The taint of organized crime has until now barred Stanley from his ultimate prize: partnership with one of the U.S. gambling giants that are scrambling for dominance in Macao. In recent years, after the Chinese government reclaimed Macao and Hong Kong and invited foreign companies to take a slice of the pie, the Ho family has lost its virtual monopoly of the Macao casino business and has been struggling to redefine its commercial future. Because the aging, smoke-filled dens that made Stanley rich were having trouble competing with the island's glamorous new casinos, he sought a U.S. company that could help him build an impressive contemporary flagship. As a holder of one of a handful of precious casino licenses granted by the Macao authorities, he approached MGM about a possible joint venture in 2002.

MGM Mirage, which is majority owned by billionaire investor Kirk Kerkorian, couldn't afford to ignore Stanley's advances. Wynn Resorts and Las Vegas Sands had already struck agreements with two Macao license holders, and Stanley held one of the few remaining licenses.

But MGM and Stanley soon realized that his alleged triad ties would be an insurmountable bar with U.S. regulators. Nevada and New Jersey gambling authorities have the power to shut down casinos in their states if they find that the operators are involved with organized-crime figures anywhere in the world. Nevada derailed the deal with Stanley even before it was formally proposed, according to Pansy. MGM contends that it didn't negotiate with her father but acknowledges having discussed a joint venture with Hong Kong-based Shun Tak Holdings, which Stanley chairs.

So Stanley took advantage of a Macao legal loophole to create a so-called subconcession in the name of his daughter and protégée, Pansy—making her the official gambling-license holder and MGM's partner. Decades of allegations and investigations by numerous governments may have sullied his reputation, but Pansy was effectively clean, having never been named in any of the government or regulatory reports that accuse her father of ties to organized crime.

After Stanley gave her the subconcession, Pansy took over the MGM project in 2004. She negotiated with MGM for two years, frequently visiting its headquarters in Las Vegas to hash out problems face-to-face with chief executive Terry Lanni.

Lanni's participation underscores the importance of the deal to MGM, which operates 17 properties, including the high-end Bellagio, Mandalay Bay, and Luxor in Las Vegas. MGM is the world's second-largest gaming company, after Harrah's. But it has lagged behind rivals like Sands and Wynn in betting on Macao. The gaming industry on this sliver of an island, a former Portuguese colony with a population of about 530,000, is expected to become the biggest and most lucrative in the world. About 2.2 billion people live within five hours' flying time of Macao; some 22 million of them make the trip each year, and the numbers keep rising. Macao, which is a special administrative region of China, just like nearby Hong Kong, is the only place in China where gambling is legal. It has annual gaming revenue of about $8 billion, $1 billion more than Las Vegas and $3 billion more than Atlantic City. Many industry analysts predict the island will soon overtake the entire state of Nevada, which had $12 billion in gaming revenue last year.

By contrast, commercial-gambling growth may be topping out in the U.S. Revenue fell about 10 percent in New Jersey last year, the first decline since gambling was legalized in Atlantic City 30 years ago. MGM believes in the "development and growth of the Macao market," a spokesperson says. Without a presence in Macao, the spokesperson adds, the company's "ability to attract new high-end customers to Nevada would be compromised."

To deny approval, Nevada gaming authorities merely had to prove that Pansy had a close business relationship with her father—which is no secret—and that there was a strong possibility he might at some point become involved in her affairs with MGM. Nevertheless, after a two-year inquiry, Nevada approved the joint venture in February 2007. Several senior Nevada investigators who had argued against the deal were angry when their advice wasn't followed, and one was on the verge of resigning, according to a person with knowledge of the probe. Frank Schreck, a leading gaming lawyer and former member of the Nevada Gaming Commission, says that MGM is "very highly respected" in Nevada and its role as Pansy's partner "went a long way to ironing out any problems she may have faced" with gaming regulators.