Carl Icahn, the new owner of the Atlantic City casino the Taj Mahal, is facing issues brought on by the unsettled actions of the casino’s previous owners. Casino union members picketed outside of the Taj Mahal on March 22, protesting the previous owner’s removal of benefits to its employees. The owners stopped health care benefits and pensions for many of the casino’s employees before the sale to Carl Icahn.

Icahn purchased the Atlantic City casino from Trump Entertainment Resorts in October 2014, through a bankruptcy court. Before the casino had declared bankruptcy, Icahn had already assumed much of the property’s debt.

During the proceedings, a judge ruled that the owners could remove all health care and pension benefits from any of the employees. This ruling was under one condition – Trump Entertainment would have to help pay for the costs associated with employees signing up for a new plan under the Affordable Health Care Act.

President of the casino workers’ union Bob McDevitt expressed his belief that Icahn is responsible for Trump Entertainment’s actions in a statement to the Associated Press:

“It’s clear to me that Carl Icahn has no intention to treat workers with respect in Atlantic City. He has the keys; now he has to pay the consequences for his actions.”

Since employee benefits technically ended before Icahn fully assumed ownership of the hotel, he claims there is no way he is responsible for the union workers’ troubles. Icahn says he knew nothing about the removal of employee benefits, but McDevitt argues he was not only aware but actually gave approval for the action.

In response to McDevitt’s accusations, Icahn has spoken out, claiming that the union president is trying to shut down the Taj Mahal. Icahn also added that McDevitt was behind the past four Atlantic City casino closures. Only eight casinos remain operational in Atlantic City; some of the survivors include the Golden Nugget, Caesars, Resorts, and of course the Taj Mahal.

Icahn’s issues with northern New Jersey casino expansion

Things won’t be getting any easier for Mr. Icahn. The state of New Jersey is attempting to pass a bill expanding casinos to areas outside of Atlantic City. The bill, which is to be voted on by the citizens of NJ in November, would allow two new casinos in Northern New Jersey. Icahn has spoken out against the expansion stating he won’t invest any money into the Taj Mahal if it passes. Icahn says it would make for a poor investment if the state chooses to remove Atlantic City’s long-term monopoly on NJ’s casino industry.

In an open letter to the protesting union members, Icahn spoke ominously about Atlantic City’s future:

“Simply put, north Jersey gaming will probably be a death sentence for the Taj and the Atlantic City economy. This is the issue that will make or break Atlantic City. This is the issue we should all be rallying against.”

In the letter, Icahn attempted to sympathize with union members’ predicament but ultimately stood his ground and refused to accept responsibility.

Atlantic City remains on the verge of economic collapse

Icahn isn’t wrong to be worried about the casino expansion; the city is in a dangerous financial situation. Currently, Governor Chris Christie is in the process of negotiating a state takeover of Atlantic City, but city officials have not been very receptive.

The town is estimated to be bankrupt by April 8, at which point it will be completely out of funds for non-essential services. Atlantic City mayor Don Guardian has been the biggest opponent of the takeover, as he believes the terms of the takeover are entirely unfair. Unfortunately for Guardian, he doesn’t have many sympathizers – Christie has expressed multiple times that poor management of the city is what’s responsible for issues.

Rudee Rossignol

About

Las Vegas-based Rudee writes about a variety of topics, all surrounding regulated U.S. online gambling. A longtime poker player, she offers an on-the-ground take on Internet gaming matters.