MGM Mirage has reached an agreement with the state of New Jersey to sell its 50% stake in the Borgata, a hotel-casino in Atlantic City.
The company is placing its Borgata stake in a divestiture trust because state gaming regulators disapprove of MGM Mirage’s business partner in Macau, Pansy Ho.
The N.J. Division of Gaming Enforcement has said that Ho is unsuitable because of her father Stanley Ho’s alleged ties to organized crime.
In order to operate in New Jersey, MGM Mirage would have to sell its stake in the MGM Grand Macau, thus exiting Macau’s booming casino industry.
MGM Mirage CEO Jim Murren noted that gaming regulators in Nevada and other jurisdictions have determined that the MGM Mirage-Ho relationship is appropriate.
"Since the N.J. Division of Gaming Enforcement takes a different view, we believe that the best course of action for our company and its shareholders is to settle this matter and move forward with the compelling growth opportunities we have in Macau," Murren said.
The settlement mandates the sale of MGM Mirage’s Borgata stake within 30 months. During the first 18 months, MGM Mirage has the right to direct the trustee to sell the stake, subject to approval of the N.J. Casino Control Commission.
If a sale is not concluded by that time, the trustee will be responsible for selling MGM Mirage’s interest during the following 12 months.
Boyd Gaming owns the other 50% of the Borgata. Boyd’s interest is not affected by the settlement.
"The Borgata is the most successful property in the Atlantic City marketplace, and we expect there will be strong interest in this valuable asset," said Murren.