New Jersey Casino Control Commission Can’t Make the Owners of Atlantic City Casinos Keep Them Open

New Jersey Casino Control Commission says it can’t force Atlantic City casino owners to keep their destinations open.

It’s no secret that Atlantic City casinos are in deep trouble, with some of them already closed down, and some on the brink of closure. And now a report in American gambling news says that there are additional troubles for the two endangered casinos.

New Jersey Casino Control Commission, the upkeeper of American gambling laws in the state, says it’s out of their power to force owners to keep their casinos open. One of the owners was quick to react stating that he’s moving on with the plans of shutdown.

Control Commission’s involvement

There’s little hope for the two Atlantic City casinos scheduled to close this summer

• According to American gambling laws, owners can’t be forced to keep them open

• Such an action was requested from the New Jersey Casino Control Commission

• Three state politicians asked the commission to address the issue in a letter

Last month three state lawmakers from Atlantic City have turned to New Jersey Casino Control Commission asking them to come up with a piece of legislation to keep the Trump Plaza and the Showboat casinos open after their scheduled shutdown dates later this summer.

On August 1st, commission Chairman, Matthew Levinson, wrote a letter to the three lawmakers in question: Assemblyman Vince Mazzeo, Assemlyman Chris Brown, and state Senator James Whelan. In the letter the commission Chairman stated that whether to keep a casino closed or open is solely a private business decision of their owners, and the commission simply doesn’t have the necessary authority to make them change their minds.

Levinson wrote in the letter: “The commission simply does not have the authority to direct a casino licensee to forestall a business decision to cease its gaming operations.”

He also went on to add that the Casino Control Act provides the commission with an authority to address the shutdown of gambling operations, but there’s no stipulation in the law saying they can force owners to keep a gambling destination open any longer than they want to. There’s also no power to make owners give their employees an advance notice, over the one required by federal and state laws.

Atlantic casinos closing developments

All the casino closing commotion came after Caesars Entertainment, the parent company of the Showboat casino, submitted a report with regulators of federal securities stating it is still going ahead with the Showboat’s shutdown. But they have noted that the company will consider selling the casino off if the right buyer appeared on the horizon.

The company’s statement reads: “In June, we announced the difficult decision to close Showboat at the end of August. Other participants in the market have followed suit in what we believe to be a painful but constructive development for the market. We are hopeful that rationalization of capacity in Atlantic City combined with concerted effort to attract mid-week traffic and hospitality guests will help stabilize the market.”

As we can see the statement doesn’t mention plans to look for a buyer. It lets investors know that Caesars have already recorded a charge against their Q2 earnings for the severance payments. The report also states that in the future earnings reports, the company is intending to place the Showboat as “discontinued operation.”

Letter to the New Jersey Casino Control Commission

The three politicians, who sent a letter to the commission on July 22nd, noted that the companies choosing to close a casino, shouldn’t not prevent a new owner from running a gambling destination in the same spot. However, the commission has replied it can’t guarantee that either. Just as an example: when Caesars Entertainment sold the Clarigde and the Atlantic Club, they had deed restrictions preventing new owners from running a casino there.

Commission Chairman Levinson stipulated in his reply: “Deed restrictions are private, contractual covenants, and enforcement of them is a matter for the courts, not the commission.”

The shutdown dates

The Showboat is scheduled to close its doors on August 31st, provided there will be no last-minute buyer to save the casino. When Caesars held a meeting with employees last week, the company didn’t have any new information on a possible buyer, according to the unions.

According to Atlantic City Mayor, Don Guardian, there was a strong interest to buy the Showboat last month, and he is confident the casino can be purchased before its closing date. However, he didn’t have the same good news for the Trump Plaza, set to shut down on September 16th.

There’s a third casino, Revel Casino Hotel, which also could be shut down soon in case there’s no buyer at the bankruptcy auction scheduled for today.