Casino Closure Legislation Passes In New Jersey

taj-mahal-casinoWhen last reported on, the ongoing saga of billionaire casino owner Carl Icahn vs. New Jersey was just heating up. To recap, Icahn had purchased the bankruptcy debt of the declining Taj Mahal Casino in Atlantic City for a steep discount on Feb. 26, 2016. After ten months of acrimonious negotiations with union Local 54 and not being able to settle a labor agreement, Icahn decided to shutter the casino and resort on Oct. 10, 2016. But two weeks before Icahn closed the Taj Mahal, on Sept. 29, 2016, the New Jersey Senate Budget and Appropriation Committee approved a bill as a stop-gap measure. The bill would prevent casino owners from closing and then re-opening a casino within a short period of time in an effort to skirt union labor agreements. The legislation was approved by the Senate on Oct. 20, 2016.

The measure has now been finalized by the New Jersey Assembly this past Monday, Dec. 19, 2016 by a 60-17 vote in favor. Before becoming law, final approval must come from Gov. Chris Christie who has not given any indication of favoring or opposing the bill. But because of significant majorities in both legislative chambers, if Christie opted to veto the bill, he can be overridden.

Details of the bill would impose a New Jersey casino license suspension of five years for an owner closing a casino. The bill is retroactive to January 2016 and seems to specifically target Carl Icahn and his Taj Mahal casino. Owners of four other Atlantic City casinos that have closed since 2014, but prior to 2016, will not be impacted by the bill.

Union officials have believed all along that after closing the Taj Mahal casino, Icahn was planning to reopen the casino with a non-union workforce and began petitioning legislators to prevent that from happening. That prompted the Senate to take action and to pass the anti-casino closure bill.

Senate President Steve Sweeny, architect of the bill, said the legislation was designed to prevent casino owners from “sitting on” licenses for years after closing their properties. Imposition of the five year license suspension would be lifted if at any time an owner reached a deal with the unionized workforce that was in place when a casino is shut down.

Assemblyman John Burzichelli said, “At the end of the day, this is designed to be a carrot, not a stick, by encouraging casino owners to remain open, rather than allowing them (to) hold onto their license while they shut down and leave thousands of working-class folks without a job.” He also noted that the bill aims to prevent casino owners from “manipulating the licensing system.”

Icahn continues to maintain that the new legislation is unconstitutional, as it only applies to him and prohibits him from making other investments in the Atlantic City market for five years.

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