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The winners included a union whose members were willing to lose their own jobs to stand up to Taj owner and billionaire investor Carl Icahn. And, a Native American tribe that had been toying with the idea of expanding its gambling operations to New Jersey will finally get to the Jersey shore.
The losers in the deal could include competing casinos that are just beginning to see the benefits of a slimmed-down gambling market in the resort town. Icahn, too, because he took a large loss on his ownership of the casino.
On Wednesday, Icahn sold the Boardwalk casino that was opened by President Donald Trump in 1990 to the Florida-based Hard Rock. The sale came four months after Icahn shut it down amid a crippling strike.
Unite Here Local 54
The main Atlantic City casino workers’ union went on strike July 1 against the Taj Mahal after it could not reach a deal with Icahn to restore employee health insurance and pension benefits that were terminated in bankruptcy court. With no end to the walkout in sight and losing millions of dollars a month, Icahn shut the casino down on Oct. 10. Many of the union members said they were prepared to lose their jobs rather than accept a two-tiered benefit system different from the city’s other casinos. Now, many of the nearly 3,000 workers who lost their jobs could be rehired when Hard Rock Atlantic City opens in spring 2018.
The company, which manages gambling and resort operations for Florida’s Seminole Indian tribe, has been toying with the idea of expanding to New Jersey for years. It announced a plan in 2011 for a small music-themed casino at the southern end of the Boardwalk — then soon abandoned it. It made an unsuccessful bid on the former Revel casino while it was in bankruptcy. And, it sought and received prequalification for a New Jersey casino license in 2015.
Hard Rock proposed building a casino at the site of the Meadowlands Racetrack with owner Jeffrey Gural, but a statewide referendum to allow casinos outside Atlantic City was crushed by voters last November. Language in the referendum would have given existing Atlantic City casino operators first crack at one of two casino licenses in northern New Jersey. On Thursday, state Sen. Paul Sarlo, one of the authors of that bill, would not commit to a similar clause in any future referendum.
The Showboat (and Revel/Ten?)
Philadelphia developer Bart Blatstein last year reopened the former Showboat casino as a non-gambling hotel. But foot traffic on the northern end of the Boardwalk has been sparse since the Showboat and Revel closed in 2014 and the Taj Mahal joined them last year. A reopened casino at the former Taj site would bring new life and pedestrians to an area that has resembled a ghost town in recent years. (There’s no indication when — or even if — Revel will reopen as the rebranded TEN resort, with owner Glenn Straub neck-deep in multiple disputes with state agencies.)
It’s not a role the sharp-elbowed investor is accustomed to, but it is hard to see his association with the Taj Mahal as anything other than a swing and a miss. The idea was to have a second casino hotel to complement his Tropicana casino in Atlantic City. But it didn’t go as envisioned; Icahn told The Associated Press in January he had lost $300 million on the Taj Mahal. (No sale price was revealed.)
The seven casinos currently operating in Atlantic City (there were 12 three years ago) have just begun to adjust to the slimmed-down market, with revenue starting to inch up with less competition. The addition of another casino, particularly a successful one with a globally known brand, could upset that delicate equilibrium and revive talk of an oversaturated market. And even though it could benefit from additional foot traffic, Straub’s TEN would be competing with Hard Rock for customers on the northern end of the Boardwalk.
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