MGM Resorts International and the investment arm of company founder Kirk Kerkorian will pay a combined $225,000 settlement to New Jersey gaming regulators to resolve old issues as part of an effort by the casino company to regain its Atlantic City gaming license.
The settlement between MGM Resorts, Los Angeles-based Tracinda Corp., and the New Jersey Division of Gaming Enforcement was agreed upon in July. An eight-page letter from from division director David Rebuck to the company’s Atlantic City attorney was recently posted to the agency’s website.
The settlement covers a nearly decade-old criminal case involving Los Angeles attorney Terry Christensen, a former MGM board member and a legal confidant to Kerkorian. The 97-year-old billionaire is MGM Resorts’ largest shareholder with roughly 18 percent of the company’s outstanding shares.
According to Rebuck’s letter, the casino operator consulted with Christensen on various company matters over the years following the lawyer’s 2006 resignation from the company’s board.
Rebuck said MGM Resorts agreed to pay $150,000 while Tracinda will pay $75,000 in lieu of a formal complaint being filed in the matter. The letter was dated July 28 but was only recently released by New Jersey gaming authorities.
“MGM and Tracinda have agreed to pay in recognition of the seriousness of the failures to address Christensen’s ongoing and continued involvement in their affairs following first his indictment and then his conviction,” Rebuck wrote.
Christensen and celebrity private investigator Anthony Pellicano were indicted and charged in 2006 with tapping the phone of Kerkorian’s ex-wife, Lisa Bonder Kerkorian, in 2002. They were convicted in a criminal trial and sentenced to federal prison for their roles in the wire tapping. Christensen was given a three-year prison term while Pellicano was given 15 years.
MGM Resorts is expected to appear in front of the New Jersey Casino Control Commission next month to seek reinstatement of its gaming license. The company has been attempting since last year to regain its gaming license in New Jersey, which was surrendered in 2010. State gaming regulators wanted MGM Resorts to sever ties with its Macau business partner, Pansy Ho, because of her family’s alleged connections to Chinese crime triads.
MGM Resorts placed its 50 percent ownership of the Borgata into trust while it attempted to sell the holdings. A sale never took place. The company also owns land adjacent to the Borgata, where it once planned to develop an MGM Grand-branded resort.
In an email Tuesday, MGM Resorts Senior Vice President Alan Feldman called the settlement “part of the process of cleaning up some old items prior to the licensing hearing next month.”
Nevada Gaming Control Board Chairman A.G. Burnett said Tuesday the agency and MGM Resorts conducted an investigation into the matter several years ago.
“This matter was reviewed by a previous board and was resolved by them,” Burnett said.
Much of the investigation into MGM Resorts by the Division of Gaming Enforcement was completed years ago, but any resolution was put on hold when the company backed out of the state. Boyd Gaming Corp. owns the other 50 percent of the Borgata and operates the resort.
With the re-application phase moving forward, New Jersey regulators and MGM Resorts are looking to close out old issues.
According to Rebuck’s letter, MGM Resorts continued to rely for advice, even after his criminal conviction.
“Christensen continued to be involved with MGM and Tracinda and matters related to them from the time of his indictment, following his conviction and through the fall of 2009,” Rebuck wrote.
Christensen maintained an office at Tracinda until 2009 and was consulted by MGM Resorts on several matters, including executive transition and compensation, the possible use of investment firm Goldman Sachs, the company’s dealings with CityCenter partner Dubai World, MGM Resorts board issues, and a potential strategic partnership with Malaysian casino developer Genting Berhad that never came to fruition.
Christensen had been a 40-year confidant, personal attorney and adviser to Kerkorian. He served on the MGM board for nine years and was president of Tracinda in 1987. He helped form MGM Grand Air and MGM Grand Corp.
Contact reporter Howard Stutz at email@example.com or 702-477-3871. Follow @howardstutz on Twitter.