When the Casino Control Commission was created in 1977, it checked into the Inn of Trenton and set up shop in two rooms. It was a humble beginning for an agency that would grow to regulate a multi-billion dollar industry.
Gov. Byrne named Essex County Prosecutor Joseph P. Lordi
to head the agency. He was joined by part-time commissioners Kenneth MacDonald, a Haddonfield car dealer; Red Bank attorney Prospero DeBona; Albert W. Merck of Mendham, a scion of the family that created Merck Pharmaceuticals; and Alice B. Corsey who had been active in various charitable and government positions in Deptford Township.A humble beginning
Their first task was to set up the office and decide how to structure an agency to regulate an industry that was brand new to the state. To help do that, Lordi brought with him two attorneys who were officially hired at the Commission’s first meeting – R. Benjamin Cohen, who became the first general counsel, and Joseph A. Fusco, who became the special counsel for licensing. Lordi had already retained Cathy Hoffman, who initially was the entire clerical support staff for the Commission.
In addition, a third-year law school student named Scott Silver showed up at the offices and volunteered to work. He received credit toward his degree for the work and it earned him a full-time slot on the staff when he finished school.
By the time the Commission got started, work was well underway to renovate the old Chalfonte-Haddon Hall to convert it to Resorts International Hotel Casino and pressure was mounting to get the first casino licensed and open. It was quickly apparent that the building would be finished long before an investigation would be completed and a licensing hearing held. That led the Legislature to amend the Casino Control Act and give the Commission the authority to issue a temporary permit.
For months, the Commission worked feverishly to develop regulations, systems, and controls prior to the opening of Resorts on May 26, 1978. Meetings were often marathon sessions. As the staff grew, the Commission checked out of the hotel and into several temporary offices along West State Street in Trenton. The plumbing didn’t always work and neither did the heat. Lordi held meetings in his office with corporate executives and everyone had to keep on their winter coats and gloves.
In Atlantic City, the Commission found the Arcade Building early on and moved into an office that had been the Miss America Pageant’s headquarters. Since it had a meeting room, all of the Commission’s meetings were soon being held in Atlantic City. It was there, in late 1978 and early 1979, that the Commission held its first full license hearing for Resorts – a hearing that lasted six weeks and ended just as the casino’s temporary permit was about to expire.The First Wave / A modern “gold rush”
Those were heady days. By 1979, there were close to 50 casino proposals being touted and every meeting was packed with would-be casino workers pleading to know when they would be licensed. It was a pace that continued unabated for the first three years with the opening of Resorts, Caesars and Bally’s.
As each commissioner’s term expired, Gov. Byrne failed to nominate any replacements. As a result, commissioners remained as holdovers for years.
While the pace of development continued to surge ahead, the Commission was stunned in 1980 by the Abscam investigation which led to the resignation of one commissioner. The legislature acted swiftly to reestablish public confidence by reconstituting the Commission with five full-time members. Chairman Lordi maintained his position and was joined by Martin Danziger, Madeline McWhinney, Don Thomas and Carl Zeitz.
Danzinger, the heir apparent to Lordi, was a Washington attorney who had been with the Immigration and Naturalization Service and previously with the Manhattan District Attorney’s Office. McWhinney spent 30 years with the Federal Reserve Bank of New York before becoming president of the First Women’s Bank. Thomas had been an official with the National Urban League and Zeitz was a newspaper reporter for the Bergen Record.
As soon as the new, full-time Commission was sworn into office it immediately started four months of continuous licensing hearings for Caesars and Bally’s – cases in which the Commission found executives unsuitable and required their removal if the companies wanted to be licensed. When the legislature amended the Casino Control Act, members made it clear that they felt casinos should come to Trenton to get a license. But the Commission had neither permanent office space in Trenton nor a hearing room in its “temporary” quarters. As a result, the hearings were held in an auditorium of the Thomas Edison College on West State Street.
Shortly after those hearings, the Commission finally found “permanent” office space in Lawrenceville, just outside of Trenton. Lordi barely had a chance to settle into his new office before he retired in June 1981. With his departure, vice chair Danziger took over as acting chairman for the rest of the year. Joel Jacobson, the former head of the state’s Department of Energy was named to fill Lordi’s seat at the end of 1981, but outgoing Gov. Byrne decided not to designate a chairman. Commissioner Thomas then served as acting chair for most of 1982.
