Rose prophetic re: Macao

While Las Vegas newspapers have been reticent regarding the regulatory can of worms opened by recent findings about the Macanese operations of Las Vegas Sands and MGM Mirage, veteran gaming legal analyst I. Nelson Rose has felt no such compunction. In a March note to investors, he wrote (in part):

“This is a major story, which will be carried in all media outlets. The timing is particularly bad, coming on top of the ruling in New Jersey that MGM’s Macau partner, Pansy Ho [above]. was unacceptable due do the alleged organized crime ties of her father, Stanley Ho, who controls SJM and most casinos in Macau. In that case, New Jersey made findings that so far Nevada has ignored, such as that 90% of Pansy’s money in her joint project with MGM came from Stanley. MGM had to choose between Atlantic City and Macau, and rightly, judged on finances only, went with China.  …  But these companies … have licenses in Nevada, Michigan, Mississippi and other states, that are now at risk, if any tie at all with organized crime is discovered. The Reuters story [regarding Sands] itself has major problems, including the fact that there was so little evidence against the main character, who may or may not have ties with LVS, that charges were never brought. It is doubtful there is enough here for the Macau government or the casinos operating there to do much in response to this news story, especially since gaming brings in so much money, and has recently had a spectacular rebound from the Recession. But state governments in the U.S. cannot ignore news like this. Even Nevada will have to open an investigation[*], due to fear that otherwise the U.S. federal government might get involved.”

* — Editor’s note: The Nevada Gaming Control Board has acknowledged it is conducting “an analysis” of the Sands case but says its “investigative product” is not yet “ripe.” Illinois has opened an investigation of the MGM matter, while Michigan and Mississippi are pondering whether or not to do the same.