When regulators forced MGM Mirage to choose between investments in Atlantic City and Macau, the Chinese gambling enclave won. In a report made public Wednesday, New Jersey casino regulators accused Macau's gambling mogul Stanley Ho of engaging in organized crime in his country, virtually labelling him a mobster. Ho, who controls 20 of the 33 casinos in Macao, held the casino monopoly in the now Special Administration Province of China until 2002.

For years this accusation has been addressed to Ho, who has always denied the allegations and has never been formally charged with any crime. He has been accepted as an example to follow by the new China “one country-two systems” business policy in Macao. New Jersey's gaming officials presented MGM Mirage with an ultimatum, based on current state law, whereby the US gambling giant could either cut off ties with Pansy Ho, its partner in Macau, or sell its 50% stake in the Borgata Hotel Casino & Spa, Atlantic City's highest-grossing property held in partnership with the Boyd Gaming Corporation.

For MGM it was a no-brainer. The US jurisdiction’s share of the gaming market is in a continuous shrinking pattern and MGM Mirage has opted to keep its ties to China and Ho’s daughter. The US casino operator and developer has decided to end its current and future interests in New Jersey, putting its Borgata interest into a trust until it finds a suitable buyer. Additionally, and this is bad news for Atlantic City and the State’s economy, MGM has scrapped plans for another US$5 billion casino investment on the famous Boardwalk.

For nonagenarian majority shareholder of MGM, Kirk Kerkorian, the Atlantic City regulator’s ultimatum is a decision less to make, as revenue for the East coast jurisdiction plummeted 16% between February 2008 and February 2009. In February this year New Jersey’s 11 casinos won US$262 million (Borgata revenue was down 20.6%, its largest ever monthly decline) while Macau surged 70% in overall gambling revenue for the same period reaching US$1.8 billion. MGM has no need to ask anyone to “Show me the money!” (E-03.18.10)

© Copyright 2010 CasinoCompendium



>>> return to archives
>>> return to frontpage