Kirk Kerkorian Built both Caesars Palace and the MGM Grand
MGM Resorts International this week paid the New Jersey Division of Gaming Enforcement $225,000 in a settlement of a decade-long issue. The payment is seen as an attempt to clear the way for MGM Resorts to regain its gaming license in New Jersey.
Kirk Kerkorian and Terry Christensen
The legal interactions of a former MGM board member with Kirk Kerkorian, the 97-year old casino developer who bought Metro Goldwyn Meyer in 1969 and opened the MGM Grand in 1973, was at the heart of the issues. Kerkorian still owns 18% of MGM Resorts International, which makes him the single-largest shareholder in the company. He relinquished control of the company in 2009, but New Jersey regulators have long had concerns about his continued involvement with Los Angeles attorney Terry Christensen.
Terry Christensen is a former MGM board member. He left the board in 2006, after he was indicted. Despite the indictment, Christensen has remained a legal confidant to Kerkorian, which had long concerned New Jersey regulators. The payment of the fine by MGM Resorts therefore recognizes the seriousness of the issues, as well as the offense given by refusing to come to terms years ago.
David Rebuck Statement
New Jersey Division of Gaming Enforcement Director David Rebuck issued a statement after the settlement was announced. In the statement, Rebuck said, “MGM and Tracinda have agreed to pay in recognition of the seriousness of the failures to address Christensen’s ongoing and continued involvement in their affairs following first his indictment and then his conviction.”
Tracinda Corporation is the private investment corporation of Kirk Kerkorian. It is through Tracinda Corp that Kerkorian owns the 18% share of MGM Resorts stock. MGM Resorts agreed to pay $150,000, while Tracinda will pay $75,000. The agreement occurred on July 28, though the announcement of the settlement happened only this last week.
Pellicano Wire Tapping Case
The case which provoked years of acrimony was the Anthony Pellicano case, in which celebrity private investigator Pellicano and lawyer Christensen were indicted and charged with illegally tapping the phone of Lisa Bonder Kerkorian, ex-wife of the MGM Resorts founder, back in 2002. The two men ultimately were convicted of the crime. Anthony Pellicano received a 15-year sentence, while Christensen received a 3-year sentence for his role in the case.
Despite the conviction, rumors continued that Kerkorian had used Terry Christensen as a consultant on various deals over the years. Because it could be assumed Christensen had a significant, if unofficial, role in running the company, the DGE did not want to reinstate a license for MGM Resorts. The case itself is not what caused the license to be surrendered in the first place, though.
Pansy Ho Ties
In 2010, the Division of Gaming Enforcement took exception to MGM’s ties to Pansy Ho. Pansy Ho is the daughter of Stanley Ho, the so-called “King of Gambling” in China. Stanley Ho has been involved in the Macau gaming industry since 1961–it can be said with some truth that he founded Macau’s gaming industry. He became one of the most notable Chinese billionaires, but rumor have plagued Mr. Ho that he has ties to Chinese organized crime.
The New Jersey DGE believed that Pansy Ho was simply a proxy for her father, so they wanted MGM Resorts to sever its ties with her in 2010. Instead, MGM surrendered its gaming license. Subsequently, the state of Massachusetts has reviewed MGM Resorts’ Chinese ties and determined that Pansy Ho does not have enough of a role in the decision-making of MGM Resorts to warrant concern. In fact, the Massachusetts Gaming Commission issued a license to MGM for a still-to-be-built land-based casino, though the future of that development is in doubt, because of a coming November referendum in which the people of Massachusetts could vote down land casinos altogether.
MGM’s Plans for New Jersey
Perhaps to hedge its bets, MGM Resorts would like to regain its license in New Jersey. Unlike 2010, New Jersey has online gambling. More importantly, Atlantic City has lost four casinos in the past 9 months, and MGM may be considering a new gaming development.
At the time it surrendered its gaming license, the company owned 50% of the Borgata Casino in Atlantic City. That 50% share of the city’s most profitable casino was put in trust, a financial arrangement which still holds to this day.
Next month, representatives of MGM Resorts will go before the Division of Gaming Enforcement in hopes of regaining its license. Not only would this give the gaming company more say in day-to-day operations, but MGM Resorts owns land adjacent to Borgata–land it once wanted to use to build an MGM-branded casino resort. With Revel Casino, Showboat, Trump Plaza, and the Atlantic Club no longer competition, Kirk Kerkorian’s company might see the time as right for building that MGM Atlantic City Casino.
