The outlook for two endangered Atlantic City casinos dimmed
further on Monday as a state agency said it cannot force their owners to keep
them open past this summer, and the owner of one indicated it was moving
forward with shutdown plans.
Three Atlantic City-area state lawmakers last month asked
the New Jersey Casino Control Commission to require the Showboat and Trump
Plaza to remain open past their expected closings dates this summer.
In an Aug. 1 letter, commission Chairman Matthew Levinson
told state Sen. James Whelan and Assemblymen Vince Mazzeo and Chris Brown that
deciding when to close a casino is a private business decision and beyond the
commission's authority.
"The commission simply does not have the authority to
direct a casino licensee to forestall a business decision to cease its gaming
operations," Levinson wrote.
He added that while the Casino Control Act gives the
commission authority to address the orderly shutdown of casino operations,
nothing in the law gives it the right to force a casino owner to keep a
gambling hall open longer than it wants to, or to give employees more advance
notice than required by state and federal law.
The development came as the Showboat's parent company,
Caesars Entertainment, filed a report Monday with federal securities regulators
indicating it still plans to close the Showboat. The company had said it would
consider selling it instead if the right deal materialized.
"In June, we announced the difficult decision to close
Showboat at the end of August," the company wrote. "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."
The statement made no mention of plans to seek a buyer.
Instead, it told investors the company has already recorded a charge against
its second-quarter earnings for employee severance payments, and plans to
present the Showboat as a "discontinued operation" in future earnings
reports.
A company spokeswoman said Monday that Caesars has not
changed its plans to close Showboat, but would consider "a reasonable
offer" for the casino.
In their July 22 letter to the commission, the politicians
also said companies that close a casino should not be allowed to bar a new
owner from running the site as a casino. But the commission says it can't
require that, either. The Atlantic Club and the former Claridge casinos were
subject to deed restrictions when Caesars Entertainment sold them, prohibiting
a new buyer from running them as casinos.
"Deed restrictions are private, contractual covenants,
and enforcement of them is a matter for the courts, not the commission,"
Levinson wrote.
The Showboat is due to shut down Aug. 31 unless a
last-minute buyer steps forward. In a meeting last week with Showboat workers,
Caesars management had little new information on the casino's status, according
to union representatives.
Atlantic City Mayor Don Guardian said last month that there
has been strong interest in the Showboat, and that he would not be surprised to
see it sold rather than shut down. But he had no such optimism about Trump
Plaza, which is due to shut down Sept. 16.
The legislators' letter did not address Revel Casino Hotel,
which says it could also shut down is a buyer is not found at a bankruptcy
auction on Thursday.
Source: NBC10.com
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