NJ State Senator Says Caesars Buyout of Revel Would be Illegal
Despite rumors this week that Caesars Entertainment, a major stakeholder in the Atlantic City casino market – the company owns four properties in the ailing seaside gambling mecca – may be interested in making a play for Revel Casino, New Jersey State Senator Jim Whelan was quoted by the Press of Atlantic City as saying that he believes such a takeover would be in violation of the law.
Caesars, which controls Showboat, Harrah’s, Bally’s, as well as the company-named Caesars property in Atlantic City, is said to be in talks to purchase Revel, a casino that opened to great fanfare less than two years ago but found itself bankrupt within a year of opening its doors.
The Press reported that Caesars has not submitted a formal offer for Revel, which cost some $2.4 million to build.
Late last year, officials with Revel said that they were open to the idea of selling the property, which has been working to turn a profit amidst a difficult economic climate in the once-glorious east coast gaming capitol.
“Undue concentration” cited
State Senator Whelan, long a supporter of the Garden State’s gambling industry, and a backer of a new bill that, if passed, could render New Jersey an international online gambling hub, said that he was “extremely troubled” by the idea of Caesars taking over the newest land-based casino property in Atlantic City, a gaming center that in recent years has struggled in the face of ever-increasing pressure for gamblers from nearby states, most notably Pennsylvania.
Last November, a constitutional amendment was passed in New York, a state from which New Jersey draws a hefty number of gambling-based tourists, that will see the eventual construction of seven new brick and mortar casino properties in the Empire State. That development could serve to further depress the casino economy in Atlantic City, which has seen revenue drop every year since hitting its peak back in 2006.
The reason that Whelan believes that a Caesars takeover of Revel would not be legally sound is because the state has in place a law forbidding “undue economic concentration”, meaning that any one gambling company is forbidden from controlling too many casino properties within the Atlantic City area.
“The reality is, Caesars just bought the Atlantic Club and closed it when there were other parties willing to keep it open. This is bad for the region. It’s bad for Atlantic City, and more importantly, it’s against the current law,” Whelan was quoted as saying.
Caesars only recently purchased another struggling Atlantic City property
Last month, Caesars, in partnership with Tropicana Entertainment, purchased the then-bankrupt, now-closed Atlantic Club at auction.
Tropicana agreed to take possession of the Atlantic Club’s slot machines and table gaming equipment, while Caesars gained the hotel property in the bargain.
The two companies were said to be motivated to take over the long-flagging Atlantic Club – once one of the most profitable in Atlantic City, having been developed by none other than Steve Wynn himself back in the early 1980’s – as a means of reducing competition in Atlantic City, which now has eleven land-based casinos with the shuttering of the Atlantic Club.
The Atlantic Club closed its doors earlier this month, and with the removal of its gaming equipment down to its decorative plants, so too went more than 1,600 jobs.
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