According to the New York Post, Carl Icahn, whose Icahn Enterprises owns the Trump Taj Mahal casino in Atlantic City, is in discussions with other casino operators to sell the property. The former center of east coast poker closed on October 10th.
Aside from making money, one of the reasons Icahn is looking to make a deal may be because he might not be allowed to re-open the casino for five years. Less than two weeks after the Taj Mahal closed, the New Jersey Senate passed S2575 by a 29 to 6 vote, an amendment which would add a reason why someone could be disqualified from holding a casino license. In this case, it would disqualify a licensee who closed a casino. Specifically, the amendment reads:
Notwithstanding the provisions of any law, rule, or regulation to the contrary, the substantial closure of a casino hotel facility by the licensee occurring on or after January 1, 2016 shall disqualify the licensee from continuing to hold that license and shall constitute sufficient cause for revocation of that license, except that such substantial closure shall not impact any other pre-existing casino license held by the licensee. The division shall determine what constitutes a substantial closure of a casino hotel facility pursuant to this section.
Last Monday, the New Jersey Assembly passed the bill by a 60 to 17 vote; it now goes to Governor Chris Christie for his signature, though it is not known if he will sign it. The above disqualification would last five years.
Considering the retroactive date in the amendment, this bill specifically targets Carl Icahn. The reason for this is the way Icahn took control of the Taj and the way he handled things after doing so. Trump Entertainment Resorts – the former owner of the Taj – went into bankruptcy proceedings in September 2014. Icahn, the company’s largest debt holder, took control of the Taj Mahal when the company emerged from bankruptcy in February of this year. During the bankruptcy proceedings, the Unite Here Local 54 union lost its pension and healthcare benefits.
This year, after Icahn took over, the Unite Here Local 54 tried to negotiate with his company and the operator of the Taj Mahal, Tropicana Entertainment, to get its benefits back, but Icahn was not agreeable to what the union was looking for. In July, the about 1,000 union workers went on strike and, citing the inability of the Taj Mahal profit because of the strike, Tropicana Entertinament President and CEO Tony Rodio announced a few weeks later that the Taj Mahal would close.
Some believed that after the closure, Icahn would try to re-open the casino using non-union labor so that he would not have to pay union benefits. Thus the reason for the bill.
Senate president Steve Sweeney, the sponsor of the bill, told the AP in June, “Casino owners shouldn’t be manipulating the system and exploiting bankruptcy laws as a way to break unions and take away the rights and benefits of the workers. Atlantic City’s gaming industry is obviously experiencing the difficult challenges of competition from other states, but the answer is not to engage in practices that punish the workers.”
If the bill becomes law, Icahn would be unable to re-open without re-negotiating with the union, which could very well be why he is looking to sell.