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TRENTON
– The New Jersey Division of Gaming
Enforcement has executed a stipulation of
settlement with MGM MIRAGE under which the
company would surrender its qualification
for a casino license in New Jersey and place
its 50 percent interest in the Borgata Hotel
Casino & Spa in Atlantic City into a
divestiture trust, Attorney General Paula
T. Dow and Division Director Josh Lichtblau
announced.
The
settlement, which must be approved by the
New Jersey Casino Control Commission, relates
to the May 2009 report of the Division of
Gaming Enforcement (DGE) to the Casino Control
Commission regarding MGM MIRAGE’s
joint venture with Hong Kong businesswoman
Pansy Ho to develop, own and operate the
MGM Grand Macau hotel casino in Macau, China.
In
its report to the Casino Control Commission,
the DGE recommended, among other things,
that MGM MIRAGE’s joint venture partner
in Macau be found unsuitable and that the
company be directed to disengage itself
from any business association with her.
Rather
than contest the report before the Casino
Control Commission, MGM MIRAGE has decided
under the settlement to divest its one-half
interest in the Borgata. In doing so, the
company does not admit liability and would
retain the right to receive all proceeds
of the sale of its interest in the Borgata.
MGM
MIRAGE has a 50 percent ownership interest
in Marina District Development Corporation,
which owns the Borgata and is the entity
licensed by the Casino Control Commission.
MGM MIRAGE’s joint partner in the
Borgata, Boyd Gaming Corporation, owns the
other half of Marina District Development
Corporation and is the operating partner
of the Borgata.
MGM
MIRAGE would turn over its 50 percent interest
in the Borgata to a trustee under a Trust
Agreement, which also is subject to the
approval of the Casino Control Commission.
MGM MIRAGE would be required to sell its
interest in the Borgata within 30 months.
For the first 18 months, MGM MIRAGE would
participate in the sale process. If no sale
has been completed in 18 months, the trustee
would have sole authority to direct the
sale process for the remaining 12 months.
MGM MIRAGE would be the sole economic beneficiary
of the divestiture trust.
Boyd
Gaming would retain its one-half interest
in the Borgata, and the divestiture by MGM
MIRAGE would not affect the operation of
the Borgata. Boyd Gaming was not a subject
of the DGE investigation and report.
Pursuant
to the settlement, MGM MIRAGE will pay for
all regulatory costs of the trustee, DGE
and Casino Control Commission associated
with the implementation of the settlement
and the divestiture of its one-half interest.
MGM
MIRAGE agrees not to contest the public
release of the DGE report on the company’s
joint venture in Macau. It would be made
public upon approval by the Casino Control
Commission of the Stipulation of Settlement
and Trust Agreement. Those agreements would
also be made public upon approval by the
Casino Control Commission.
It
is anticipated that the Casino Control Commission
will consider the settlement at its public
meeting on March 17. No other information
or comment on the settlement or report will
be released at this time.
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