MGM Chooses Macau Over Atlantic City
After New Jersey regulators raised concerns about the suitability of MGM Mirage (MGM: 11.10 0.00%) and prompted an investigation into the companies Macau operations, the casino operator has decided to cash out of Atlantic City.
According to an undisclosed source with knowledge of the negotiations, MGM is looking into selling its 50% stake in the Borgata casino resort, co owned with Boyd Gaming, in an attempt to avoid a hearing before New Jersey’s Casino Control Commission.
The state is concerned with the companies partnership with Pansey Ho, the daughter of Stanley Ho, who allegedly “has ties to Asian organized crime.”
MGM disagrees with the state’s assessment however is concerned that a negative ruling could precipitate inquiries in other states where MGM Mirage operates.
Nevada regulators, spend two years reviewing the partnership and cleared MGM Mirage to engage in business with Pansey Ho, determining that the relationship posed no threat to MGM or to the state of Nevada.
MGM said Mississippi discussed the partnership with the company but did not determine an investigation was needed, Illinois and Michigan haven not undertaken reviews.
MGM Mirage’s decision to leave Atlantic City is an indication of how the broader gambling business has shifted to Asia. Gambling revenues in Atlantic City are at their lowest point in more than a decade, while Macau is expanding rapidly. Macau has now surpassed Las Vegas in gambling revenue and showed 48% year-over-year growth in December.
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