New Jersey Agency to Review Finding Against MGM
By ALEXANDRA BERZON
New Jersey regulators are set to reconsider a decision that had forced MGM Resorts International MGM +4.40% to put its stake in an Atlantic City casino up for sale, people familiar with the matter said.The review, coupled with an application from an online gambling company, promises to test New Jersey's notoriously tough gambling regulators as Atlantic City struggles with the loss of its monopoly on East Coast gambling.
Bloomberg News
Pansy Ho
Ms. Ho and her father, Stanley Ho, have denied wrongdoing. They couldn't be reached for comment for this article.
Gambling regulators in other jurisdictions, such as Nevada, have found nothing wrong in MGM's arrangement with Ms. Ho.
MGM has said it disagreed with New Jersey's decision. The company has received several extensions of the deadline to sell its stake and still hasn't sold it.
Officials in New Jersey's Division of Gaming Enforcement have begun internal discussions to reconsider their earlier determination, the people familiar with the matter said. The agency declined to comment.
Intent on keeping out organized crime when the state in the 1970s become the second in the country to legalize gambling, New Jersey has denied licenses that other states approved.
But Atlantic City gambling revenue has been dropping sharply over the past half-dozen years as casinos opened in nearby states. New Jersey Gov. Chris Christie on Thursday gave his conditional support to legislation that would allow Internet gambling. Proponents say online gambling will save jobs and fuel investment in the state.
"The question is: Is this a new time because the city is in such a dire financial situation?" said Gary Ehrlich, a former deputy director of New Jersey's Division of Gaming Enforcement. "New Jersey could say it is the best regulator in the world, but then Atlantic City closes down, and where's the glory in that? Maybe they're becoming more realistic."
State Sen. Jim Whelan, who represents Atlantic City, said regulators may have been too tough on MGM and could be changing their approach as the gambling industry has matured and has become less influenced by criminal elements. "The reality is that MGM has been licensed all over the world, and this is something that should have another look," Mr. Whelen said.
MGM planned Thursday to make a formal application for regulators to reconsider the Borgata investment, a person familiar with the matter said. The company planned to argue that the arrangement with Ms. Ho should be less troubling to regulators now because her influence and the size of her stake in the Macau business has decreased since the earlier investigation, the person said.
MGM is applying for licenses to build casinos in Maryland and Massachusetts and would like to remove a stain from its record ahead of those proceedings, the person familiar with the matter said. It also would like to retain its stake in the Borgata, the person said.
New Jersey regulators in 2010 found that its partner, Ms. Ho, could be susceptible to influence from unsuitable people because her father had provided her most of the money in the partnership and had helped to arrange the deal. Mr. Ho, a casino mogul in Macau, has long been suspected by U.S. agencies, including the State Department, of ties to organized crime, but has denied wrongdoing.
Ms. Ho was a 50% partner when MGM built a Macau casino. But in 2011, MGM and Ms. Ho restructured their arrangement to reduce Ms. Ho's stake, which now stands around 27%. The company also restructured the Macau subsidiary's board to reduce Ms. Ho's influence. The venture is planning a second Macau casino.
Reopening the Ho investigation would be unusual for New Jersey's gambling regulator but not unprecedented. In 1985 the state found that Hilton Hotels Corp. was unfit to hold a casino license for a nearly finished casino, citing alleged Mafia ties of one of its lawyers. Six years later regulators reversed that decision.
New Jersey regulators also will be tested by an application made late last year by online poker company PokerStars for a license to run a casino that the company plans to buy in Atlantic City.
PokerStars agreed last year to a $731 million settlement with the Justice Department, which had accused the company of bank fraud, money laundering and illegal gambling. The company, based in the Isle of Man, denied wrongdoing and settled without admitting wrongdoing. The company's founder, Israeli entrepreneur Isai Scheinberg, is under indictment on related charges.
He has remained out of the country and hasn't been arrested. Under terms of the settlement, he stepped down from management duties but is allowed to remain an adviser. His son is now chairman of PokerStars and manages the company's operations and retains ownership, according to a person familiar with the matter.
New Jersey's regulatory agency "has a well-earned reputation as one of the most stringent regulatory bodies in the world," said PokerStars spokesman Eric Hollreiser. "We will work closely with them to satisfy their licensing requirements, just as we have worked with regulators around the world who have found us to be a very suitable and responsible operator."
—Kate O'Keeffe contributed to this article. Write to Alexandra Berzon at alexandra.berzon@wsj.com
HI-
Thanks for the help. The item’s
below. I’d be happy to mail you a copy, if you give me a mailing
address.
Claude
Solnik
(631)
913-4244
Long Island Business
News
2150
Smithtown Ave.
Ronkonkoma,
NY 11779-7348
Home >
LI Confidential
> Stop scratching on holidays
Stop scratching on holidays
Published: June 1, 2012
Off Track Betting in New York State has been racing into a crisis called shrinking revenue. Some people have spitballed a solution: Don’t close on holidays.
New York State Racing Law bars racing on Christmas, Easter and Palm Sunday, and the state has ruled OTBs can’t handle action on those days, even though they could easily broadcast races from out of state.
“You should be able to bet whenever you want,” said Jackson Leeds, a Nassau OTB employee who makes an occasional bet. He added some irrefutable logic: “How is the business going to make money if you’re not open to take people’s bets?”
Elias Tsekerides, president of the Federation of Hellenic Societies of Greater New York, said OTB is open on Greek Orthodox Easter and Palm Sunday.
“I don’t want discrimination,” Tsekerides said. “They close for the Catholics, but open for the Greek Orthodox? It’s either open for all or not open.”
OTB officials have said they lose millions by closing on Palm Sunday alone, with tracks such as Gulfstream, Santa Anita, Turf Paradise and Hawthorne running.
One option: OTBs could just stay open and face the consequences. New York City OTB did just that back in 2003. The handle was about $1.5 million – and OTB was fined $5,000.
Easy money.
No comments:
Post a Comment