MGM bets on Macau over Atlantic City
TEXT OF STORY
Kai Ryssdal: MGM Mirage has chosen Asia over Atlantic City. The casino company said today it’s going to hold on to its profitable venture in Macau, China and try to unload its stake in a billion-dollar casino in Jersey. MGM is under some pressure from New Jersey gaming regulators. They say its partner in Macau has links to Chinese organized crime syndicates. So, faced with the option of unloading the Chinese casino, or the New Jersey one, MGM is sticking with China.
Marketplace’s Mitchell Hartman reports.
MITCHELL HARTMAN: New Jersey’s gaming agency ruled last spring that MGM Mirage would have to stop operating in the state, or cut ties to its Macau partner Pansy Ho. That’s because of her father’s roots in China’s gambling industry, says I. Nelson Rose of Whittier Law School and the University of Macau.
I. NELSON ROSE: Her father, Stanley Ho, is one of the wealthiest men in the world. And there were always some rumors that there might be connections with organized crime.
Nevada regulators checked and cleared those connections, letting the company’s joint ownership of the MGM Grand Macau go forward.
ROSE: Nevada doesn’t particularly see something wrong if there’s allegations about a father. Where New Jersey is always trying to be super-strict and super-clean.
New Jersey has painted the company into a corner, says Bill Thompson of the University of Nevada. It’s in debt for a big Las Vegas development, and business at its Atlantic City casino — the Borgata — is down.
BILL THOMPSON: With the onset of competition from Pennsylvania, table games in Maryland and Delaware, they say, “Let’s stay in Macau, let’s get out of New Jersey, we have to sell something anyway, good timing, get rid of the Borgata.”
And the Macau market? It’s now bigger than Atlantic City and Nevada combined. Revenues in January were up 65 percent.
A spokesman for MGM Mirage told Marketplace the company “continues to work toward a solution” in New Jersey. That’s while also pursuing divestiture of its Atlantic City properties.
I’m Mitchell Hartman for Marketplace.
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