Mgm

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.

MGM CEO Terry Lanni said that the New Democratic leadership in the U.S. Congress could provide a chance to explore legalization of online gambling.

A new U.S. law making it illegal for banks, credit card companies and online payment systems to process payments to online gambling companies "makes no sense whatsoever. The Republican Party simply pandered to the religious right."

Lanni would like to see a study commissioned to examine whether online gambling can be successfully regulated in the United State.
The American Gaming Association, of which Lanni is the current chair, is expected to decide in December whether to pursue legislation calling for such a study.

On the other side of the pond, more reasonable and more fiscally minded politicians are going for the regulation over prohibition in their laws.

"Britain wants to be second to none in regulation of Internet gambling ... We firmly believe that the way forward is to regulate, rather than prohibit," said Peter Dean, chairman of Britain's Gaming Commission.

Dean said that from a British perspective, the U.S. ban is puzzling, in that prohibition doesn't have a conspicuous record of success in the US or Great Britian.

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All of those dark conspiracy theories that erupted on the internet after the passage of the Unlawful Internet Gaming Enforcement Act were just rumors, right?

Well that a look at this:

"America’s MGM Mirage and Britain’s Ladbrokes, two of the world’s largest gambling groups, have started exploratory takeover talks with internet rivals decimated by recent US Congress legislation banning online gambling. MGM, the world’s second-largest gambling group, is understood to have contacted a number of players in the sector, including poker market leader PartyGaming, to discuss a takeover."

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