Poll

No votes (0%)
3 votes (100%)

3 members have voted

pacomartin
pacomartin
Joined: Jan 14, 2010
  • Threads: 649
  • Posts: 7895
October 17th, 2010 at 12:56:55 PM permalink
Howard Stutz is the premier business reporter on gaming in Las Vegas.

Howard is accused by some people as being somewhat insensitive, too cavalier about the destruction of the business and the loss of jobs.

I think Howard could dig a little deeper. For instance the following quote in his article:
The Borgata deal is key to MGM Resorts' debt-payment plans. The casino operator is counting on the $250 million. Another $114 million sitting in trust will go to the company once the sale is final. Those amounts of money seem incredibly small to be key when you are talking about $13 billion in long term debt.

It seems like MGM is giving up a profitable operation for very little money. I realize they have to do that if they want to
increase their investment in Macau.
SanchoPanza
SanchoPanza
Joined: May 10, 2010
  • Threads: 34
  • Posts: 3343
October 17th, 2010 at 2:50:09 PM permalink
Quote: pacomartin

It seems like MGM is giving up a profitable operation for very little money. I realize they have to do that if they want to increase their investment in Macau.


No way. The State of New Jersey forced MGM to relinquish its license. The rotten timing was purely coincidental:

For Immediate Release:
For Further Information:

March 17, 2010

Office of The Attorney General
- Paula T. Dow, Attorney General
Division of Gaming Enforcement
- Josh Lichtblau, Director

Peter Aseltine
609-292-4791

Casino Control Commission Approves Settlement Under Which MGM Mirage will Divest Interest in Borgata Hotel Casino

o Stipulation of Settlement and Trust Agreement pdf
o DGE Report MGM Macau Joint Venture pdf

TRENTON – The New Jersey Casino Control Commission today approved a stipulation of settlement between the New Jersey Division of Gaming Enforcement and MGM MIRAGE under which the company will surrender its qualification for a casino license in New Jersey and place its 50 percent interest in the Borgata Hotel Casino & Spa in Atlantic City into a divestiture trust, Attorney General Paula T. Dow and Division Director Josh Lichtblau announced.

The settlement relates to the May 2009 report of the Division of Gaming Enforcement (DGE) to the Casino Control Commission regarding MGM MIRAGE’s joint venture with Hong Kong businesswoman Pansy Ho to develop, own and operate the MGM Grand Macau hotel casino in Macau, China. The report is being made public today for the first time and is posted with this release at www.njpublicsafety.com.

In its report to the Casino Control Commission, the DGE recommended, among other things, that MGM MIRAGE’s joint venture partner in Macau be found unsuitable and that the company be directed to disengage itself from any business association with her. Rather than contest the report before the Casino Control Commission, MGM MIRAGE decided under the settlement to divest its one-half interest in the Borgata. In doing so, the company did not admit liability and retained the right to receive all proceeds of the sale of its interest in the Borgata.

DGE investigated all aspects of MGM MIRAGE’S joint venture with Pansy Ho to determine whether its actions and business association with her were consistent with the “good character, honesty and integrity” and the compliance obligations required by the Casino Control Act.

“The integrity of casino operators and owners has always been of paramount concern to the Division of Gaming Enforcement, and that concern extends to a licensee’s associates,” said Director Josh Lichtblau. “In order to maintain the public’s confidence in safe and fair gaming, we need to ensure the integrity of those who control the casinos. Public confidence, in turn, is critical to the overall economic prospects and health of gaming in New Jersey.”

DGE’s investigation included 35 sworn interviews of 17 people, including Pansy Ho and her sister, Daisy Ho, and numerous other investigative interviews.

Attorneys and investigators made several trips to Hong Kong and Macau, and traveled to many other locations inside and outside of the United States, seeking information relevant to this investigation. In addition, DGE staff analyzed thousands of pages of documents, including emails and correspondence, and contacted numerous domestic and international law enforcement and regulatory authorities.

The lead attorney for DGE was Assistant Attorney General George Rover, who coordinated and supervised the investigation. Assistance was provided by Deputy Attorney General Louis Rogacki and Assistant Attorney General Anthony Zarrillo. The lead investigator was Supervising Investigator Mark Sivetz, who was assisted by Investigators Marianne Liwacz, Bud Humphreville and Joseph Kisko.

