New Jersey vows to make November online launch, but will MGM make the grade?

TAGs: casino control commission, david rebuck, division of gaming enforcement, kirk kerkorian, MGM Resorts, New Jersey Online Gambling, Terry christensen, wiretapping

mgm-resorts-wiretappingNew Jersey Division of Gaming Enforcement (DGE) director David Rebuck has set the bar high for his state’s online gambling market. Rebuck recently told poker blogger extraordinaire Diamond Flush that the Garden State is determined to make its self-imposed mid-November ‘go live’ date for its online gambling regime, and that it will be “not only the best system in the country, but in the world.”

Rebuck acknowledged that there was no shortage of skeptics who viewed New Jersey’s “aggressive timeline” as unmanageable, but the director claimed his staff had begun working on the regulatory nuts and bolts ever since the December 2011 Department of Justice rethink on the scope of the Wire Act. Rebuck said the proposed timeline had required the DGE to make “significant demands on the casinos” to get their ducks in a row, but to their credit, “they have all come through.”

The casinos may not find that commitment entirely reciprocated. New Jersey regulators’ focus on getting their online gambling system up and running means they have to put other tasks on the backburner. For example, MGM Resorts, which shares ownership of Atlantic City’s market-leading Borgata casino with Boyd Gaming, is trying to get its New Jersey gaming license reinstated so it can play in the online gambling pool. In 2010, MGM chose to walk away from Atlantic City rather than ditch its MGM China partner Pansy Ho, who had been deemed ‘unsuitable’ by New Jersey regulators, but the passage of New Jersey’s online gambling legislation this February – and MGM’s apparent inability to find a buyer for its half of the Borgata – caused company execs to rethink their position.

MGM and Boyd have teamed with pan-European operator digital entertainment to participate in New Jersey’s online market, and while COO Corey Sanders told analysts last week that MGM’s relicensing process was “moving forward,” he also warned that regulators were dealing with a “bandwidth issue” i.e. there were only so many hours in a day. Sources close to the state’s Casino Control Commission have since told GamingToday’s Phil Hevener that MGM’s relicensing bid wasn’t likely to appear on the CCC’s agenda before early 2014.

MGM’s licensing worries may extend beyond the alleged whiff of Asian triad activity surrounding Stanley Ho’s daughter. On Tuesday, the Wall Street Journal’s Alexandra Berzon reported that MGM is getting a hard look from regulators regarding former board member Terry Christensen (pictured above), who resigned after being indicted in 2006 (and convicted in 2008) for his involvement in the illegal wiretapping of the ex-wife of billionaire Kirk Kerkorian, who currently holds 18.6% of MGM’s stock via his investment firm Tracinda Corp.

A 2009 MGM internal investigation has come to light, allegedly revealing that Christensen continued to advise MGM execs on business matters following his indictment and resignation. One of those execs, corporate strategy president Gary Jacobs, subsequently tendered his own resignation, reportedly as a result of that internal investigation, although this wasn’t revealed at the time as the reason for Jacobs’ departure.

Christensen’s attorney claimed to be unaware of any involvement between his client and MGM following Christensen’s indictment/resignation while an MGM spokesperson declined comment. Berzon’s sources said the Christensen matter could be a “potentially significant issue” for regulators pondering MGM’s pending licensing efforts not only in New Jersey, but also in Massachusetts and Maryland.


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