MGM Clears Hurdles in Massachusetts; Gaming Commission Still Must Okay
Posted on: December 12, 2013, 05:30h.
Last updated on: December 11, 2013, 06:06h.
Just when you thought no one would ever be good enough for Massachusetts’ insanely fastidious gaming commission, the MGM actually earned their approbation this week. The commission’s investigative arm – which could have its own TV series called “MGC P.I.” – recommended that MGM Resorts be found suitable to move forward with their Springfield casino project, with the caveat that MGM executives be able to talk their way out of a few lingering concerns of the commission, concerns that came to light when the commission conducted its regulatory background check on the casino company.
Cleared for Take Off
When we say “lengthy”, we aren’t whistling Dixie; the Bureau of Investigations and Enforcement spent the past 10 months looking through every speck of dust that anyone associated with MGM ever came across, and amazingly noted that they found nothing that would automatically disqualify the group from setting up house in the pristine state of Massachusetts.
But it’s not a done deal yet; the five Massachusetts Gaming Commissioners still get to have the last word on whether or not MGM will be able to do business in their neck of the woods. But if they give their papal blessing to the company, MGM will then be able to submit their last application as the one and only western Massachusetts casino license that will be given out; and since they’re the only remaining applicant, that would seem to be a pretty done deal.
The only tiny ding that the Bureau could dig up after nearly a year of searching – all documented in a 500-page report on the topic – was MGM’s way of dealing former executive board member Terry Christensen, who in 2008 was convicted on charges involving the wiretapping of business mogul Kirk Kerkorian’s ex-wife when Kerkorian was involved in a gruesome child support fight.
“Despite his indictment, resignation from the Board and ultimate conviction, Christensen was allowed to engage, on a repeated and prolonged basis, in certain sensitive and non-public corporate matters of MGM Resorts … including his attendance at Board meetings,” scolded the report.
In this dance of mea culpa, MGM CEO James Murren took the position of penitent profligate with the Commission at this week’s hearing, noting that it had been an error for the company to allow bad boy Christensen to continue in any capacity with the company.
“I exercised poor judgment,” said Murren, who had been the outfit’s CFO when all this went down. “It was a bad idea from the very beginning. None of us should have had any contact with (Christensen).”
Mea culpa, mea culpa, mea maxima culpa.
More Executive Contrition
Murren wasn’t the only one to throw himself on the mercy of the court, as current MGM board member (and head of its audit committee) Roland Hernandez made a point to tell commissioners that protocols are now in place within the company to ensure there will be no repeats of this poor decision-making process.
All that was then left for the commish to deal with were a few questions they had about some MGM dealings in Macau; mostly, these centered around a former partnership with Chinese business mogul (and daughter of casino mega-mogul Stanley Ho) Pansy Ho. Ho had been deemed unsuitable as a partner during a 2010 New Jersey regulatory hearing on the matter, and as such, MGM had to unload a 50 percent stake in an Atlantic City casino there, just to keep their nose clean. The allegations were that Ho’s father Stanley had had dealings with some Chinese gangs, a definite “no-no” in today’s regulatory gaming universe.
Hernandez had to explain to the Massachusetts commissioners that Ms. Ho had been involved with MGM completely separate from her father, and that she was primarily involved in non-gaming business activities regarding their MGM Macau property. Hernandez also noted that other, less finicky, states had been okay with the Ho interaction; namely, Nevada and Maryland, both of which had no problem with it. He also noted that New Jersey has now softened their own stance, and may allow MGM back into the fold in Atlantic City.
The panel should rule later this week; the commission’s chair Stephen Crosby won’t say which way the wind is blowing, but noted he appreciated the MGM execs’ openness in dealing with these issues.
But even being the only applicant and even if cleared by the commission this week, it’s still not a 100 percent slam-dunk for MGM Resorts.
“One applicant or 10, we will hold their feet to the fire to make sure we have a really good application,” Crosby advised reporters during a hearing break.
Well, no one can argue that they haven’t done that.