The lucrative operations enjoyed in Macau by MGM Resorts International, Las Vegas Sands and Wynn Resorts could prove an obstacle to their desire to expand into Canada’s largest city.
News reports out of Toronto, where all three have expressed interest in acquiring a license for a resort-scale casino, indicate their business dealings in the Chinese gambling enclave may come under scrutiny.
“Are the companies appropriately competing for a casino in Ontario? Do they have the regulatory clearance to even bid on a casino in Ontario?” asked Toronto City Councillor Adam Vaughan, who opposes a casino in his downtown district.
By law, Ontario regulators can deny a gambling license if there are “reasonable grounds” to believe that a company’s track record, in any jurisdiction, suggests it would not act with “integrity, honesty, or in the public interest.”
Once formal bids are submitted to the Ontario Lottery and Gaming Corporation, the province’s Alcohol and Gaming Commission decides whether casino directors, senior managers and major shareholders meet the requisite ethical standards. “We would be contacting other jurisdictions to see if there are any issues that might preclude the applicant from being issued a registration,” said Lisa Murray, a commission spokeswoman.
Those jurisdictions include Atlantic City, where MGM—which has been lobbying heavily for a casino at Toronto’s downtown Exhibition Place— placed its 50% stake in the Borgata casino up for sale after New Jersey regulators found the company’s Macau business partner Pansy Ho “unsuitable” by New Jersey standards. The finding, issued three years ago, was made on the basis of Ms Ho’s ties to her father, Macau casino tycoon Stanley Ho, who is alleged to have had triad associations.
MGM is now seeking to rescind the sale and return to the Atlantic City market.
The issue for Las Vegas Sands concerns ongoing investigations in the United States by the Justice Department and the Securities and Exchange Commission in connection with the company’s past business dealings in China. In the 1st March filing of its annual report the company acknowledged possible violations of the accounting and bookeeping provisions of the US Foreign Corrupt Practices Act, which forbids US companies from bribing officials of other governments.
Wynn Resorts, meanwhile, could face questions in Toronto surrounding a US$135 million endowment to the University of Macau, which has been the subject of several investor lawsuits in the United States and an investigation by the SEC. The donation also has been challenged by Wynn’s co-founder and formerly its largest shareholder, Kazuo Okada, who heads Japan-based gaming machine manufacturer Universal Entertainment. Mr Okada’s stake in the company was forcibly bought out last year after a falling out with the board of directors over his investment in a casino project in the Philippines.
Wynn has not made a formal proposal for a Toronto casino but expressed interest in one in a letter sent to city officials earlier this month.
