{"id":8053,"date":"2014-09-23T01:22:37","date_gmt":"2014-09-23T01:22:37","guid":{"rendered":"https:\/\/forumarchives.tmsites.net\/index.php\/2014\/09\/23\/atlantic-city-mgm-resorts-puts-regulators-nerves-to-rest\/"},"modified":"2014-09-23T01:22:37","modified_gmt":"2014-09-23T01:22:37","slug":"atlantic-city-mgm-resorts-puts-regulators-nerves-to-rest","status":"publish","type":"post","link":"https:\/\/forumarchives.tmsites.net\/index.php\/2014\/09\/23\/atlantic-city-mgm-resorts-puts-regulators-nerves-to-rest\/","title":{"rendered":"Atlantic City: MGM Resorts puts regulators\u2019 nerves to rest"},"content":{"rendered":"


\n\"\"
\n\tMGM Resorts International owns 50 percent of Borgata, left, in Atlantic City, as well as this 72-acre land parcel between the Borgata and Harrah’s Atlantic City. It’s unclear what the company will do with the land, seen here on Sept. 11, 2014, now that it has been re-licensed by New Jersey.<\/span><\/p>\n

\tBy HOWARD STUTZ
\n\tLAS VEGAS REVIEW-JOURNAL
\n\tATLANTIC CITY<\/p>\n

\tNew Jersey Division of Gaming Enforcement Director David Rebuck had one fear in restoring MGM Resorts International\u2019s gaming license for its 50 percent interest in the Borgata.<\/p>\n

\tHe worried that the Las Vegas-based casino giant was going to take its $86 million from a trust account and flee the state.<\/p>\n

\tMGM Resorts Chairman Jim Murren put those fears to rest after a nearly five-hour hearing in front of the Casino Control Commission on Sept. 10.<\/p>\n

\tThe company isn\u2019t vacating Renaissance Pointe in the Marina District. In fact, a street between MGM Resorts\u2019 vacant 72-acre parcel and Harrah\u2019s Atlantic City, still bears the company\u2019s old name, \u201cMGM Mirage Blvd.\u201d<\/p>\n

\tDespite Atlantic City\u2019s recent troubles \u2014 a 60 percent decline in gaming revenue since 2007 and closure of four casinos this year \u2014 Murren believes in the city by the sea.<\/p>\n

\t\u201cAt $2.5 billion annually, Atlantic City is still a significant gaming market in the U.S.,\u201d Murren said.<\/p>\n

\tRebuck oversaw the investigation of MGM Resorts, which parted ways with Atlantic City rather than sacrifice its investment in booming Macau four years ago after concerns were raised over the company\u2019s business partner.
\n\t\"\"<\/p>\n

\tBoyd Gaming Corp., which owns half of Borgata, continued to operate Atlantic City\u2019s market-leading resort. MGM\u2019s stake went into a blind trust along with its share of profits from the hotel-casino while the company sought a buyer.<\/p>\n

\tBut 18 months ago, MGM Resorts decided it wanted the license back. The company began working to prove suitable to New Jersey.<\/p>\n

\t\u201cIt was an unresolved issue in my mind,\u201d Murren said. \u201cAs a company looking at new jurisdictions, we wanted to show that we had been vetted and approved everywhere.\u201d<\/p>\n

\tRebuck called the MGM Resorts process a long, complex investigation.<\/p>\n

\t\u201cIt was as thorough a review as anyone has ever done on this company,\u201d he said.<\/p>\n

\tNew Jersey investigators went back to 2005 in looking at the MGM Resorts.<\/p>\n

\tBut Rebuck was up-front about his question: Would MGM Resorts just strike a deal with Boyd Gaming, take its money and run?<\/p>\n

\tHe had numerous discussions with Murren and other MGM Resorts executives, though the company\u2019s answer wasn\u2019t going to influence the state\u2019s finding of suitability.<\/p>\n

\t\u201cI understand \u2014 that\u2019s a business decision they have to make,\u201d Rebuck said a day before the commission hearing. \u201cI told them that I hoped they would stay engaged in Atlantic City, knowing that we are trying to do things on the cutting edge to make the industry healthier.\u201d<\/p>\n

