market. Co-owner Boyd Gaming has the right of first refusal to buy MGM's interest, but would not say Friday whether it planned to pursue it.

New Jersey regulators have expressed concern about 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 gangs but never charged. He denies any ties.

The gaming enforcement division had recommended that Pansy Ho be found an "unsuitable" business partner because of her father's reputed ties to Chinese triads, or criminal gangs.

"We have the utmost respect for the DGE but disagree with its assessment of our partner in Macau," said Jim Murren, MGM's chairman and CEO. "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."

The gaming enforcement division declined to comment beyond a statement outlining the terms of the settlement.

The issue first came to light in May 2009 when the gaming enforcement division asked MGM to sever its ties to Pansy Ho.

Information behind the state's request have remained sealed since then, but could be made public when the New Jersey Casino Control Commission considers whether to approve the settlement next Wednesday.

Pansy Ho has said she operates independently of her father, and MGM has defended her as "a great partner in Macau."

"Since the DGE takes a different view, we believe that the best course of action for our company and its shareholders is to settle this matter and move forward with the compelling growth opportunities we have in Macau," Murren said in a statement.

Ho has been cleared elsewhere. Nevada regulators permitted Ho to be associated with American casino companies in 2007.

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 former Portuguese colony's return to China.

Today, he competes against several casino operators, including his daughter's partnership with MGM Mirage and another run by his son. But his company, SJM Holdings, still leads the local gambling market.

Also part of the settlement, about 40 undeveloped acres of land also will be sold.

MGM will be permitted to reapply for a New Jersey casino license 30 months after the completion of the sale.

The company recently scrapped grand plans for Atlantic City that would included a $5 billion resort near the Borgata.

Business/Financial News

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