Icahn: No $100M for Taj Mahal if North Jersey casinos OK’d

By Wayne Parry, Associated Press

Wednesday, March 2, 2016 | 9:33 a.m.

ATLANTIC CITY, N.J. — Billionaire investor Carl Icahn said Wednesday that if New Jersey approves casinos in the northern part of the state he won't pump $100 million into his newly acquired Trump Taj Mahal casino in Atlantic City.

Icahn told The Associated Press that his planned investment in the casino he acquired Friday from bankruptcy court is contingent on New Jersey not approving two new casinos just outside New York City.

Icahn, whose Tropicana Entertainment will run the Taj Mahal, said in-state competition will devastate Atlantic City and make it impossible to invest that much money into his new casino. He also owns the Tropicana.

A bill to authorize a statewide referendum in November on north Jersey casinos is expected to be passed later this month in the state Legislature.

"Although I had planned to invest up to $100 million in the Taj, just as I made substantial investments at the Tropicana, obviously it would not be judicious to proceed with those investments while gaming in north Jersey is an open issue, and we will have to wait to see the outcome of those proposals," Icahn said.

Icahn blasted New Jersey politicians for changing the rules in the middle of the game, and said it would discourage anyone from investing in Atlantic City in the future.

Bob McDevitt, president of a casino workers union that bitterly fought Icahn over the company's elimination of health and pension benefits, declined comment Wednesday.

Lawmakers from the northern part of the state say the new casinos are needed to help recapture customers that have abandoned Atlantic City for closer casinos in New York and Pennsylvania. Atlantic City's casino revenue has fallen from $5.2 billion in 2006 to $2.56 billion last year. Analysts say the north Jersey casinos could become among the most successful in the country, but caution they would be vulnerable if New York state allows a casino in or near Manhattan.

Tax revenue generated by the new casinos would be split between a nonprofit group that would invest in Atlantic City, and tax relief and programs for senior citizens and the disabled statewide.

Icahn said he will make an immediate investment of $10 million to $20 million to address crucial maintenance and other pressing needs at the casino, regardless of whether casinos are eventually approved in northern New Jersey.

His comments came as Deutsche Bank analyst Andrew Zarnett warned that a wave of new casinos in the northeast over the next three years — and the two north Jersey casinos within five years — will cause the Taj Mahal and at least one other Boardwalk casino in Atlantic City to shut down. The prediction was made before Icahn announced that major funding for the Taj Mahal would be delayed until after a possible referendum in November.

"By 2018, we foresee Atlantic City having two center boardwalk casinos, including the Tropicana, and three casino hotels located in the Marina district (Borgata, Harrah's, and Golden Nugget)," Zarnett wrote. Atlantic City currently has eight casinos.

The Taj Mahal has over 2,000 hotel rooms, putting it in the upper echelon of Atlantic City casinos, along with the Borgata, Harrah's and the Tropicana.

As part of his acquisition of Trump Entertainment Resorts by swapping debt that he owned in return for ownership of the company, Icahn also got the shuttered Trump Plaza Hotel Casino, which has been closed since Sept. 16, 2014. He said he is studying possible uses for the property, including reopening some hotel rooms during periods of peak demand.