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Wednesday, 20 May 2009
Pansy Ho ruled unsuitable by US casino watchdog
Casino regulators in the US state of New Jersey have ruled Pansy Ho Chiu-king an “unsuitable” partner in MGM Grand Paradise, her US$1.25 billion Macau joint venture with MGM, following a four-year investigation.
Casino regulators in the US state of New Jersey have ruled Pansy Ho Chiu-king an “unsuitable” partner in MGM Grand Paradise, her US$1.25 billion Macau joint venture with MGM, following a four-year investigation.
The New Jersey Division of Gaming Enforcement (DGE) has recommended the financially troubled United States gaming giant “be directed to disengage itself from any business association with its Macau joint venture partner”, according to a US stock exchange filing yesterday by MGM Mirage. It did not say why regulators frowned on the partnership.
New Jersey formally launched its investigation into the partnership in late 2005. “Stanley Ho [Hung-sun] is a wealthy Chinese businessman who has been the subject of numerous public allegations suggesting that he has ties to Asian organised crime,” the New Jersey attorney general’s office said in its 2005 annual report. “The investigation focuses on the relationship of Pansy Ho and her father.”
Mr. Ho has repeatedly denied any links to organised crime.
MGM Mirage, which is more than US$10 billion in debt and struggling to avoid the risk of bankruptcy, said the New Jersey finding “is merely a recommendation and is not binding”. The company, controlled by billionaire Kirk Kerkorian, said it did not believe the finding “will have a material adverse effect” on its business.
The Macau contract between MGM and Ms. Ho contains a series of complex procedures to be followed in the event their partnership is found unsuitable by US regulators. Chief among those provisions is Ms. Ho’s right of first refusal on MGM’s 50 per cent stake in the joint venture.
The ultimate decision rests with the state’s politically appointed Casino Control Commission. The DGE, an arm of the New Jersey attorney general’s office, has recommended a public hearing on the matter. It has also recommended that MGM’s “due diligence and compliance efforts be found to be deficient” with regard to the Macau venture.
MGM’s overseas venture falls under the jurisdiction of regulators in the US, where it also operates casinos. It comes under New Jersey’s jurisdiction because of its 50 per cent stake in an Atlantic City casino hotel.
Gaming regulators in the US states of Nevada and Mississippi have previously approved the Macau partnership with Ms. Ho.
MGM and Ms. Ho opened the US$1.25 billion, 600-room MGM Grand Macau in December 2007. The resort has struggled amid fierce competition and the joint venture booked a net loss last year. It became technically insolvent in December, with its US$818 million in outstanding debt exceeding its assets.
Ms. Ho’s brother Lawrence Ho Yau-lung went through a similar suitability probe in Australia, and their father resigned as chairman of Melco International Development in favour of his son before gaming regulators in the state of Victoria signed off on Lawrence Ho and Melco’s casino joint venture with James Packer’s Publishing and Broadcasting.
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Pansy Ho ruled unsuitable by US casino watchdog
Neil Gough in Macau
20 May 2009
Casino regulators in the US state of New Jersey have ruled Pansy Ho Chiu-king an “unsuitable” partner in MGM Grand Paradise, her US$1.25 billion Macau joint venture with MGM, following a four-year investigation.
The New Jersey Division of Gaming Enforcement (DGE) has recommended the financially troubled United States gaming giant “be directed to disengage itself from any business association with its Macau joint venture partner”, according to a US stock exchange filing yesterday by MGM Mirage. It did not say why regulators frowned on the partnership.
New Jersey formally launched its investigation into the partnership in late 2005. “Stanley Ho [Hung-sun] is a wealthy Chinese businessman who has been the subject of numerous public allegations suggesting that he has ties to Asian organised crime,” the New Jersey attorney general’s office said in its 2005 annual report. “The investigation focuses on the relationship of Pansy Ho and her father.”
Mr. Ho has repeatedly denied any links to organised crime.
MGM Mirage, which is more than US$10 billion in debt and struggling to avoid the risk of bankruptcy, said the New Jersey finding “is merely a recommendation and is not binding”. The company, controlled by billionaire Kirk Kerkorian, said it did not believe the finding “will have a material adverse effect” on its business.
The Macau contract between MGM and Ms. Ho contains a series of complex procedures to be followed in the event their partnership is found unsuitable by US regulators. Chief among those provisions is Ms. Ho’s right of first refusal on MGM’s 50 per cent stake in the joint venture.
The ultimate decision rests with the state’s politically appointed Casino Control Commission. The DGE, an arm of the New Jersey attorney general’s office, has recommended a public hearing on the matter. It has also recommended that MGM’s “due diligence and compliance efforts be found to be deficient” with regard to the Macau venture.
MGM’s overseas venture falls under the jurisdiction of regulators in the US, where it also operates casinos. It comes under New Jersey’s jurisdiction because of its 50 per cent stake in an Atlantic City casino hotel.
Gaming regulators in the US states of Nevada and Mississippi have previously approved the Macau partnership with Ms. Ho.
MGM and Ms. Ho opened the US$1.25 billion, 600-room MGM Grand Macau in December 2007. The resort has struggled amid fierce competition and the joint venture booked a net loss last year. It became technically insolvent in December, with its US$818 million in outstanding debt exceeding its assets.
Ms. Ho’s brother Lawrence Ho Yau-lung went through a similar suitability probe in Australia, and their father resigned as chairman of Melco International Development in favour of his son before gaming regulators in the state of Victoria signed off on Lawrence Ho and Melco’s casino joint venture with James Packer’s Publishing and Broadcasting.
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