"Essentially, we believe MGM wants to be back in Atlantic City to help put the company in good standing for pursuing new development opportunities, especially in Maryland and Massachusetts," John Kempf, gaming analyst with RBC Capital Markets L.L.C., said Monday. "They would also benefit indirectly from online-gaming legislation" and the exposure the company would get from it.
A company spokesman said Monday that MGM shut its online-casino website on the Isle of Man, a British dependency in the Irish Sea, several years ago because of customer-compliance issues. It had been open to anyone, but only residents of the United Kingdom, Portugal, Spain, Ireland, South Africa, and New Zealand were allowed to gamble with money. Residents of the United States, where federal law prohibits Internet wagering, were excluded.
Next Tuesday, lawmakers in Trenton are poised to pass a measure that would make New Jersey the third state, along with Nevada and Delaware, to offer some form of online gambling. Gov. Christie has said he would sign the Internet gaming bill into law if it included revisions he wanted.
MGM, one of the largest U.S. gambling companies and the largest operator of casinos on the Las Vegas Strip, decided in 2010 to sell its stake in the Borgata and leave New Jersey rather than cut ties to Pansy Ho, an Asian business partner. Ho's father - businessman Stanley Ho, a major casino owner in Macau - was suspected by New Jersey regulators of having ties to organized crime. MGM and Pansy Ho denied the allegations.
Under a settlement with the Division of Gaming Enforcement, MGM agreed to transfer its 50 percent stake in Borgata into a divestiture trust, of which MGM would be the sole beneficiary. The company would be permitted to reapply for a New Jersey gaming license 30 months after the completion of a sale, but one never materialized.
Boyd Gaming, which had the right of first refusal to buy MGM's half of the Borgata, never made an offer.
At the time, MGM said it wanted to divest its share so it could apply its resources to Macau, now the world's most lucrative gambling locale.
Since 2010, MGM has taken a controlling interest in MGM Macau's parent company, MGM China Holdings, which is now listed on the Hong Kong Stock Exchange, the company noted in its petition to New Jersey gaming regulators.
When Borgata debuted in 2003, MGM was the silent partner and Boyd the operator under a joint venture. Borgata has been Atlantic City's top-grossing casino every year since.
In a Feb. 11 statement, MGM said: "If our petition is successful, we would welcome the opportunity to once again be an active, contributing member of the New Jersey gaming marketplace through our 50 percent ownership of Borgata."
Boyd Gaming said it was supportive of MGM's application.
Contact Suzette Parmley at 215-854-2855 or email@example.com.