Billionaire Carl Icahn, who just completed acquisition of Atlantic City’s Taj Mahal Casino, says he will not make a planned 0 million investment into the casino while the threat of new casinos in northern New Jersey hangs over the resort’s head.
State officials are trying to approve a referendum for November that would ask voters to approve the construction of two new casinos in northern New Jersey, which would be the first allowed outside of Atlantic City in the state.
But like many opponents of the plan, Icahn—who also owns the Tropicana casino in Atlantic City—says that new casinos would further devastate the already hurting Atlantic City market and it would make no sense to invest in the resort if they were approved.
“Although I had planned to invest up to $100 million in the Taj, just as I made substantial investments at the Tropicana, obviously it would not be judicious to proceed with those investments while gaming in north Jersey is an open issue, and we will have to wait to see the outcome of those proposals,” Icahn told the Associated Press.
Icahn’s takeover of the Taj Mahal comes after a protracted bankruptcy procedure, but the investor finally took over the property last month. Icahn has said he would not invest in the casino before if he ultimately lost a fight over union benefits at the casino, but his stance on North Jersey casinos is new.
Icahn criticized politicians in the state who are pushing for the casino expansion.
“Unfortunately it appears that certain political leaders are lining up against Atlantic City because of their personal ambitions,” he said. “They are for gaming in north Jersey, which as everyone knows would destroy thousands of jobs in Atlantic City and south Jersey. It would result in even more home foreclosures and further devastate an already devastated region, as well as mortally wounding Atlantic City’s great potential as a resort and will also obliterate the hope for job growth, not only in AC but also the Jersey Shore and south Jersey.
“When money was invested in Atlantic City, the politicians repeatedly assured that they were committed to Atlantic City’s future and that casinos would not be permitted in north Jersey,” Icahn said. “Based on these assurances, hundreds of millions of dollars were invested in Atlantic City. If these assurances are now broken and Atlantic City is abandoned by politicians in favor of north Jersey gaming, why would anyone ever invest in the great state of New Jersey knowing that the assurances of political leaders in New Jersey mean nothing?”
Icahn did tell the AP he will make a smaller investment of $10 million to $20 million in the casino to fix some pressing maintenance needs, but the larger investment seems sidetracked at least until November if the referendum goes before voters.
Several investment firms have warned that the building of new casinos in the state would lead to more casino closings in Atlantic City. Deutsche Bank analyst Andrew Zarnett recently warned that proposed casino construction throughout the Northeast—including the planned New Jersey casinos—would lead to the closing of the Taj Mahal and at least one other Atlantic City property, according to the AP’s report.
Icahn’s statements comes just days after he placed the Taj Mahal under the management team that runs his other Atlantic City property the Tropicana Casino Resort.
In Trenton, a state Senate Budget and Appropriations committee also held a public hearing on the referendum bill, which brought out a large contingent of southern New Jersey business leaders and politicians who oppose the plan.
The referendum plan would ask voters whether to approve two casinos in separate counties at least 72 miles from Atlantic City. The referendum doesn’t specify exactly where the casinos would be built, but the leading candidates are at the Meadowlands Racetrack in East Rutherford and in Jersey City, where investor Paul Fireman has proposed a casino resort costing up to $5 billion.
Most speakers said the plan would lead to more casino closings in Atlantic City and more jobs lost.
State Senator James Whelan—a former Atlantic City mayor—also echoed concerns that the new casinos would thrive only until other states responded, especially New York.
“We’re not going to have casinos in North Jersey enjoying a 20- to 25-year monopoly,” he told the committee. “It will be only a matter of years before New York City has casinos in Manhattan or in the Bronx. What Atlantic City is experiencing now, North Jersey will experience at that time.”
A second public hearing is scheduled for March 7 in the state Assembly. Then the bill will go to both legislative houses for a vote.
