BOSTON — The investigative arm of the state gambling commission recommended on Monday that MGM Resorts be found suitable to proceed with a bid for a casino in downtown Springfield, provided company officials adequately explain to the five-member commission several concerns raised during a lengthy background check.
The Bureau of Investigations and Enforcement said its 10-month review did not find any factors that would disqualify MGM from doing business in Massachusetts.
The five commissioners will make the final decision on whether to find MGM suitable. Such a ruling would clear MGM to submit a final application for the sole western Massachusetts resort casino license. MGM would be the only applicant in the region.
The bureau’s report, more than 500 pages in length, flagged MGM’s handling of a criminal case involving former board member Terry Christensen, who was convicted in 2008 on charges linked to the wiretapping of billionaire investor Kirk Kerkorian’s former wife in a child support battle.
“Despite his indictment, resignation from the Board and ultimate conviction, Christensen was allowed to engage, on a repeated and prolonged basis, in certain sensitive and non-public corporate matters of MGM Resorts … including his attendance at Board meetings,” the report stated.
At a commission hearing on Monday, MGM officials, including chief executive James Murren, acknowledged mistakes in allowing Christensen to continue for a time in an advisory role to the company.
“I exercised poor judgment,” said Murren, who was the company’s chief financial officer at the time.
“It was a bad idea from the very beginning. None of us should have had any contact with (Christensen),” he said.
Roland Hernandez, an MGM board member and head of its audit committee, told the commission the company had taken corrective internal steps to make sure such lapses do not occur again.
MGM officials also fielded questions about its casino operations in Macau, a Chinese administrative region that has become the world’s most lucrative gambling market.
In New Jersey, regulators in 2010 found unsuitable MGM’s partnership with Pansy Ho, the daughter of a gambling kingpin with alleged ties to Chinese gangs, and the company was forced to divest its 50 percent stake in an Atlantic City casino.
Ho told Massachusetts investigators in an interview that she operated independently in her dealings with MGM and without her father’s influence or involvement, and was mostly involved in nongambling aspects of the Macau resort, according to the report.
Several other states including Nevada and Maryland have found MGM’s partnership with Ho, now a minority stakeholder in the casino, to be suitable, the report noted. New Jersey is also considering allowing MGM to re-enter Atlantic City.
Stephen Crosby, chair of the Massachusetts Gaming Commission, said he appreciated MGM’s candor in addressing questions from investigators. But he would not say how he expected the panel to rule on suitability. The decision was expected later in the week.
If MGM was cleared to be the only western Massachusetts applicant, it does not guarantee that they will ultimately receive a license, Crosby added.
“One applicant or 10, we will hold their feet to the fire to make sure we have a really good application,” Crosby told reporters during a break in the hearing.
Murren called Springfield a “great American city” that had been through a number of challenges in recent years, including the effects of the economic downturn and a tornado that ravaged the city in 2011.
“Citizens overwhelmingly approved MGM Springfield to be part of that recovery and I believe we can be part of the urban renaissance,” he said.
Click to read the suitability report.