Is Icahn Being Targeted For Closing Taj Mahal Casino?

taj-mahal-casinoThe Taj Mahal Casino, owned by billionaire Carl Icahn, was closed down on October 10, 2016 after a prolonged worker’s strike by union employees from Local 54. Icahn took over the Taj Mahal on February 26, 2016 after purchasing the bankruptcy debt at a steep discount. But after not being able to settle a labor agreement with Local 54, the resort casino could not return a profit and Icahn closed the doors.

Icahn’s intent was to either sell the property or re-open at a later date. Most likely, he would re-open when he could get a favorable labor agreement from a non-union workforce. After all, he did buy the casino with the intent to make a profit. But, as reported on on September 29, 2016, the New Jersey Senate Budget and Appropriation Committee had approved a bill that would discourage casino owners from closing and re-opening to skirt labor agreements. Now the bill is in the state Senate, with a vote scheduled for October 20, 2016.

Tony Rodio, who operates Icahn’s Tropicana casino and also ran the Taj Mahal casino, said the bill is a blatant punishment foisted on Icahn for closing the Taj Mahal. The bill specifically targets Icahn because it will be enforced retroactively to Jan, 1. 2016. The Taj is the only casino to close this year.

Rodio said that, “Punishing Mr. Icahn by revoking his ability to reopen the Taj Mahal Casino or making further investments in Atlantic City for five years, as well as restricting his ability to sell the Taj, is unconscionable especially in light of his record in saving the Tropicana. It is particularly ill-advised because with this legislation Carl Icahn’s ability to further invest in Atlantic City has been constrained and the possibility of creating additional jobs, as he did at the Tropicana, has been seriously limited.” Rodio also warned that future investors would be dissuaded from investing in New Jersey because of the state government involvement in the collective bargaining process of Atlantic City casinos.

Bob McDevitt, President of Local 54, suggested that Icahn should swear that he will re-hire all the former Taj Mahal workers if the casino re-opens. McDevitt said that, “The people of Atlantic City fought like hell in 1976 to get casino gaming here because they wanted good middle-class jobs in the hospitality industry. It’s OK if billionaires come into Atlantic City and get even richer from the industry. But everyone has to benefit, and that’s what they all forget.”

The bill, sponsored by Senate President Stephen Sweeney who is also a union official, and Deputy Speaker John Burzichelli, also gives state gaming regulators the authority to require casino license holders to abide by certain standards.

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