Icahn has entered into an agreement with Hard Rock International to sell the dilapidated Taj Mahal Casino.
“We at IEP are extremely happy with our ownership of the Tropicana Casino & Resort,” a statement confirming the sale from Icahn Enterprises begins.
The statement goes on to say:
“After considerable analysis and deliberation we determined that we only wanted to own one operating casino property in Atlantic City. A sale of the Taj Mahal therefore represents the optimal outcome for us.
We wish Hard Rock and its partners the best of luck with the Taj Mahal.”
Icahn, who salvaged Tropicana Casino from bankruptcy in 2015, appeared to have picked up the iconic Taj Mahal property at a bargain price when he swooped it from bankruptcy in 2015.
But the run-down property proved to be more trouble than it was worth, and following a prolonged labor strike Icahn shuttered the casino in October 2016.
The future use of the property quickly became a hot topic of debate.
Before the casino closed its doors the rumors were already swirling.
New Jersey lawmakers moved quickly to try to block any attempts by Icahn to reopen the property a few months down the road with a non-unionized workforce or a more favorably-negotiated union contract.
This led to a public spat between Icahn and Senate President Steve Sweeney, with Icahn firing several salvos at Sweeney:
“Unfortunately, as far as I’m concerned, Sweeney has already done irrevocable damage to Atlantic City specifically and New Jersey in general.
“After his irresponsible actions, we determined that we would not invest the $100 million to $200 million of capital we believed the Taj Mahal needed and that we would instead sell the Taj Mahal at a loss (if possible).
“I believe other large investors will similarly have no interest in investing significant amounts in Atlantic City or New Jersey as long as Sweeney is in control of the Senate.”
For his part, Icahn was noncommittal on his plans for the property.
Icahn played his cards close to his vest when it came to a possible sale. He was also equivocal as to whether or not he would lift the deed restriction he placed on the Taj Mahal in order to let the new owners of the property reopen the casino.
From what we know, it would be surprising if Hard Rock had any interest in the thoroughly battered property with the deed restriction still in place.
Hard Rock International’s interest in the Taj Mahal isn’t unforeseen.
The company was one of the frontrunners for a North Jersey casino license had last November’s voter referendum passed. Hard Rock had a deal in place with Meadowlands Race Track to integrate a casino into the venerable track.
Even with the purchase of the Taj Mahal, Hard Rock International likely still has its sights set on the Meadowlands.
Last year’s North Jersey casino measure gave current Atlantic City casinos right of first refusal to North Jersey casino projects, so owning and operating a casino in Atlantic City would improve the company’s chances of being selected for a license should efforts to expand casino gambling to North Jersey continue.
One of the seeming requisites of operating an Atlantic City casino is launching an online gambling website.
Last year, online gaming accounted for 7.5 percent of the industry’s total gaming revenue, with online gambling making up more than 15 percent of total gaming revenue for certain individual operators. Online gambling contributed roughly 15 percent to Resorts’ and 17 percent to Golden Nugget’s total gaming revenue in 2016.
If Hard Rock is going to reopen Taj Mahal as a casino, which seems highly likely, it’s also highly likely the company will launch an online gambling website to go along with it.
Hard Rock has other ties to the area, including the Cordish Company, which runs the company’s flagship casinos in Florida and is in the process of building a casino in neighboring Philadelphia under its LIVE! brand.
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