A resort project on about 20 acres owned by Morgan Stanley with Kevin DeSanctis as its CEO will settle into Atlantic City offices within the next several weeks and then begin making some announcements. DeSanctis left the presidency of Penn National late last year to form Revel Entertainment, the company that will operate the massive project.
This will be as big a deal as anything Atlantic City has seen over the last 30 years since Resorts International got the casino business going.
Steve Wynn definitely has powerful interests speaking on behalf of his hopes for building a multibillion dollar resort that might involve razing part of the historic Boardwalk Arena and the aging Trump Plaza.
A recent Atlantic City Press editorial considered the civic trauma associated with Wynn’s hopes and concluded, "The concept itself is intriguing. The devil is in the details."
Elsewhere, Pinnacle Entertainment, has hired Carl Zeitz, a former member of the Casino Control Commission, to speak on behalf of its plans for a resort with Boardwalk frontage on property that was once the site of the Sands. Opening day is several years away and it will not retain the Sands name.
We’ve even seen MGM executives hint that 2007 might be the year when the company moves forward with plans for its first East Coast marquee project.
Local interests say that would be nice, but quite frankly, they’ll believe it when they see it. Some of those AC interests have tired of company suggestions that a wholly-owned MGM project was just around the corner.
These interests don’t count the Borgata, a joint venture involving MGM operated by Boyd Gaming.
MGM eyes Macau
In other MGM-related business, company Chairman Terry Lanni is a master strategist. Either that or he has one working for him.
Lanni’s overhaul of the company’s compliance committee, a plan that was announced at last week’s Gaming Control Board meeting, probably had everything to do with questions regulators in two states are expected to ask about MGM’s hopes for operating a Macau casino in partnership with Stanley Ho’s daughter Pansy Ho.
The controversial Stanley Ho operated all Macau casinos until 2001 when three new licenses were issued, one to Stanley, another to Steve Wynn and a third to Galaxy, a Hong Kong company which subsequently issued a sub-concession to the Sands and Sheldon Adelson.
Wynn sold his sub-concession to a joint venture headed by another of Ho’s offspring and James Packer, the son of the late high-rolling legend Kerry Packer.
The MGM project is based on a sub-concession granted by one of Stanley’s companies to Shun Tak Holdings headed by Pansy.
Nevada gaming regulators are expected to act on MGM’s foreign gaming application, probably near the end of February.
In New Jersey, the Division of Gaming Enforcement has also been considering how it feels about Ho’s daughter in a joint venture relationship with one of that state’s licensees.
The DGE’s report was expected late last year, according to unofficial sources but had not been completed as of several days ago.
All three members of the MGM compliance committee are now outside directors as opposed to being part of management. Their job is to review agreements such as the Macau proposal for the resort that’s due to open later this year.
Committee members are former special agent in charge of the FBI’s Las Vegas office Ellen Knowlton, dean of the University of Nevada School of Law Richard Morgan and attorney and former Gaming Commission member Bill Urga.
Lanni can now explain, as I’m guessing he will, that the company has taken a pro-active approach to positioning qualified non-management people to determine that deals such as the Macau plan mesh with the expectations of gaming regulators.
The significance of this action was clear last week when about a dozen MGM heavyweights, including Lanni, showed up for a relatively routine Control Board agenda item involving the approval of a new director.
No one expects Nevada to act against MGM’s Macau plan. Two of the state’s major licensees, Wynn and Adelson, are already doing business there and commercial gaming has been part of Nevada’s social, political and economic fabric for generations.
Last week’s action concerning the compliance committee makes it easier for MGM officials to argue that they are moving forward with the expectations of gaming regulators in mind.
Things are less certain in New Jersey where a well-placed source says the DGE has taken an "aggressive" approach to this investigation.
Translation: approval certainly isn’t assured.