The fiasco of Stockton University’s attempted purchase of the closed Showboat casino has left many New Jersey legislators calling for a return to tighter oversight by the state’s Casino Control Commission.
The commission was stripped of much of its oversight powers in 2011 when Atlantic City casinos began struggling in the face of competition from casinos in Pennsylvania and other states. The change was seen as beneficial to casinos and eliminating red tape.
But now comes the Showboat sale in which Caesars Entertainment sold the former casino to Stockton with a deed restriction that it could never be used as a casino. The only problem was that Caesars already had a legal covenant with the neighboring Trump Taj Mahal that said the property could only be used as a casino.
Several legislators said that if the commission had been monitoring the sale, that never would have happened.
“The resizing has allowed the casinos that are left to do better,” chairman of the state Assembly Tourism, Gaming and the Arts Committee Ralph Caputo, told the Press of Atlantic City. “But there is less review and there should be more public scrutiny.”
Caputo was referring to a resizing of the Atlantic City casino market after four casinos closed in 2014.
Stockton’s acting President Harvey Kesselman has said that with more review from the state, the botched sale would not have gone so badly.
“My focus is on who is responsible for enforcement and for ensuring that the public is represented (in casino dealings),” Kesselman told the Press. “I’m not trying to say we had nothing to do with the problem there. But it takes a situation like this to bring up the larger questions. I welcome any support that could help the public and the students.”
Several Atlantic City politicians have sharply criticized Caesars for selling properties in the city with deed restrictions, charging that prohibiting casinos on certain sites in the city’s casino zone subverts the city’s development plans.
Many have also called for more oversight of Caesars, especially as the company goes through bankruptcy proceedings.
“At one time, the CCC was a watchdog,” said state Assemblyman Chris Brown, who represents Atlantic City. “Now, it’s become a lap dog.”
And in another example of fallout from the sale, luxury condominiums in the area of the Showboat are being put up for sale at a rock-bottom price.
The owners of the Bella Condominiums had hoped that the Showboat sale and the building of an island campus for the school would help revitalize their neighborhood around the north end of the city’s Boardwalk. The neighborhood was also hurt by the closing of the nearby Revel casino.
But with nothing happening in the area, some investors are getting out and selling condominiums at the building—which once cost $500,000—at auction.
Credit Suisse Bank, which owns 40 of the units is offering them at absolute auction. The first 15 units will have no minimum bid or hidden reserve.
