Inside Asian Gaming

INSIDE ASIAN GAMING | April 2010 42 Briefs International Briefs and related leased land in Atlantic City. “The DGE’s Report acknowledges there is no evidence that Pansy Ho has engaged in any wrongdoing or been accused of any illegal activity,” said MGM MIRAGE Chairman and CEO Jim Murren. “Gaming regulators in the other jurisdictions where we operate casinos are well aware of this matter, had access to the same information as the New Jersey gaming regulators, and have all either determined that the Company’s relationship with Pansy Ho is appropriate or that further action was not necessary. “MGM MIRAGE structured its business relationship with Pansy Ho to ensure the highest standards of operation and compliance with all applicable gaming laws and to protect against any improper influence. We have had a very positive working relationship with Pansy Ho and have a spotless operating record at MGM Grand Macau, which opened more than two years ago. We are the only operator in Macau with a fully independent compliance committee and our joint venture meets the highest standards of good governance,” said Mr Murren. MGM MIRAGE owns the Borgata through a 50-50 joint venture with Boyd Gaming Corporation whose interest is not affected by the settlement. Under the terms of the settlement, the company will place its interest in the Borgata and related leased land in a divestiture trust. The settlement mandates the sale of the trust property within a 30- month period. During the first 18 months, the Company will have the right to direct the trustee to sell the trust property, subject to approval of the CCC. If a sale is not concluded by that time, the trustee will be responsible for selling the Company’s interest in the Borgata and related leased land during the following 12-month period. “The Borgata is the most successful property in the Atlantic City marketplace, and we expect there will be strong interest in this valuable asset. The agreement provides ample time for an orderly disposition of our interest to maximize its value to the MGM shareholders,” said Mr Murren. Prior to the consummation of the sale, the divestiture trust will retain any cash flows received in respect of the assets in trust, but will pay property taxes and other costs attributable to the trust property to the extent that minimum trust cash balances are maintained. MGM MIRAGE will be the sole economic beneficiary of the trust and will be permitted to reapply for a New Jersey gaming license beginning 30 months after the completion of the sale. New riff for Hard Rock Hard on the heels of MGM MIRAGE’s planned withdrawal from the New Jersey casino market, Hard Rock International has announced plans to build a US$300 million casino-hotel on the Atlantic City boardwalk. Hard Rock may have sensed that New Jersey’s time of relative need—with the US economy still sluggish, land prices at a relative discount and MGM MIRAGE heading for the exit—may be exactly the moment for it to get a Carnival time for casinos in Brazil? A group of federal politicians in Brazil has proposed legalising land-based casino gambling in the country on the back of a new law to regulate bingo. Non-gambler Sílvio Costa, one of the politicians supporting the move, said he was doing so to boost tourism, employment and tax revenue. “A lot of people leave Brazil to play abroad. They could spend money here. It would be a way to develop poor regions in the northeast”, he explained to Jornal do Commércio. Under Mr Costa’s proposed amendment to pending bingo legislation, state governments within Brazil would have the right to put bids for casinos out to competitive tender, with a maximum of two venues per state. The country’s Federal Treasury would monitor the casinos closely to guard against them becoming a target for financial crime such as money-laundering, added Mr Costa. The tax raised would be shared between the state government and the national government, with the latter’s portion used to subsidise the nation’s spending on welfare. Older hands in the gaming industry will remember that Brazil has been down the path toward casino legalisation before. Without the support of the current federal government—yet to be garnered— the latest proposal is unlikely to get very far. Brazil is the fifth largest country in the world by surface area and has a population of 192 million—around 75% of them Roman Catholic. The Church is likely to oppose any legalisation of casino gambling. New Jersey says ‘no evidence’ against Pansy Ho According to a PR Newswire report MGM MIRAGE announced that the New Jersey Casino Control Commission (CCC) approved the settlement agreement between the Company and the New Jersey Division of Gaming Enforcement (DGE) under which MGM MIRAGE will sell its 50% ownership interest in the Borgata Hotel Casino & Spa Borgata Casino Hard Rock eyes Atlantic City