Through all of that, the Commission kept up its hectic pace of opening and licensing casinos. Between the time the new full-time Commission started in late August of 1980 and November of 1982, four new casinos opened and the Commission held five plenary licensing hearings. It also agreed to reserve a license for Donald Trump for what became Trump Plaza Hotel Casino.
In between casino license hearings, the Commission also held an extraordinary hearing that examined Local 54 of the Hotel Employees and Restaurant Employees Union. The Commission voted to revoke the union’s registration unless three officials were removed from office. The union had earlier challenged the Commission’s ability to require it to register with the regulators, but the Commission’s authority was upheld all the way to the U.S. Supreme Court.
In 1982, the Commission held licensing hearings for Playboy Enterprises and concluded that its founder and chairman, Hugh Hefner, was unqualified. Playboy had a choice of keeping its casino or keeping its chairman. Hefner unsuccessfully appealed and in 1984 the company finally sold its interest in the casino, which then became Elsinore’s Atlantis Casino Hotel.
Danzinger and McWhinney decided to leave the Commission in the fall of 1982 and they were replaced by Cinnaminson attorney Walter N. Read
, who became the Commission’s second chairman, and E. Kenneth Burdge, then the Ocean County Clerk and acting county administrator.
Under the new chairman, the commissioners continued to maintain the Commission’s strict integrity standards. That commitment could be seen when it fined Caesars $257,000 in 1983 for a variety of offenses, including interfering with Commission inspectors. But the Commission also showed its commitment to the redevelopment of Atlantic City with the completion of the American City Corp. plan that outlined a redevelopment proposal for the city’s Inlet section.The Second Wave
Public dissatisfaction over the slow pace of the redevelopment led to a major change in 1984 when the Legislature created the Casino Reinvestment Development Authority (“CRDA”). Chairman Read said that the creation of that authority “culminated a long struggle to provide a mechanism to funnel casino revenues into a program that will ultimately restore Atlantic City to its former prominence as a tourist attraction and home for New Jerseyans.”
It also saw the opening of the city’s 10th casino – then called Harrah’s at Trump Plaza – and the start of what was then being called the “second wave” of casino development.
Don Thomas left the Commission late in 1984 and was replaced in the spring of 1985 by Valerie H. Armstrong, an Administrative Law Judge from Absecon. But before she joined, the Commission ruled in two major cases. The Commission rejected the advice of the Division of Gaming Enforcement and decided to renew a license for Resorts International. Several days later, the Commission denied Hilton Hotels Corporation’s request for a license.
The Hilton denial – which came just a few months before the company’s casino hotel was supposed to open – created an opportunity for Donald Trump who quickly purchased the building. It opened in the middle of 1985 as Trump’s Castle and years later would be renamed Trump Marina.
Hilton wasn’t the only casino that the Commission dealt with harshly in 1985. In what was at that time the most serious penalty ever meted out by the Commission, Caesars was ordered to shut down its casino for a day because of regulatory violations that arose out of the casino’s catering to a bank executive who gambled away millions of dollars embezzled from his employer.
The following year started a period in which the Commission focused a lot more on financial matters than ever before. “Where only a few short years ago, the Commission struggled with licensing enough dealers and cocktail waitresses, today it deals with corporate mergers, hostile takeovers, financial restructurings and the sale of multi-million dollar corporations,” Chairman Read said in the 1986 Annual Report.
The Chapter 11 bankruptcy filing of Elsinore’s Atlantis Casino Hotel required the Commission to take a close look at the meaning of financial stability. The Commission also had to review the issue of corporate takeovers as Donald Trump threatened takeover attempts against Holiday Inns Inc., which owned Harrah’s, and Caesars World Inc. The Commission’s review of these complex financial issues was clearly aided by the addition of W. David Waters to the Commission. A veteran of 36 years with the Internal Revenue Service, Waters replaced Commissioner Jacobson.
In 1987, two casinos were sold and another underwent a massive recapitalization. Golden Nugget Inc. sold its casino hotel to Bally’s, a purchase that Bally’s officials believed would fend off a possible takeover effort from Trump. After that, Trump turned his attention to Resorts and reached a deal to acquire the stock held by the estate of Resorts chairman James Crosby. The Commission, in turn, focused on economic concentration. Casino operators were limited to a maximum of three casinos and Trump already had two and was building a third before he bought Resorts. The Commission approved a plan to close the Resorts casino when the Taj Mahal opened – but Trump ended up selling much of the company in 1988 before the Taj Mahal opened.