Attorney General Dow also thanked Special Agent Arthur Durrant III of the Federal Bureau of Investigation and Supervisory Agent Thomas Ma of the U.S. Drug Enforcement Administration for their assistance.

MGM MIRAGE has a 50 percent ownership interest in Marina District Development Corporation, which owns the Borgata and is the entity licensed by the Casino Control Commission. MGM MIRAGE’s joint partner in the Borgata, Boyd Gaming Corporation, owns the other half of Marina District Development Corporation and is the operating partner of the Borgata.

MGM MIRAGE will turn over its 50 percent interest in the Borgata to a trustee under a Trust Agreement which was also approved today by the Casino Control Commission. James R. Zazzali, former Chief Justice of the New Jersey Supreme Court, was appointed as the trustee. The Stipulation of Settlement and Trust Agreement are also posted online with this release at www.njpublicsafety.com.

MGM MIRAGE is required to sell its interest in the Borgata within 30 months. For the first 18 months, MGM MIRAGE will participate in the sale process. If no sale has been completed in 18 months, the trustee will have sole authority to direct the sale process for the remaining 12 months. MGM MIRAGE will be the sole economic beneficiary of the divestiture trust.

Boyd Gaming will retain its one-half interest in the Borgata, and the divestiture by MGM MIRAGE will not affect the operation of the Borgata. Boyd Gaming was not a subject of the DGE investigation and report.

Pursuant to the settlement, MGM MIRAGE will pay for all regulatory costs of the trustee, DGE and Casino Control Commission associated with the implementation of the settlement and the divestiture of its one-half interest.

###
SanchoPanza
SanchoPanza
Joined: May 10, 2010
  • Threads: 34
  • Posts: 3343
October 17th, 2010 at 4:33:38 PM permalink
Update: MGM Is Still Exiting
From Press staff reports | Posted: Friday, October 15, 2010

From Press staff reportsATLANTIC CITY - The New Jersey Casino Control Commission on Thursday approved the $73 million sale of land underneath the Borgata Hotel Casino & Spa to an investment group.

Las Vegas gaming giant MGM Resorts International is selling the 11.3 acres of land and related ground leases to Vornado Realty Trust and Geyser Holdings as part of its exit strategy from Atlantic City.

Separate from the land deal, MGM is also looking to sell its 50 percent stake in Borgata itself. MGM an-nounced Tuesday that it has received a $250 million offer from an undisclosed would-be buyer for its share of Borgata.

Boyd Gaming Corp., which operates Borgata and owns the other half, has first rights to buy MGM's share. Boyd has until Nov. 12 to decide whether it will match the offer from the undisclosed suitor.

MGM is unloading its share of Borgata and its land holdings in Atlantic City following a settlement earlier this year with New Jersey gaming regulators over their objections to the company's partnership in a Macau casino.

MGM chose to pull out of Atlantic City instead of severing its Macau ties with Hong Kong businesswoman Pansy Ho. The New Jersey Division of Gaming Enforcement alleged that Pansy Ho's father, Macau casino tycoon Stanley Ho, has links to Asian organized crime.
pacomartin
pacomartin
Joined: Jan 14, 2010
  • Threads: 649
  • Posts: 7895
October 18th, 2010 at 2:41:05 PM permalink
Part of my argument with Howard's reporting. MGM would never have sold their half of the Borgata without being forced to by the NJ gaming comission. I fail to see how selling a $1/4 billion dollar asset could be considered key to retiring $13 billion in debt.

To be fair to Howard I find that most news reporting is somewhat simplistic.
Ayecarumba
Ayecarumba
Joined: Nov 17, 2009
  • Threads: 227
  • Posts: 6342
October 18th, 2010 at 5:25:17 PM permalink
I miss Rod Smith (the former "Inside Gaming" columnist) . That being said, I think Howard Stutz has done a good job, and I enjoy his weekly column.

As for the MGM Borgata deal, it was written up as part of an article commenting that bargain prices for casino debt were the norm. I also wonder with MGM if the "mystery bidder" is nothing more than a shill to satisfy the New Jersey D.A.'s demand that the Ho clan get out of Atlantic City.
Simplicity is the ultimate sophistication - Leonardo da Vinci

  • Jump to: