Is Carl Icahn Thinking About Selling The Taj Mahal Casino?

Posted on December 28, 2016

[toc]A recent report from the New York Post suggests billionaire Carl Icahn might be considering selling the Taj Mahal Casino in Atlantic City.

The story broke shortly after New Jersey lawmakers passed a controversial law which will require Icahn to use union workers should he choose to reopen the shuttered casino on his own dime.

If he sells the New Jersey casino to someone else, he could sidestep the new legislation.

Icahn closed the NJ casino’s doors in October

The Trump Taj Mahal filed for bankruptcy in 2014. Icahn bought the financially troubled property that year for a price tag of $290 million.

Two years later Icahn announced he was shutting the casino’s doors after losing what he claimed was $100 million on the investment. The Taj Mahal was already struggling, but a labor strike on the property made matters even worse.

The union workers were on strike for over a month. The protest mostly revolved around Icahn’s unwillingness to match the health insurance benefits offered union employees at every other casino in Atlantic City.

Rather than negotiate some sort of compromise, Icahn chose to close the casino in early October of this year. The closure resulted in the elimination of more than 3,000 jobs.

New law directed expressly at Icahn and the Taj

The law passed on Dec. 19 explicitly forbids any casino which closed for a substantial period in 2016 to reopen for the next five years without union employees. The measure would also suspend gaming licenses of properties in violation.

Thing is, the only property that closed for a substantial part of 2016 was the Taj Mahal. The law is expressly directed at Icahn to prevent him from attempting to reopen the property without reaching an agreement with the local union, UNITE HERE.

“Given Atlantic City’s struggles, the last thing we want to see is a casino owner taking advantage of bankruptcy laws and pocketing a license or, even worse, stripping workers of benefits and denying them a fair wage because they couldn’t come to the table and strike an agreement,” said the bill’s sponsor, Assemblyman John Burzichelli, in an official statement.

Christie might have tough decision between AC allies and Trump loyalty

The next stop for the bill is Governor Chris Christie’s desk. Christie is known for stalwart support of Atlantic City casinos. He is also known as a supporter of President-elect Donald Trump.

Trump relinquished his ownership in Atlantic City casinos in 2007. That does not mean he does not have a keen interest in what happens to the Taj Mahal. Trump and Icahn remain close friends.

Trump recently named Icahn as a special adviser on regulatory oversight. The appointment was met with criticism suggesting Icahn’s business involvements represented too large of a conflict of interest for him to serve as an impartial adviser to the president.

Christie has not made his stance on the bill clear. He has a history of being very supportive of Atlantic City but not particularly pro-union in his politics.

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Sales rumors began in the wake of new law

Almost immediately after the new law passed through the state assembly, the New York Post posted rumors of a sale. The thought is if Icahn can sell to another party, that party can sidestep the new law and will still be able to hire non-union workers.

Icahn did not have kind words for the new bill. First and foremost he suggested its retroactive nature might make it unconstitutional.

“The bill is another absurd antic by [New Jersey Senate President Stephen] Sweeney that will hurt Atlantic City,” he told the Post.

The talks of the sale seem to be centered on existing casino operators. Icahn also owns the Tropicana in addition to the Taj Mahal.

There has been no official word of a sale yet. There likely will not be movement on that front until after Gov. Christie decides whether or not to veto the bill. Even if he does, there is a chance the veto could be overridden.

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Jessica Welman

A graduate of USC and Indiana University, Jessica Welman has long been involved in the poker industry and online gambling. She has worked as a tournament reporter for the World Poker Tour, co-hosted a podcast for Poker Road, and as the managing editor for WSOP.com.

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