The New York Times and The Wall Street Journal both rolled snake-eyes in covering MGM Mirage’s announcement earlier this month that it planned to build a massive casino-resort in Atlantic City, New Jersey. The MGM Grand Atlantic City would cost some $5 billion, “making it one of the most expensive casino projects in history,” according to the Times. The Journal included the announcement in its “What’s News” section on the front page. This proposal is a big deal, especially for Atlantic City, where casinos have been losing gamblers to out-of-state competition.

The Times presents the story as a boon to Atlantic City, telling us in the lede that an “otherwise dismal year for the Atlantic City casino industry turned a bit brighter” with the announcement. Brighter, yes. We are not arguing with the idea that a $5-billion infusion could do Atlantic City a lot of good. But a look around at other press coverage indicates that this announcement is not as simple as it seems. A cloud still hangs over the deal—a state probe into whether an MGM Mirage Chinese partnership is tied to organized crime—and neither the Times nor the Journal chose to include the information.

In 2005, the New Jersey Division of Gaming Enforcement opened an
investigation into MGM Mirage’s plans for a casino in Macau,
the Chinese gambling hub, looking into the company’s
partnership with Pansy Ho, daughter of Hong Kong billionaire
Stanley Ho, who is suspected of ties to organized crime—and of possible involvement in his daughter’s business deals.

New Jersey and other states have veto power over the Macau venture because MGM Mirage operates casinos in the United States. Mississippi regulators gave a go-ahead to the partnership in 2005 and Nevada did the same earlier this year. But New Jersey is stricter about such things, and its verdict is still out.

If Jersey rejects the Macau deal, MGM Mirage would likely pull out of the New Jersey project rather than give up Macau. Indeed, it’s possible that MGM Mirage released its Macau plans now to force the Jersey authorities to make a decision.

Other news outlets picked up on this idea.
“MGM Makes Well-Timed Move,” announces an article by Nicholas Yulico on The Street.com, which says:

MGM Mirage’s (MGM) announcement of a $5 billion casino development in Atlantic City just happens to come as the company is in a standoff with the city over licenses in Macau… Some industry watchers are wondering whether the timing of the announcement is designed to pressure New Jersey state regulators to speed up the much-delayed approval of the company’s license to operate a casino in Macau.

The Press of Atlantic City takes a similar approach in a smart story by
Donald Wittkowski headlined “MGM awaits findings of New Jersey investigation into Macau casino partnership.”

The Star-Ledger notes (1) that “the announcement comes at a peculiar time,” the same day the state released a report on September casino profits in Atlantic City, and the news was not good. Reporter Judy DeHaven also quotes Yvonne Maher, acting director of the New Jersey Division of Gaming Enforcement, who reassures the public that her Macau probe won’t be affected by MGM’s $5-billion offer to invest in Jersey. “Our investigation,” said Maher, “is independent.”

Interestingly, a story from the Dow Jones wire service, the Journal’s sister organization, also picks up on the Macau-Jersey tension.

The Las Vegas Sun pointed out that Atlantic City “famously denied” a gaming license to Hilton Hotels Corporation in 1985 over possible links to organized crime, a move that “stalled casino investments in Atlantic City for years.” Reporter Liz Benston closes her article with the observation that the newly announced MGM plans “make for a helpful bargaining chip while the Pansy Ho investigation hangs in the balance.”

The Journal and the Times are elite papers, but in this case they either didn’t do the reporting or chose to ignore important information.

1. MGM sees, raises A.C. mega-casino - $5B behemoth called key to saving resort
11 October 2007

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Elinore Longobardi is a Fellow and staff writer of The Audit, the business-press section of Columbia Journalism Review.