Friday, March 12, 2010 | 7:45 a.m.
Casino billionaire Stanley Ho and daughter Pansy Ho attend a groundbreaking ceremony for an MGM Mirage casino in 2005 in Macau.
MGM Mirage today said it entered into a settlement agreement with the New Jersey Division of Gaming Enforcement under which it will sell its 50 percent stake in the Borgata Hotel Casino & Spa and related leased land in Atlantic City.
The deal was driven by the division's recommendation to the New Jersey Casino Control Commission last year that MGM Mirage's partner in the Chinese gambling district of Macau, Pansy Ho, be found unsuitable because of allegations her father Stanley Ho has had ties to organized crime.
The division recommended that MGM Mirage be directed to disengage from any business association with Pansy Ho. MGM Mirage instead chose to maintain its casino partnership in Macau and at least temporarily exit the New Jersey market.
Las Vegas-based MGM Mirage had previously disclosed settlement talks were under way focusing on placing the company's New Jersey interests into a divestiture trust. Under today's settlement, which is subject to approval of the New Jersey Casino Control Commission:
-- MGM Mirage's interest in the Borgata and the land will be placed into a divestiture trust and the interest is to be sold within 30 months.
-- MGM Mirage will cease doing business as a gaming licensee in New Jersey, but can re-apply for a license there 30 months after the sale
"We have the utmost respect for the DGE but disagree with its assessment of our partner in Macau," Jim Murren, MGM Mirage chairman and chief executive, said in a statement. "Regulators in other jurisdictions in which we operate casinos have thoroughly considered this matter and all of them have either determined that the relationship is appropriate or have decided that further action is not necessary. Since the DGE takes a different view, we believe that the best course of action for our company and its shareholders is to settle this matter and move forward with the compelling growth opportunities we have in Macau."
The Casino Control Commission is expected to hold a hearing on the settlement on March 17.
Prior to the sale, the divestiture trust will retain any cash flows from the trust assets and pay property taxes and other costs attributable to the trust property.
"Until all the trust property is sold and the trust terminates, the trust may not distribute to the company any funds, including earnings, lease payments or sale proceeds received in connection with the trust property," MGM Mirage said in a regulatory filing.
MGM Mirage will be the sole economic beneficiary of the trust.
"The Borgata is the most successful property in the Atlantic City marketplace, and we expect there will be strong interest in this valuable asset," said Murren.
MGM Mirage said Boyd Gaming Corp. of Las Vegas, it's partner in Borgata, isn't affected by the settlement. Boyd hasn't indicated if it will buy out its partner.
http://www.lasvegassun.com/news/2010/mar/12/mgm-mirage-sell-its-stake-atlantic-citys-borgata/
