MGM-Ho link probed

Sep 19, 2006 3:07 AM

MGM Mirage may face a huge decision in New Jersey where the Division of Gaming Enforcement (DGE) is reviewing the company’s joint venture plans for one or more Macau casinos.

Does the state want one of its licensees doing business in Macau with the daughter of Stanley Ho?

The answer could be crucial.

This 2004 excerpt from the Asian Pacific Post offers one example of a long history of allegations that investigators are not inclined to ignore.

"Operations of the gambling king are intricately linked to Asian organized crime ... STDM (Ho’s casino company) is allegedly at the center of money laundering schemes involving billions of dollars out of China through Macau into Hong Kong."

None of this has ever been proven in anything resembling a court of law, and never mind that Ho’s 44-year-old daughter Pansy Ho Chiu-King denies her dad has any connection with the MGM deal.

Yeah, sure — said with a skeptical sigh and a rolling of the eyes — is the apparent reaction of New Jersey officials who want to check it out for themselves. They have probably already noted that Stanley Ho is executive director of Shun Tak Holdings, the Hong Kong company that employs his daughter as managing director.

"They’re being very aggressive," a well positioned source said of the New Jersey probe.

The DGE will eventually file a report with the Casino Control Commission. What happens then will depend on their conclusions.

There could be a hearing. There could be a demand for disciplinary action. Then again, it could amount to very little.

If it proves to be a big deal, MGM may have to make a choice — its planned investment in Macau, or its half-interest in Atlantic City’s Borgata and the prospect for more ventures there.

Speculation would be a waste of time if it weren’t for the fact that this has happened before in New Jersey.

”¡ MGM majority stockholder Kirk Kerkorian saw how Nevada licensees were being beaten up as they applied for New Jersey licenses in the early 1980s and pulled the plug on plans for a giant resort in the Marina area.

”¡ Hilton failed to get enough votes in 1985 and had to dump some key people.

”¡ Caesars World was told by New Jersey officials in 1980 that if it wanted its Caesars Atlantic City, it would have to cut founder Clifford Perlman and his brother Stuart out of the company. And it did.

For now, let’s see how it plays out during the weeks and months ahead.

Morgan Stanley may be the next big equity investor to apply for a Nevada casino license under new licensing provisions that allow investment firms to actually sit in casino boardrooms as decision-making owners.

Oaktree Capital and the Goldman Sach’s-owned Whitehall Funds have been approved during recent months at the Cannery Casinos and Las Vegas Hilton, respectively.

As for Morgan Stanley (or any others), Gaming Control Board members say they are not prepared to discuss applications that have not yet been filed, even if the prospective applicant in question is circling the Board’s parking lot looking for a place to park.

Stanley has bought land adjacent to the Atlantic City Showboat that appears destined to be focus of a new gaming company headed by Penn National Chairman Kevin DeSanctis, who has already announced his intention to leave Penn by the end of the year and form what is to be known as Revel Entertainment.

Whether Revel will revel in the possibilities of a Las Vegas venture are not known, but the signs appear to point in that direction.

Steve Wynn’s decision to give his casino floor people more money by redistributing casino tokes appears to already be having an effect elsewhere.

Floor people at the Venetian and at least some of the MGM Mirage casinos have been told they will be receiving more money, although there is no sign that their raises will involve taking a smaller cut of the tokes.

Professional poker player Barry Greenstein says he’s disappointed with the apparent course of events since a half-dozen poker pros filed suit against World Poker Tour Enterprises alleging the WPTE unfairly utilized their names and images and has strived to limit competition.

Greenstein is not connected with the suit that was filed in federal court two months ago. Rather, he’s tried to be the peace-maker since he sits in the high stakes games with the representatives of both sides

"Things have become contentious and personal with a lot of name-calling," Greenstein added. "People are not talking issues any more. They’re reacting. Lawyers are hired to win cases and NOT to be fair."

Once a business is attacked, he said, it becomes that much more difficult to sit down and discuss issues that could have been managed into submission with something less than the filing of a lawsuit.

Greenstein helped avoid trouble in at least one other area of the continually evolving poker landscape as a professional poker league takes shape.

Leaders of the effort to get the league going have dropped demands that players appear exclusively in league events. In other words, a player agreeing to affiliate himself with one of the teams in the league will also be able to appear in other high profile televised events.

The proposed league has a cable television agreement and will probably play its events at the Venetian, although none of this has been confirmed in anything resembling an announcement.