MGM Divesting Borgata Stake

MGM Mirage plans to sell its 50 percent stake in the Borgata Hotel Casino & Spa in Atlantic City, N.J., over organized crime concerns.

The company will have 30 months to complete the sale, which could bring in between $200 million and $500 million, analysts told the Wall Street Journal.

MGM reached the sale agreement with the New Jersey Division of Gaming Enforcement after the department called the Las Vegas company’s joint partner, Pansy Ho of Macau, “unsuitable.” Ho’s father has been accused of ties to Asian organized crime.

“We have the utmost respect for the DGE but disagree with its assessment of our partner in Macau,” MGM chair and CEO Jim Murren said in a statement. “Regulators in other jurisdictions in which we operate casinos have thoroughly considered this matter and all of them have either determined that the relationship is appropriate or have decided that further action is not necessary.

“Since the DGE takes a different view, we believe that the best course of action for our company and its shareholders is to settle this matter and move forward with the compelling growth opportunities we have in Macau,” he said.

The New Jersey Casino Control Commission was set at press time to review the divestiture and rule whether MGM is fit to do business in the state. Borgata co-owner Boyd Gaming would reportedly have right of first refusal to purchase MGM’s stake.