It was Merv Griffin who came along in 1988 to try to win Resorts away from Trump. They ended up dividing the assets, but both Resorts and the Taj Mahal ended up going through Chapter 11 reorganizations within just a couple of years.
The Commission also got its first opportunity to try Interim Casino Authorization (“ICA”) – a process that allows a buyer to acquire an interest in a casino hotel prior to going through the full qualification process – when it approved Bass Plc.’s ownership interest in Harrah’s parent company.
Internally, and as a result of some pressure from the industry, the Commission retained a consulting firm which conducted a management audit of the agency. Several of its recommendations were enacted quickly while others waited for several years until a new chairman was appointed.
Carl Zeitz left the Commission in 1988 and was replaced by Frank J. "Pat" Dodd
, a veteran state senator and first chairman of the state’s Hazardous Waste Siting Commission. Dodd arrived at a time when the Commission was faced with one of its toughest decisions. The struggling Atlantis came to the end of its financial rope in 1989 and the Commission refused to renew its casino license. Instead a conservator was named to take control of the property when the license expired. In their last move before the license expired, Elsinore officials sold the property to Donald Trump.
At the same time, revenues flattened out and the business climate weakened.
The Commission decided to move the Operations Unit of the Division of Financial Evaluation and Control from Lawrenceville to the CitiCenter building in Atlantic City. It was one of the recommendations in the management audit that had been completed in 1988. The shift of another 25 employees meant that three quarters of the Commission staff was based in Atlantic City, but they were also housed in three different buildings.
As 1989 ended and 1990 began, Chairman Read agreed to resign his seat. It was a move that enabled the outgoing Kean administration to appoint James Hurley
to the Commission. A plan to name Read to the CRDA, however, never materialized. With Read’s departure, Commissioner Armstrong became the acting chair for about eight months. While she was acting chair, the Trump Taj Mahal opened and the Commission started some steps toward becoming more responsive to industry concerns.The first reorganization
When Commissioner Burdge’s term expired in August, Gov. Florio named his then-Chief of Staff Steven P. Perskie
to become the next chairman. Perskie had been one of the primary figures in the move to legalize casinos for Atlantic City in 1976 when he was in the state Assembly. He also had a hand in every amendment to the Casino Control Act while he served in the Assembly and Senate until he became a Superior Court Judge.
Chairman Perskie immediately started a massive overhaul of the Commission that continued well into 1991. Divisions were realigned, the budget was cut and, for the first time, the Commission underwent a significant reduction in force. Perskie initiated a major reexamination of the role of the Commission and started the process of moving the Commission out of what many considered to be business decisions for the casinos. He shut down the Commission’s Lawrenceville office and moved all employees to Atlantic City.
Commissioner Armstrong was appointed a Superior Court Judge in October of 1991 and left the Commission. Commissioner Waters left the following month at the end of his term. They were replaced by Charles Irwin
, a Toms River attorney and a member of the CRDA, and Jeannine LaRue
of Sickerlerville who had been a lobbyist for the New Jersey Education Association.
Starting in 1991 and continuing for the next several years, the Commission focused on redefining the agency after a series of legislative changes. For example, the legislature eliminated facilities requirements in 1991, permitted three new games, made it easier for institutional investors to invest in casino stocks and gave the Commission the power to approve 24-hour gambling on weekends, holidays and other special occasions.
In 1992, the legislature permitted the Commission to authorize 24-hour gambling all year if it would have an economic impact on the city. The Commission promptly decided it would have an impact and casinos have been open around the clock ever since. The legislature also gave casino employees the right to gamble and the Commission the power to approve new games for casinos. Lawmakers also approved simulcasting of horse races to casinos.
Changes to the act continued in 1993, and the Commission started using its power to approve new games. Poker and simulcasting both started in the spring and work started on offering keno, although that game didn’t debut until the following year. The Commission also overhauled its affirmative action requirements for casinos and required casinos to develop Equal Employment/Business Opportunity Plans.
Commissioner Dodd’s term ended in 1993 and Commissioner Irwin resigned to pursue other ventures. Irwin was replaced by Leanna Brown
of Chatham Borough who had served as a state senator from Morris County and held a variety of elective offices there. Chairman Perskie resigned in 1994 and Gov. Christine Whitman named Bradford Smith
to become the next chairman and Diane Legreide
to fill the seat vacated by Dodd.Wall Street takes a second look
The year 1995 was a watershed year for changes to the Casino Control Act – changes that again dramatically refocused the Commission. The legislature eliminated the need for hotel employee registrations, lifted the three casino license limit, ended experiential requirements for casino employees and established the “Atlantic City Fund” to finance projects in Atlantic City through regulatory savings.
Chairman Smith started an aggressive outreach program to better inform the investment community of the legislative and regulatory changes that had been made in Atlantic City. He visited with a number of Wall Street analysts, attended investment company seminars and other gaming conferences to discuss the more business friendly attitude in New Jersey.
Those efforts, combined with a variety of other factors, started to yield fruit as several gaming companies – Mirage Resorts, Circus Circus Enterprises and others – expressed an interest in building in Atlantic City’s Marina District.
In 1996, the Casino Control Act was amended again to eliminate the requirement that a casino be a single room – a change that facilitated development of the Wild Wild West Casino. The Commission also moved its staff who had been working in the CitiCenter Building into newly renovated space in the Arcade Building. That brought the entire staff, save for inspectors, into one building for the first time since the Commission occupied those two rooms in the Inn of Trenton. It approved a variety of new games, authorized keno runners to issue tickets outside of casino or simulcasting space, and it eliminated the “50 percent rule” which had restricted casinos from having more than half of their slot machines from one manufacturer – a rule that fostered competition in the slot industry. During that time, Bally Entertainment was bought by Hilton Hotels Corp.
Commissioner LaRue left in 1996 and was not replaced until 1998 when Susan F. Maven
joined the Commission.
In its twentieth year, the Commission continued the process of fine tuning its regulations. Through the hearings on the acquisition of ITT and on Sun International, it also continued to focus on the two main areas of regulatory concern that had defined the Commission’s role over its first two decades: financial stability and responsibility of casinos and the good character, honesty and integrity of the people who own and operate them.Gaming’s third decade
The new $268 million Atlantic City Convention Center opened in May 1997 and with it came a need for more hotel rooms. Three properties – Hilton, Caesars and Harrah’s – each proposed new towers of hotel rooms and Bally’s got approval for its Wild Wild West Casino expansion. Plans to develop new casinos in Atlantic City’s Marina District moved. Mirage Resorts switched partners and brought in Boyd Gaming for a project that was supposed to see two or three casinos eventually built on the “H-tract”. Construction started in 1998 on a controversial roadway and tunnel connecting the end of the Atlantic City Expressway with the Marina District – a project that opened that area to new casino development.
In January 1998, the National Gambling Impact Study Commission came to Atlantic City to hear from the industry, government leaders, the business community and residents about the impact of casino gaming. The Commission produced a detailed report
for the study commission about gaming in Atlantic City. Later in the year, the Commission had to rule on the purchase of Showboat Inc. by Harrah’s Entertainment Inc., which kicked off a round of consolidation that would go on for a few years. Hilton Hotels spun off its casino operations into a new company called Park Place Entertainment, which included properties in Atlantic City, Nevada, Mississippi and elsewhere. The financially struggling Sands filed for reorganization under Chapter 11 of the US Bankruptcy Code.
As a result of an agreement reached a few years earlier between the regulators and the industry, the regulators agreed to reduce duplication in the regulatory system and cut costs. In turn, the industry agreed to direct those savings into new revenue-producing projects in Atlantic City that would make the city a more attractive destination. The first of those projects came on line in 1998 with the opening of the Sand Castle stadium which would become home to the Atlantic City Surf, an independent league baseball team. Other projects followed in subsequent years.
Chairman Bradford Smith left the Commission in 1998 and Gov. Whitman quickly nominated Commissioner James Hurley to move up to the chairman’s position. Commissioner Legreide was reappointed and Susan F. Maven was sworn in as a new member of the Commission.
Redevelopment of Atlantic City continued in 1999 with several housing projects and a new senior center as well as a new tourist information center. Using money saved by reducing the cost of casino regulation, the Ocean Life Center (now called the Atlantic City Aquarium) was completed.
Park Place Entertainment received Commission approval to acquire Caesars World Inc. after the Commission concluded it would not result in undue economic concentration. The Commission also reviewed the propriety of Park Place’s decision to retain a leader the Florida House of Representatives at a time when the company was lobbying for legalization of casino gambling there.
In 1999, New Jersey State Police Acting Superintendent Michael A. Fedorko
retired after 30 years of service and began a second career when he was appointed to the Casino Control Commission. He replaced Commissioner Brown whose term expired.
Construction started on the Borgata Hotel Casino and Spa in 2000, the first new casino to start up in over a decade, and the future seemed bright for Atlantic City. MGM-Mirage was planning a big complex next door while Harrah’s was also building a new hotel tower to expand its property. Several other operators were discussing expansion plans as well.
The Commission approved the restructuring deal for the Sands which gave investor Carl Icahn control over the property. Icahn then unsuccessfully tried to buy the Claridge, which had also been in Chapter 11, but was outbid by Park Place Entertainment. The Commission held a hearing on Park Place’s purchase to determine whether it would result in undue economic concentration and it approved the transaction early in 2001.
Commissioner William T. Sommeling
joined the Commission in 2000 after 11 years as Undersheriff in Ocean County. He had more than 35 years of experience in law enforcement as well as a decade in casino surveillance.
A federal court issued an injunction ending requirements that casinos buy a certain percentage of their goods and services from minority- or women-owned companies. The court found the set-aside provisions were unconstitutional in part because there had been no prior showing of discrimination by the gaming industry here. Similarly, the Commission had to end its practice of requiring casinos to strive to meet percentage goals in employment levels for women and minorities.
The year 2001 started out looking quite rosy for Atlantic City’s gaming industry with a lot of construction activity and billions of dollars of proposed new investment. Borgata was under construction while Harrah’s, Showboat, and Resorts were building new towers and Tropicana started work on a major expansion that would include a large retail/restaurant/entertainment mall.
Like everyone and everything else, Atlantic City’s gaming industry was hurt in 2001 by the events of September 11. The terrorist attack had a significant impact on tourism around the country. Casino revenues took a hit in September and October, but they rebounded as people started feeling comfortable enough to drive to nearby resorts rather than fly to more distant places.
The Commission unveiled a modern digital system for issuing casino employee licenses – a system that was both more efficient and more secure. It also started New Jersey’s self-exclusion program
to help compulsive gamblers get control over their gambling activity. The program allows people to sign up to be barred from gambling for a minimum of one-year, five-years or for lifetime.
Commissioner Susan Maven was appointed a Superior Court Judge and left the Commission in 2001. She was succeeded by Commissioner Michael C. Epps
who took his seat on the Commission in January of 2002. Commissioner Diane Legreide left the Commission in 2002 when she was named to head the Division of Motor Vehicles and she was not immediately replaced.
New legislation in 2002 allowed the Commission to further streamline operations and speeded up the process of approving changes to internal controls requested by casino operators. The Commission approved voucher systems for payment of winnings and allowed the vouchers to be used in other slot machines. It also reversed a prior change and reinstated the obligation that casinos award all progressive jackpots to a winning patron. Harrah’s opened a new hotel tower.
In November 2002, Linda M. Kassekert
was sworn in as the Commission’s sixth chair, and the first woman to hold that post, replacing Chairman James Hurley who had retired earlier in the year. A number of other employees also retired in 2002, including the first employee the Commission ever hired back in 1977, Cathy Hoffman.Las Vegas comes to Atlantic City
The market in Atlantic City changed forever in 2003 with the opening of the Borgata, the city’s first Las Vegas style resort. The 2,000-room facility was the first casino to open in over a decade and it quickly became the largest grossing property in the city. Showboat opened a new tower of hotel rooms as well. But tragedy also struck in 2003. A parking garage under construction as part of a major expansion of the Tropicana collapsed killing four construction workers.
Efforts to revitalize downtown Atlantic City took a big step forward with the opening of The Walk in 2003. The outlet mall, funded in part through the CRDA, transformed Michigan Avenue into an attractive shopping arcade linking the Convention Center with the hotels along the Boardwalk. Ralph Frulio
became the first staff member to retire and return as a commissioner. Frulio had joined the Commission staff in 1978 as an inspector. He rose to the position of Principal Inspector before retiring in 1996. In 2003, he was appointed to serve the last few months of Commissioner Legreide’s term and he was sworn in for a full term in January 2004.
Tropicana completed work on its new tower in 2004 as well as on the two-story restaurant, shopping and entertainment mall called The Quarter. The Cuban-themed addition quickly became a big attraction in the city. In addition, the city’s first casino hotel, Resorts, completed work on a new tower of hotel rooms. The Commission also assumed responsibility for the collection, auditing and reporting of five additional casino related taxes/fees that had been collected by the State’s Division of Taxation. They included the Casino Parking Fee
, the Casino Net Income Tax, the Casino Complimentary Tax, the Casino Hotel Room Fee and the Tax on Multi-Casino Progressive Slots. When combined with the Gross Revenue Tax, regulatory fees and fines, the Commission was responsible for certifying and collecting more than half a billion dollars of revenue to the state.
