By Christopher Palmeri and Annie Linskey
Feb. 7 (Bloomberg) -- New Jersey regulators are rethinking a 2010 settlement that requires MGM Resorts International to sell its half-interest in Atlantic City’s top-grossing Borgata Hotel Casino & Spa.
MGM agreed to the sale three years ago after New Jersey’s Division of Gaming Enforcement said Pansy Ho, the Las Vegas-based company’s partner in the Chinese enclave of Macau, should be deemed unsuitable under state law based on her family’s history of organized crime ties.
The settlement in New Jersey could complicate MGM’s efforts to establish casinos in other states. Gaming officials have discussed a change in their recommendation, according to Lisa Spengler, a spokeswoman for the division, who said today MGM hasn’t formally asked them to do so. Alan Feldman, a spokesman for MGM, declined to comment.
Borgata, which is co-owned and managed by Las Vegas-based Boyd Gaming Corp., is the top-grossing casino in Atlantic City. David Strow, a Boyd spokesman, said the company would support an application by MGM to amend the agreement.
“MGM has been a great partner to Boyd Gaming at Borgata and is a leader in the gaming industry,” Strow said in an e-mail.
MGM, the largest operator of casinos on the Las Vegas Strip, has been looking to expand into other U.S. jurisdictions including Massachusetts and Maryland.
At a legislative hearing in Maryland last year, a state senator asked MGM officials about the company’s relationship with Ho. Later, during the state’s referendum on gambling expansion, a group opposed to the expansion ran an ad citing MGM’s link to “organized crime.”
Gayle Cameron, who formerly conducted casino licensing background checks for the New Jersey State Police, now sits on the Massachusetts Gaming Commission, which will approve casino licenses in that state.
Elaine Driscoll, a spokeswoman for the Massachusetts commission, said she couldn’t comment on MGM.
“Every applicant and their identified qualifiers will be subject to extraordinarily rigorous and thorough background investigations,” she said in an e-mail.
The Wall Street Journal reported the story earlier today.
MGM fell 0.4 percent to $12.94 at the close in New York. The stock has risen 11 percent this year. Boyd advanced 2.8 percent to $7.10.