You may have heard that last fall Dubai World invested a lot of money ($2.96 billion) to purchase 50% of the MGM City Center project in Las Vegas. Dubai World also purchased 4.75% of the common stock in parent company MGM Grand. Early this year Dubai World increased its holding in MGM and now has announced another round of stock purchases that will bring them to a 20% stake in MGM.
Nothing wrong with this, just business. In fact, in the current economic climate in Las Vegas and in the banking industry as a whole; MGM might not have been able to raise the necessary construction funds to finish the huge City Center project. However, with a partner like Dubai World the project continues to move forward while other Las Vegas gaming projects are delayed, canceled or put on hold.
Here is the problem, because MGM operates in several of the states of the United States, each state's individual gaming commissions has the right to approve each and every move by MGM and Dubai World. Nevada requires that Dubai World have a Nevada gaming license after owning 10% of the stock or 10% of any individual property. New Jersey requires approval for each increase in stock holdings; so representatives of Dubai World and MGM have been in New Jersey recently to gain that state's approval for the move to a 20% ownership. Michigan, where MGM has one casino, approved Dubai World increasing its stake to 14.75% back in April and now will need to approve the move to 20% ownership.
So here is my question: If they are not unsavory characters at 4.75%, why would they be at 20%. Why do these commissions need to be involved more than once? Isn't this more of the bureaucratic red tape that hinders business? Yes, of course, there are costs for each successive approval.
I won't even go into my rant about the 27 European Union member nations trying to collectively get out of the way of free enterprise and internet gaming.
About Dubai World:
Dubai World is a major investment holding company with a portfolio of
businesses that includes DP World, Jafza, Nakheel, Dubai Drydocks, Maritime
City, Istithmar, Kerzner, One & Only, Atlantis, Barney's, Island Global
Yachting, Limitless, Inchcape Shipping Services, Tejari, Technopark and
Tamweel. The Dubai World Group has more than 50,000 employees in over 100
cities around the globe.
Dubai World's iconic real estate projects include the Nakheel's Palm
developments and The World. The group also has extensive real estate
investments in the US, the UK and South Africa, unique hospitality
destinations in every corner of the world, and is a leading global port
operator. In the last five years, Dubai World has developed 80,000 luxury
residential villas and apartments and approximately three million square
feet of retail space.
