MGM Told to Cut Ties With Macau and Pansy Ho

New Jersey regulators have told MGM they need to abandon a joint venture with Macau and Pansy Ho, accusing the later of being part of an organized crime family.

Pansy is the daughter of Macau casino czar, Stanley Ho. 

While only a recommendation now, this could become an ultimatum, with MGM either having to walk away from its investment in Atlantic City's Borgata Hotel or get out of Macau.

The state Division of Gaming Enforcement says Pansy Ho is "unsuitable" due to allegations surrounding her father, Stanley Ho. Pansy Ho has said she operates independently of her father.

Infamous as a polygamist, over the years Ho has publicly acknowledged that he has four wives who gave birth to 17 children. Ho handed over the reins of STDM to daughter Pansy.

Stanley Ho, the undisputed gambling czar of Macau has friends in high places in virtually every corner of the globe, the Asian Pacific Post once reported.

"But there is a dark side to the casino magnate, one which is secretly recorded in Canadian, American, British and Australian intelligence files.

"The intelligence data, which has been vehemently denied by Ho and his friends in high places, state the operations of the gambling king are intricately linked to Asian organized crime.

"A RCMP document called the Asian Organized Crime Roster has him listed as Triad leader while a similar American report put Ho on a watchlist.

"But all the alleged criminal connections are downplayed and Ho continues to build his global business empire with little hindrance and a lot of influence."

The New Jersey Casino Control Commission can order MGM to cut ties to Ho if it wants to continue doing business here. It hasn't ruled on the case.

The Borgata Hotel remains one of the only profitable properties in Atlantic City during the recession. Atlantic City's 11 land casinos have reported first-quarter gross operating profits down 38 percent on the same period in 2008, an Associated Press report reveals.  However, the Borgata witnessed a gross operating profit of $47 million for the quarter.  That was still down nearly 17 percent from last year.

On the other hand, the Associated Press this week reported that the "ace in the sleeve" for Macau is its relationship with Mainland China. 

It's the steady influx of risk-loving Chinese flocking to the only place in China where casinos are legal. Las Vegas, on the other hand, is saddled with a stagnant U.S. economy and glut of new casinos preparing to enter the market, the AP reported.

"We've seen better-than-expected performance in the overall gaming market of Macau," said Credit Suisse ( CS - news - people ) analyst Gabriel Chan. "Vegas is still suffering and will take a longer time to recover, but in Macau, we are beginning to see the light at the end of the tunnel."

Which will MGM choose?