The Hard Rock Hotel and Casino in Atlantic City was just recently hit with a fine from state gaming regulators due to an alleged violation of the Casino Control Act. While fines and penalties are par for the course in many highly regulated industries, this particular enforcement action arose after the casino allegedly failed to follow proper regulatory procedures for a very important employment decision. And given that the Hard Rock is relatively new to the Atlantic City gambling scene, this early enforcement action may foreshadow more trouble to come to the popular rock-and-roll themed entertainment franchise.
New Jersey’s Casino Control Commission granted Hard Rock’s casino license back in May, and gaming operations began June 27th of this year. Within a few months, the Hard Rock became the third-highest earning property in Atlantic City. Needless to say, things were looking good for the decades-old franchise. This is especially true given that it is one of only two Atlantic City Casinos that does not provide a floor for sports betting, which has been booming recently. But, just as every gambler knows, lady luck is a fickle lass, and even a casino’s fortunes can take a turn for the worse.
The Casino Control Act is a New Jersey state law regulating commercial gambling operations. It requires casinos to petition for qualification and licensure and imposes a suite of requirements on their operations. Among other things, the law requires casinos to alert regulators of important changes in select management positions. This is necessary in order for regulators to have the opportunity to properly vet important figures in Atlantic City’s gambling industry.
The New Jersey Division of Gaming Enforcement (“DGE”) just recently slapped the Hard Rock with a $5,000 fine for the casino’s failure to properly notify regulators about the appointment of a marketing executive. Specifically, Hard Rock International did not properly petition for qualification or notify regulators when it appointed Mann Lien as the company’s newest Properties Vice President of Asian Marketing. Even though Mr. Lien began his employment on July 9th of this year, and the DGE was not notified until late October. In fact, it wasn’t until October 30th that Hard Rock actually petitioned for a qualification waiver for Mr. Lien’s appointment, meaning that the casino was out of compliance with the Casino Control Act for several months.
Several months of non-compliance with local gambling regulations would land just about anybody in serious hot water, but Hard Rock has responded to the situation well. The casino admitted to the violation and agreed to pay the $5,000 fine. And while this has helped put the issue to rest on the regulatory side, it’s also caused Hard Rock to get a late start in the increasingly-competitive sports betting market. This is a frustrating turn of events for the up-and-coming AC hot spot, but it may not necessarily prove too detrimental for the casino in the long-term.
Hard Rock recently partnership with Gaming Innovation Group and Kindred Group for the launch of an omni-channel sports book platform, which they expect to be released at the end of this year. The new project has fans of sports betting, table games, cards, and the Hard Rock brand itself, on the edge of their seats. It is too early to know whether this early setback will have a detrimental effect on the Atlantic City casino in the future, but Hard Rock most certainly still has a few tricks of its sleeve regardless of what’s going on in the regulatory world.