Casino Workers in New Jersey Want Action Taken Against Investors of New York
Earlier their week, the labor union representing casino employees of Atlantic City urged gaming regulators of New Jersey online gambling sites to take action to protect the industry against investors from New York who are trying to earn a profit. Several hedge funds in New York have purchased stock in companies that operate casinos in the area. This includes Caesars Entertainment Corp properties and MGM Resorts International.
UNITE HERE! Local 54 is a union group that represents over 10,000 employees in the casino industry. The group was on hand during a meeting this week with the Casino Control Commission of New Jersey. The regulator was told by the group that they need to take action to protect employees of properties on the Boardwalk from hostile actions that might be taken by the new investors.
Hurting the Industry
The Union sees the investors as a threat to the gaming industry of Atlantic City. Bob McDevitt, the President of the Local 54, said that the investors only interest is to squeeze money out of the companies and it will hurt the local gambling industry.
McDevitt feels that the investors will be seeking a quick profit and their actions could harm the casino businesses in Atlantic City as well as the overall market. As a result, the employees of the region will also be impacted.
Wall Street Hedge Funds
The main concerns of the Local 54 stem from hedge funds involving Caesars and MGM. These are two of the largest gambling firms in Atlantic City. The commissioners were told by McDevitt that the private equity was a disaster in the past for Caesars after a buyout in 2008 involving Apollo Global Management/TPG Capital.
Employees of Caesars were subject to years of job cuts as well as maintenance issues. The company also closed the Showboat casino in 2014 in an effort to protect other casinos in Atlantic City. Caesars now operates Bally’s, Caesars Atlantic City and Harrah’s.
A vast majority of the shares of Caesar are now controlled by Carl Icahn, an investor of New York. He holds 28.5% stake in the gaming brand. Icahn is now a member of the board and will have a say so in business dealings.
In the past, Icahn owned casinos in AC including the old Trump Taj Mahal property. He sold that casino but not before he was at odds with the Local 54 due to job and pension cuts. The casino was subject to a workers strike that lasted for several months before Icahn decided to shut down the casino. He later on sold the property.
McDevitt has been asked if the recent concerns have anything to do with Icahn and the history that the union has with the investor. McDevitt stated that he is not focused only on Icahn and pointed out that several hedge funds on Wall Street have purchased stock in MGM.
McDevitt went on to comment that investors only want to pull money from the people of Atlantic City only because they are in a minority position by owning a casino. In his opinion, such investors should not have the ability to be granted licensing by regulators of the state.
The commission has responded to the request of the Local 54. They plan on completing due diligence on all applications involving gaming licensing as they come forward. For now, it seems the union will have to come to terms with the fact that the hedge fund investors can obtain stake in gaming venues in Atlantic City.