Recent reports alluded to the possibility that Caesars Entertainment was contemplating a bid on the Revel Casino Hotel, but at least one lawmaker believes it may be unlawful for them to acquire another Atlantic City gaming establishment.
New Jersey Sen. Jim Whelan brought up the matter of “undue economic concentration” should Caesars be allowed to takeover the Revel. Caesars already operates Showboat, Harrah’s, Bally’s and Caesars Atlantic City. Adding yet another casino to the mix would make New Jersey’s gambling industry much too dependent on one company, Whelan told the Press of Atlantic City.
The senator also pointed to the fact that Caesars recently acquired the Atlantic Club via a joint bid with Tropicana and has no plans to open a casino at that location. He called the prospect of Caesars also purchasing the Revel as “bad for Atlantic City, and more importantly, it’s against the current law.”
That law is not clearly defined mathematically with regard to the amount of control allowable to any one gaming company on the Eastern Seaboard. According to 2013 statistics, Caesars laid claim to $1.1 billion of the $2.9 billion in revenue generated by Atlantic City casinos. That comes out to about 38%.
But revenue is not the only factor in determining whether one company has too much concentration of the industry. Also to be analyzed are such considerations as the number of table games, slot machines, hotel rooms, the overall market situation, and how another license for a particular operator would benefit the growth of Atlantic City gaming.
Whelan could not quantify exactly how much control would be too much for any one company such as Caesars. But he did utter the famous quote attributed to Supreme Court Justice Potter Stewart, who was asked to define pornography regarding a case before him in 1964. “I don’t know how to define it,” Whelan said, “but I know it when I see it.”
Following the closing of the Atlantic Club on Jan. 13, there are now 11 casinos operating in Atlantic City. The Revel celebrated its grand opening less than two years ago in 2012. That opening turned out to be not so grand when the casino filed for bankruptcy a year later. It is currently owned by a group of hedge fund investors. That group put the Revel Casino Hotel on the shopping block late in 2013 and bids are being accepted for roughly two more weeks.
Whelan took his concerns to both the New Jersey Division of Gaming Enforcement and Governor Chris Christie’s office. The DGE would analyze claims of undue economic concentration should a possible sale get nearer to the finish line, a spokesperson said.
The same topic was addressed almost nine years ago when Harrah’s and Caesars merged. The Casino Control Commission signed off on the merger, as did the DGE. However, warnings were issued by a DGE lawyer that rules regarding excessive industry control by any one company needed to be tightened up for the overall good of Atlantic City gaming.
Before 1995, a state statute limited the number of casino licenses to any one entity at three. The law was amended when Donald Trump requested to open the Trump Regency, the fourth Atlantic City gaming establishment under the real estate mogul’s control.