Nevada regulators give final OK for MGM partnership in Macau

Las Vegas (AP) – Nevada gambling regulators signed off Friday on a partnership between two daughters of Hong Kong billionaire Stanley Ho and casino giant MGM Mirage Inc. in a Macau hotel-casino.

Pansy Ho, 44, told the Nevada Gaming Commission that she and her business associate and sister, Daisy Ho, 42, were independent in the venture from their father, who has long controlled casinos in the Chinese enclave and has been shadowed by allegations of ties to organized crime.

„I was concerned about the source of funds,“ commission Chairman Peter Bernhard said before the five-member board gave its unanimous approval.

Afterward Bernhard said he was satisfied with assurances from Pansy Ho and Daisy Ho that they had no „explicit or implicit“ agreement that their father would reap any benefit from Pansy Ho’s 50-50 partnership with MGM Mirage, the world’s second-largest casino company.

Approval by the commission in Nevada was a key step for the Las Vegas-based company to open the USD 1.1 billion MGM Grand Macau later this year in the rapidly expanding gambling market just a short ferry ride from Hong Kong. MGM Mirage also plans to build a second hotel-casino in Macau under the same partnership.

Nevada gambling law prohibits state license holders from violating gambling laws abroad and from forming „unsuitable“ associations that „reflect discredit or disrepute upon this state.“

That broad definition gave Nevada regulators the power to spend two years probing Pansy and Daisy Ho’s background and financial dealings.

„I don’t see anything that would bring discredit to the state of Nevada,“ Commissioner Arthur Marshall declared, making it clear that regulators were not issuing a license but making a „finding of suitability“ of the partnership.

Stanley Ho’s estranged younger sister, Winnie Ho, submitted documents opposing the partnership. Marshall said the information she provided through lawyers had been considered.

Pansy Ho and Daisy Ho control a majority of shares with their father in the Macanese transportation and hotel conglomerate Shun Tak Holdings Ltd.

Pansy Ho referred in Friday’s four-hour commission hearing to what she called „a unique upbringing in a complex family structure.“ Daisy Ho spoke of her father making a number of introductions for her in her early years in banking.

MGM Mirage chief executive Terri Lanni, who reminded the commission that MGM Mirage is the state’s largest employer and taxpayer, vouched for the women as „strong, experienced, talented and trustworthy.“

Gary Jacobs, company executive vice president and general counsel, said the partnership with the women in MGM Grand Paradise Ltd. was carefully crafted to prevent influence by a third party.

„No decisions of importance in MGM Grand Paradise can be made without MGM Mirage,“ Jacobs said, adding that information about operations in Macau will be made available to Nevada regulators.

„Our view is, licensees are responsible to regulators for what they do, wherever they do it,“ Jacobs said during a break.

Pansy Ho said outside the hearing that she felt Nevada regulatory approval „allows Macau to have a clean slate and really start fresh.“

Bernhard noted that the commission was invoking its power under state „discredit or disrepute“ statutes for the first time. He focused several pointed questions on defining the reach of Nevada gambling regulations in other states and in foreign countries.

„Is this something we should consider for all our licensees in foreign locations?“ he asked, summarizing the issue during an interview, „or just this one?“

„Gaming today is not just Nevada,“ MGM Mirage lawyer Robert Faiss said in answer to a similar question posed by Commissioner Sue Wagner.

Indeed, two of MGM‘s Las Vegas-based competitors, Las Vegas Sands Corp. and Wynn Resorts Ltd., have resorts in Macau and plan to open more.

Gaming Commission approval for the Pansy Ho-MGM Mirage deal was the final step in Nevada. The Mississippi Gaming Commission approved the alliance in February 2005. New Jersey is examining the arrangement.

Stanley Ho continues to dominate in the former Portugese colony, where he held a gambling monopoly for four decades until liberalization in 2002. He vigorously denies any ties to organized crime, and no clear evidence has been produced.

His business empire controls land, hotels, 17 casinos, and a helicopter and ferry service that keeps visitors coming. Forbes magazine estimated his wealth at USD 6.5 billion, making him the world’s 84th richest person.