This is the continuation of yesterday's answer, which you can read in the QoD Archives if you missed it (LVA members only).
Of all states, Missouri may be the most severe. It rejected Columbia Sussex in 2006 and, in 2000, had an epic brawl with Station Casinos over the conduct of lobbyist Michael Lazaroff, accused of improper ex parte contacts with state officials. As Missouri was moving to revoke Station’s license, the company sold its Show-Me State properties to Ameristar Casinos (and paid a $1 million fine), in a deal brokered by then-Station general counsel Troy Stremming. The latter would go on to become Ameristar’s senior vice president of governmental affairs and public relations.
The Station/Missouri brouhaha continues to have ramifications. Caesars Entertainment co-owners Apollo Management and Texas Pacific Group took control of Aliante Station by purchasing debt in the bankrupt property and rolling it into an ownership stake. Station stayed on for a year as manager. That relationship did not sit well with the Missouri Gaming Commission (Caesars owns a riverboat casino in Kansas City). Last summer, it ordered Apollo and Texas Pacific to liquidate their stakes in what is now Aliante Casino. Given a choice between Kansas City and a struggling, remote Vegas casino, it was a no-brainer. Apollo and Texas Pacific quickly complied.
So, when it comes to "strict," Missouri is probably the most hard-ass state in the nation. It also ixnayed Pinnacle Entertainment’s attempts to keep the unseaworthy President casino open, let alone move it to a new location. Pinnnacle eventually gave up and surrendered the license, which was re-bid and eventually won by Isle of Capri Casinos, which quickly built a new casino in Cape Girardeau.
As for New Jersey: No buyers have emerged for MGM Resort International’s half of Borgata. Due to the terms of MGM’s quasi-expulsion from the state (having been deemed unsuitable and given an ultimatum to sell its Macao properties -- or else), untold millions of dollars of MGM revenue are tied up in a state-controlled trust until a sale is consummated.
Also, new investors in Atlantic City have been hard to find. Hard Rock International recently shied away from a Boardwalk project and Trump Plaza just sold for a pittance: $20 million. So the Garden State’s newly liberalized attitude toward casino ownership may have more than a little to do with encouraging investment. In that light, a second look at the MGM question was almost inevitable. All of the ‘bad actors’ in MGM’s covert negotiations with Macanese kingpin Stanley Ho have either left the company, been cashiered, or have died. MGM could literally be said to be ‘operating under new management.’
However, Rational Group’s purchase of the Atlantic Club is anything but a done deal. Its subsidiary PokerStars paid a whopping $731 million settlement last summer – mostly to the Department of Justice – to make charges of money laundering and bank fraud go away. That is exponentially more grievious than anything of which MGM stood accused. Another Rational subsidiary, Full Tilt Poker, has its own history of trouble with Uncle Sam.
As former Caesars Entertainment corporate counsel Jason Gross told The Press of Atlantic City, "Both [Rational] companies had issues with U.S. law when, in 2011, the Department of Justice closed down their websites after they continued accepting U.S. bets. Here you have these two companies, both owned by Rational Group, that went farther than most companies, and it may create further issues." If the New Jersey Casino Control Commission green-lights Rational’s bid, it may have to twist itself into some elaborate rhetorical pretzels in order to explain why Rational is suitable when MGM and ColSux – neither of whom ever faced federal charges -- were not.