\tUntil that Wednesday afternoon hearing near the Boardwalk, executives from MGM Resorts and Boyd Gaming couldn\u2019t discuss the Borgata.<\/p>\n

\t\u201cIf I saw Jim coming toward me, I had to turn the other way,\u201d Borgata President Tom Ballance joked.<\/p>\n

\tMurren said the company will now have an active role with the property.<\/p>\n

\tHe said MGM\u2019s entertainment connections \u2014 the company and arena\/entertainment developer AEG are building a $350 million sports arena and events center behind New York-New York on the Strip \u2014 could lead to major attractions landing at Borgata.<\/p>\n

\t\u201cWe think there is a lot to discuss from a programming perspective at the Borgata,\u201d Murren said.<\/p>\n

\tThe company plans to work with Boyd Gaming to ensure Borgata continues to lead the market. In August, the property\u2019s casino revenue increased 5.2 percent, to almost $65.9 million \u2014 22 percent of Atlantic City\u2019s total gaming revenue for the month.<\/p>\n

\tMGM Resorts also will share in Borgata\u2019s market-leading New Jersey Internet gaming business. Both MGM and Boyd have deals with European gaming giant Bwin.party.<\/p>\n

\tThat will be the extent of the company\u2019s Atlantic City efforts in the near term.<\/p>\n

\tThe company owns 14 acres adjacent to Golden Nugget Atlantic City in addition to the vacant parcel between Borgata and Harrah\u2019s. For now, both sites will sit untouched. In 2007, the former MGM Mirage announced plans to build the $5 billion MGM Grand Atlantic City adjacent to the Borgata but shelved the idea.<\/p>\n

\tBoyd Gaming CEO Keith Smith said the company was happy MGM Resorts is again an active partner, though \u201cthe day-to-day operations at the property will be unchanged.\u201d<\/p>\n

\tIn the end, MGM Resorts\u2019 Macau partner, Hong Kong businesswoman Pansy Ho, was no longer a concern to New Jersey regulators. Her stake in MGM Macau was diluted over time, and she has zero say over the company\u2019s Chinese operations.<\/p>\n

\tMGM Resorts did pay some of a $225,000 fine for a corporate oversight failure.<\/p>\n

\tMurren said it was a mistake to continue to consult with former company board member Terry Christensen after the Los Angeles attorney and legal confidant to 97-year-old billionaire Kirk Kerkorian \u2014 MGM\u2019s founder and largest shareholder \u2014 was indicted and later convicted of wiretapping.<\/p>\n

\tRebuck defended New Jersey\u2019s decision to investigate the Christensen matter.<\/p>\n

\t\"\"
\n\tMGM Resorts International owns 50 percent of Borgata in Atlantic City, as well as a 72-acre land parcel, foreground, between the Borgata and Harrah’s Atlantic City. It’s unclear what the company will do with the land, seen here on Sept. 11, 2014, now that it has been re-licensed by New Jersey.
\n\t<\/span><\/p>\n

\t\u201cWe dealt with the Christensen matter up-front,\u201d Rebuck said. \u201cWe chose to do something that others did not do. You\u2019ll have to talk with other (regulatory agencies) as to why they saw it differently than we did.\u201d<\/p>\n

\tMurren wanted to erase what he viewed as a blemish on the company\u2019s record.<\/p>\n

\tThe New Jersey matter became a point of contention in recent years as MGM expanded around the United States. The company addressed the issue in both Springfield, Mass., and National Harbor, Md., where MGM Resorts was licensed for new resort complexes.<\/p>\n

\tBut with a potential and highly competitive Japan casino process looming \u2014 MGM Resorts is making a serious effort to win a license for a casino near Tokyo or Osaka that could bring in $5 billion in annual gaming revenue \u2014 Murren wanted to put issues in Atlantic City behind him.<\/p>\n

\t\u201cIt was hanging over us,\u201d Murren said. \u201cWe wanted to clear the air.\u201d<\/p>\n

\n

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