MGM's China Connection Shadows Springfield Casino Project

Nov 1, 2013

A decision on whether MGM Resorts International is suitable to hold a casino license in Massachusetts is expected to be made by gaming industry regulators in the next two months.  Passing the mandatory background investigation in Massachusetts is proving to be no easy feat.

Credit MGM Springfield

       When casino industry giant Caesars Entertainment, which has stakes in more than 50 casino operations in the United States and seven countries, was abruptly dropped  two weeks ago    as the operator of a proposed Boston casino, it rang alarm bells in Springfield.

       Investigators for the Massachusetts Gaming Commission flagged a business relationship Caesars had with a person who was tied in published and other investigative reports to the Russian mob. The investigators were set to recommend the full commission determine Caesars to be unsuited to operate a casino in Massachusetts. 

       The owners of the Suffolk Downs Race Track are now looking for a new casino operator as they pursue a state license for a $1 billion development in East Boston.

       Springfield City Council President James Ferrera sent a letter to Massachusetts Gaming Commission Chairman Stephen Crosby seeking advice on what options are available if Springfield’s chosen casino developer MGM cannot pass the background check.

       Concerns about whether MGM can pass the background check in Massachusetts revolve around its partnership in a Macau casino with Hong Kong businesswoman Pansy Ho, whose father has been linked with Chinese organized crime.

       New Jersey casino industry regulators in 2009 found Ho to be an unsuitable business partner for MGM and moved to block the relicensing of an Atlantic City casino.  MGM is contesting the New Jersey findings and MGM Chairman James Murran, at news conferences in Massachusetts, has defended the partnership with Ho in MGM Macau.

       MGM officials believe their prospects for a casino license in Massachusetts were improved with a recent suitability decision in the company’s favor by Maryland gaming regulators. Investigators in Maryland not only looked into MGM’s dealings with Ho but also, according to the Washington Post, investigated former board member Terry Christensen who was convicted in 2008 on federal wiretapping charges.

MGM is proposing to build an $800 million resort casino that promises to transform Springfield’s struggling downtown, create thousands of jobs, and deliver millions in badly needed tax revenue.  The project was selected by Mayor Domenic Sarno over a competing casino proposal, and was endorsed by Springfield voters in a referendum in July.

Sarno says  MGM was fully vetted by his administration and his hired casino consultants and he has full faith in the company.

       MGM is competing with Mohegan Sun for the lone casino license available in western Massachusetts.  Mohegan Sun is proposing a nearly $1 billion  resort casino development in rural Palmer

       The Connecticut-based casino operator passed its background check in Massachusetts and will be eligible to file a final application with the gaming commission for a casino license if Palmer voters endorse the project on November 5th.