Was there a story behind the story last week when MGM MIRAGE Inc. (MGM) announced it planned to build a $5 billion casino resort on property adjoining the Borgata Hotel/Casino & Spa in Atlantic City?
Speculators were quick to point out that MGM’s partnership with Pansy Ho was as much a part of the announcement as anything else. For months, MGM has been awaiting action by New Jersey regulators on their suitability request of Pansy Ho as a proposed partner in a Macau casino.
Both Mississippi and Nevada regulatory bodies have approved Pansy Ho, daughter of Macau casino mogul Stanley Ho. Allegations against Stanley Ho regarding criminal ties have surfaced whenever his name has come up during reviews of casino applications in multiple jurisdictions.
The N.J. Division of Gaming Enforcement has been investigating these allegations for the past couple of years, ever since MGM MIRAGE announced it planned to enter the Macau gaming scene as Pansy Ho’s partner. Investigators had planned to file a report with the attorney general’s office last year but never did.
Whether the investigation has been completed or whether it is ready to be filed was still unknown last week although rumors suggested the N.J. Casino Control Commission would address the matter soon.
Business at Atlantic City’s 11 casinos has fallen off badly during the current calendar year. Revenues have fallen some 4% during the year while the August report indicated a decline of 11% for the month.
In light of the poor business climate, observers felt that the possibility of MGM MIRAGE cancelling the project and even giving up its New Jersey license as a partner in the Borgata was serious enough to attract the attention of Gov. Jon Corzine.
"The most important thing that happened in Atlantic City today," Corzine was quoted as saying, "was MGM announcing that they’re going to put in a $4.5 billion to $5 billion investment. I’m excited about the future of Atlantic City. The most important thing is that outside investors believe that Atlantic City is a place where they want to put major dollars and major commitment for the long run."
The planned development would consist of thee separate hotel towers totaling 3,000 rooms. Each tower could be connected to a massive gaming floor, a 1,500 seat theater, restaurants, nightclubs, 500,000 square feet of retail space and a convention center.
"It’s a very exciting project that is another step in Atlantic City’s evolution to a full-scale destination resort, which is critical given the competition we currently face," said Joe Corbo, president of the Casino Association of New Jersey.
Nobody mentioned Pansy Ho.