When confronted with a similar question a couple of years ago, New Jersey, a state that is no stranger to organized crime, balked — leading to MGM’s expected exit from Atlantic City.
But in Maryland, it is unclear what would happen.
Both MGM and the Peterson Cos., the developer of National Harbor, say they are confident that MGM won’t face similar resistance if they seek a gaming license in Maryland.
Among other things, they point out that four states, including Nevada, where most of MGM’s casinos are, have not taken similar actions as in New Jersey. But most everyone, including MGM, acknowledges that the company’s arrangement in Macau, China, would be heavily scrutinized in Maryland — with an outcome that is hard to predict, according to several experts.
“In New Jersey and Nevada, they looked at the same evidence and came to different conclusions,” said William R. Eadington, director of the Institute for the Study of Gambling and Commercial Gaming at the University of Nevada at Reno.
As part of a periodic review of MGM’s standing in New Jersey, officials balked at the co-ownership of its Macau property with Pansy Ho, the daughter of China casino magnate Stanley Ho.
“Numerous governmental and regulatory agencies have referenced Stanley Ho’s association with criminal enterprises, including permitting organized crime to operate and thrive within his casinos,” said a 74-page report by the New Jersey Division of Gaming Enforcement made public in 2010 after a multi-year investigation.
The report included allegations of use of VIP rooms in Stanley Ho’s casinos by crime groups known as triads to engage in activities including debt collection, drugs and prostitution. Stanley Ho is not listed as an owner of the MGM Grand Macau, and none of the alleged crime in the report was said to have occurred in that casino.
New Jersey officials did not accuse Pansy Ho of illegal activity but found her “unsuitable” as a business partner because of her financial dependence on her father, who provided 90 percent of the funds she contributed to the MGM casino in Macau, according to the report.
Rather than end its relationship with Pansy Ho, MGM agreed to a settlement with New Jersey to sell its interest in the Borgata Hotel Casino and Spa in Atlantic City.
Milton V. Peterson, chairman of the Peterson Cos., said he was aware of the situation in New Jersey when his company lined up MGM to operate the casino he envisions at his 300-acre mini-city on the Potomac River.
MGM is “one of the largest and most-respected operators in one of the most highly regulated industries in the nation,” Peterson said. “We . . . are confident that MGM will not have any difficulty in obtaining a gaming license from the state of Maryland.”