The request, disclosed earlier this week in an SEC filing, stated that DGE had found the joint venture partner in Macau "unsuitable" and recommended that the MGM "disengage itself from any business association with its Macau joint venture partner."
In the filing, MGM Mirage stated that the DGE report is a recommendation and not binding. According to the filing by MGM, the final decision rests with the commission, which has not taken any action in regard to the report and has yet to schedule a hearing.
"The company does not believe that the report will have a material adverse effect on it. However, since the report was issued on May 18, it is still being reviewed by the company and may be the subject of a hearing by the New Jersey Commission; therefore; no assurance can be given as to the ultimate impact of the report," stated MGM in the SEC document.
A spokesperson for the NJ Casino Control Commission said, the commission has received the DGE report, will review it and schedule an appropriate hearing at a later date and that the DGE, as part of its duties, routinely investigates licensees and applicants to see if they qualify under the casino control act.
MGM's partner in Macau is Pansy Ho, managing director of Shun Tak Holdings Ltd. She is also the daughter of Stanley Ho, a Hong Kong billionaire who allegedly has ties to Chinese organized crime.
In a note, JPMorgan gaming analyst Joseph Greff questioned what impact DGE's recommendation would have. "Does that mean MGM will sell its 50% joint venture interest in MGM Grand Macau, keep Macau and sell Borgata so that MGM has Macau market exposure?" he wrote. "Will MGM be required to do nothing and hope that other state gaming regulators do not act on it?"
This week, the Las Vegas-based gaming company completed the sale of $1.5 billion of senior secured notes as well as the sale of more than $1 billion of common stock.
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