In an interesting move from the New Jersey casino industry, state lawmakers did not succeed in overriding a veto from Governor Chris Christie. Just this week, New Jersey’s senate was expected to override a veto relating to a bill that would have punished billionaire Carl Icahn and ultimately strip him of his state casino license.
It was widely expected that the Bill would pass by way of the veto override, however enough support was not garnered. In many respects, New Jersey is now back to square one with regard to this situation.
This past December, New Jersey lawmakers decided to set their sights on a piece of legislation aimed at punishing casino operators who halted or otherwise altered operations in Atlantic City after January of 2016. Though the bill existed to punish anyone who halted casino operations, it was no secret that this piece of legislation was really being aimed at billionaire Carl Icahn.
The bill works by stripping casino operators of their casino licenses for 5 years should they shut down casino operations (or, if they halted casino operations at any point past January 2016). The bill came about after Icahn shut down the Taj Mahal. Icahn’s decision to close the Taj’s doors came about after he failed to reach an agreement with the local casino workers’ union. Immedaitely after closing, the number one concern on the part of lawmakers was that Icahn would circumvent the union’s disagreement by simply reopening the casino and staffing it with nonunionized employees.
Christie was and still is opposed to this piece of legislation primarily because it appears to be very blatantly aimed at one person in particular. When you think of it in simpler terms, the New Jersey Senate seems to be doing everything in their power to punish Icahn from making a business decision that he is well within his right to make. This is not how a democracy works and Christie will not support instituting laws that seem to only apply to one person.
Though Icahn originally planned on reopening the casino, it seems as though he is now pursuing a plan that will see him sell the property; even if it means selling at a loss. This seems to be working against the state of New Jersey as a whole, because now, instead of seeing $100-$200 million invested into the property with the goal of resuming operations, the building is going to sit vacant for even longer. Even if the property was sold tomorrow, the new owner would need to become licensed, and that is not something that happens overnight. In addition, the new owner would also be forced to attempt to strike a deal with the local casino workers’ union, and that is clearly not a very simple task.
We will continue to follow this story as the fate of the Taj Mahal is still up in the air. Atlantic City’s casino industry has not exactly been thriving in recent history, and episodes such as this do a lot in explaining why that is so. What’s more, with legislation like this being considered, there is very little reason for a person or group to want to become involved in the New Jersey casino industry.