Officials scrutinise high-profile joint casino venture
Posted by Gavin Smith on 22 May 2009 at 11:05
A partnership between an American gaming firm and one of the biggest names in gambling in Macao could be under threat after a recommendation by regulators.
The Financial Times reports officials in New Jersey have said MGM Mirage should be "directed to disengage" from its partner in its venture on the Chinese Island.
The recommendation from the New Jersey Division of Gaming Enforcement refers to Pansy Ho, daughter of gaming magnate Stanley.
According to the paper, the partnership involves Ho having a 50 per cent stake in the $1.25 billion MGM Grand Macau.
The division's recommendation is the first by a US panel to go against Ms Ho, and poses questions for some of MGM's American interests.
The Financial Times says the operator's deal with Ms Ho was given the thumbs up by panels in four other American states where the firm runs venues - Nevada, Illinois, Michigan and Mississippi.
The paper says if MGM Mirage can't get the green light from New Jersey, its licence for the Borgata casino in Atlantic City could be under threat.
MGM Mirage chief financial officer, Daniel D'Arrigo, submitted a filing to the Securities and Exchange Commission.
According to the paper, the firm was keen in the filing to say that the DGE could only make recommendations to the New Jersey Casino Control Commission, which can give and take away licensing.
The Times reports the filing reads: "The DGE is responsible for investigating licences and prosecuting matters before the New Jersey Commission,"
"However, the report is merely a recommendation and is not binding on the New Jersey Commission."
He also said that the DGE report, which was finished on Monday but not released, said MGM Mirage's partner was "unsuitable" and there were deficiencies in the due diligence and compliance procedures.
According to the paper, Mr D'Arrigo added: ""The New Jersey Commission has not yet taken any action with respect to the report, including whether or when a hearing should be scheduled,
"[MGM Mirage] does not believe the report will have a material adverse effect on it."
Ms Ho issued a statement which reportedly said she would take time to "read and consider" the report before deciding how to reply to it.
The MGM Grand Macau opened in 2007, and according to the Financial Times, has seen financial struggles.
Ms Ho's father has never been accused of any wrongdoing in Macao or Hong Kong. He benefited from a monopoly in Macau for four decades up to 2002.
