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New Jersey Commission: We Can’t Force Atlantic City Casinos To Stay Open

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The famous boardwalk in Atlantic City could go dark if two major casinos follow through on plans to close. (Abdullah Pope/AFP/Getty Images)

The famous boardwalk in Atlantic City could go dark if two major casinos follow through on plans to close. (Abdullah Pope/AFP/Getty Images)

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ATLANTIC CITY, N.J. (AP) — 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. Company officials did not immediately return messages seeking comment Monday.

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.

(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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