New Jersey state Sen. James Whelan has become a critic of Caesars Entertainment, which he says is trying to close casinos in Atlantic City and stifle competition.
Caesars owns four casinos in Atlantic City and was part of purchasing the Atlantic Club in December through bankruptcy court along with the Tropicana Casino Resort. The Atlantic Club was then closed Jan. 13. Tropicana received the property’s gaming equipment and customer database while Caesars got the property and its 801-room hotel.
Now Whelan says Caesars is seeking a deed restriction on a possible sale of the property that would prevent it from ever being a casino again. Whelan wrote to state regulators complaining about the restriction in a letter to the state Casino Control Commission and the state Division of Gaming Enforcement.
“Instead of maximizing the sale price, as most sellers would, they are more interested in limiting future potential competition,” Whelan wrote. “While it may well be that the current market would make it unlikely that the property would reopen as a casino, there is no telling what the market conditions will be in 15, 10 or even five years from now. Shouldn’t we allow the market to dictate if and when this property could become a casino again, not have Caesars restrict competition?”
Whelan acknowledged in interviews that if Caesars sells the property to a non-gaming company, state regulator would not have to approve the deal. But he said deed restrictions limiting casino competition on such sales could put Caesars in violation of the state’s undue economic concentration rules.
Whelan noted that Caesars recently sold the former Claridge casino hotel with a similar deed restriction.
Whelan took the same tack earlier this year when he wrote casino regulators asking them to block Caesars from making a bid to buy the Revel Casino Hotel. The struggling Revel property is rumored to be up for sale or possibly considering a second bankruptcy filing.
Whelan said allowing Caesars to control a fifth casino in the resort could also give Caesars too much control of Atlantic City’s casino market.
Analysts believe that the Atlantic Club’s closing was a needed contraction of the casino industry in the resort, which has been steadily losing customers to casino competitors in neighboring states. Whelan acknowledged that, but pointed out that with other struggling casinos rumored to be up for sale—such as the Trump Plaza casino hotel—moves by surviving casinos to permanently close the properties would hurt the city’s future potential.
“Obviously they want a monopoly and they want to keep other competitors out of the market,” Whelan told the Press of Atlantic City. “That might be good for Caesars, but it’s not good for Atlantic City. We shouldn’t allow Caesars to dictate the future of Atlantic City. It’s a bad public policy, and it goes against state law.”
Officials for Caesars have not commented on Whelan’s comments.
