MGM in eye of A.C. storm

Oct 16, 2007 3:09 AM

The work of moonlighting agents at New Jersey’s Division of Gaming Enforcement may spark an explosive situation as gaming regulators there near the completion of their review of Pansy Ho as MGM Mirage’s Macau partner.

"This could get nasty before it’s over," warned a source familiar with thinking at the highest levels of MGM.

There is no disagreement that DGE agents have been moonlighting for Fred Gushin, a former deputy director of the DGE, who now heads Spectrum Gaming, which has been doing gaming-related reports and background reviews for interests with a hand in the gaming business around the world.

It is the conflicts some see arising from the varied interests of Spectrum’s client list and the use of off-duty DGE agents to service these interests that could produce sparks, if they haven’t already.

The catalyst for possible explosive happenings could stem from the DGE’s long-delayed report on MGM’s plans for a Macau casino with Pansy Ho. The ripple effects go, well, just about everywhere.

Sources familiar with the situation say MGM sees signs of a conflict — or the appearances of a conflict — in DGE personnel going about their day jobs while also moonlighting for Spectrum as it services the information appetites of customers with whom MGM is competing — people such as Venetian boss Sheldon Adelson, with whom MGM unsuccessfully competed for a Singapore license. They will soon be competing in Macau where the MGM-Ho casino is scheduled to open late this year.

Agents moonlighting for Spectrum Gaming would become a major story should MGM decide to fight a negative New Jersey decision concerning its Macau partnership with the daughter of Stanley Ho.

Gushin flatly denies encouraging or tolerating conflicts, saying DGE personnel pursuing Spectrum assignments have never worked in roles that conflict with those of their so-called day jobs.

"We’ve always followed a policy of full disclosure," he explained, telling clients about past work that might appear to conflict with the interests of potential customers. "We let the client decide."

Gushin says he did work for Singapore, and MGM claimed this was a conflict, a charge rejected by Singapore authorities who eventually awarded a casino license to Adelson. The list of unsuccessful bidders in Singapore included MGM.

Recent events make it easy to imagine MGM pushing matters to the limit. MGM has shown little inclination to roll over as it has demonstrated by going to court in Detroit to successfully fight a possible closure order and by joining other casinos that have (so far) successfully challenged tax legislation in Illinois.

The issue of what DGE personnel are or are not doing for Spectrum, might never have earned much public notice except that Spectrum generated a background report on Pansy Ho for Adelson.

Contents of that report ended up in the hands of Family Focus which describes itself as a "coalition against gambling expansion," an American-based "coalition" that has developed a driving concern with casino gambling by Macau’s mostly Chinese customers.

Gushin declined to discuss his work for Adelson.

He has found it easy to reach into the DGE — he was a top official there for more than a dozen years — for personnel trained in the sophisticated gathering and presentation of insights, opinions, etc., required by a wide variety of individuals, companies and jurisdictions around the world.

Nevada regulators say they were unimpressed with the barrage of material (including information lifted from the spectrum report for Adelson) forwarded by Family Focus to members of the Gaming Commission and Control Board, noting it did not include any information that had not already been reviewed by its own agents. And, anyway, it was Pansy and not her controversial dad who was looking for approval.

The Focus opposition to the MGM-Ho partnership has always appeared to get a somewhat warmer reception in New Jersey ”¦ whatever the facts might be.

There had been no announcement as of several days ago about when the DGE would complete its MGM report, and give whatever in-house review might be required before sending it on to the Casino Control Commission.