The casino industry passed the $5 billion mark in gaming revenue in 2005. However, slot machines were introduced in New York State at several racetracks. It was not yet a significant threat to Atlantic City’s industry, but would become so in the years to come.
In a complex transaction, Harrah’s Entertainment bought Caesars Entertainment. As a part of the deal, the company sold the Atlantic City Hilton to a unit of Colony Capital which also owned Resorts. The transactions needed Commission approval. Trump Hotels and Casinos emerged from bankruptcy as Trump Entertainment after the Commission reviewed its financial stability. At Showboat, the House of Blues opened in 2005.
In an unprecedented move, every casino in Atlantic City closed for several days in July 2006 because the Legislature had not adopted a budget and state government was shut down. The law required Commission inspectors to be present in casinos around the clock, but the government shut down prevented the state employees from working. While the closure hurt business, casino revenues peaked in 2006 at $5.2 billion. With business looking strong, Pinnacle Entertainment Inc. tried to buy Aztar Corp. which owned the Tropicana Hotel Casino, but was unsuccessful. Several months later, it returned and purchased the Sands Hotel Casino from Carl Icahn. The casino closed as Pinnacle developed plans to replace it with a much larger complex.
Kentucky businessman William Yung won a bidding war for Aztar Corp. which owned the Tropicana. At the very end of 2006 his firm, Wimar Tahoe Corp., received interim casino authorization to take control of operations there. But that was followed by a year so marked by management blunders and disregard for regulatory requirements that the Commission issued a record $750,000 fine and concluded the new owners were not qualified to hold a license. That decision, in late 2007, triggered a trust that took the property away from Yung’s firm and the Commission appointed a conservator to oversee the operation until a new owner could be found.Competition and the economy take a toll
In addition to dealing with the Tropicana conservatorship, Atlantic City’s casino industry, and the Casino Control Commission, faced a series of other challenges in 2007. Slot machines went into operation in Pennsylvania, cutting into Atlantic City’s gaming revenues. As a result, slot machine revenue dropped by almost $350 million, although that was slightly offset by a small increase in table revenue. This represented the first year in which casino revenues actually decreased. By the end of the year, there were slots in operation in Chester, Bensalem, Wilkes Barre and Mt. Pocono in Pennsylvania and in Yonkers, NY, all siphoning away business from Atlantic City. Another development that impacted revenues was the city’s decision to adopt an ordinance limiting smoking in casinos to no more than 25 percent of the gaming area. This was in addition to a downturn in the national economy. Despite the weakening, enthusiasm was still running strong as Pinnacle Entertainment imploded the Sands to clear the site in anticipation of building a new complex there.
The Commission developed and implemented regulations to allow casinos to test the new generation of server supported slot systems and it temporarily adopted regulations to permit electronic table games and allow electronic wagering at other gaming tables. The Commission also approved the largest takeover in the Atlantic City gaming industry. It granted Interim Casino Authorization to TPG Capital and Apollo Management to take over Harrah’s Entertainment and its four Atlantic City casino hotels.
Revenues continued to decline in 2008, but Atlantic City’s casinos continued to grow. Three new hotel towers – conceived when the market was much stronger – added 2,500 new hotel rooms to Atlantic City’s inventory, bringing the industry’s room count to more than 17,000. Borgata unveiled its boutique-style Water Club tower, the Trump Taj Mahal added its Chairman’s Tower and Harrah’s introduced its Waterfront Tower.
The Commission implemented new legislation that allowed casinos, after they reached a $90 million threshold, to deduct promotional gaming credits before determining taxable gross revenue. The change enabled casinos to better compete against casinos in surrounding jurisdictions.
Through the year, the Commission continued to deal with matters that stemmed from the decision not to renew the Tropicana’s casino license. The decision was appealed but upheld at the Appellate Division of Superior Court and later by the State Supreme Court. As a result of the appeals, the conservator was unable to complete a sale of the property by the end of the year. In 2009, he was able to set up a bidding process but faced numerous obstacles that made it impossible to complete a sale of the property for a second year.
As the economic situation nationally continued to erode in 2009, Atlantic City was hit hard. Colony Capital Corp., the owners of the struggling Resorts Casino Hotel, simply turned the property over to the banks and Trump Entertainment filed for reorganization in Bankruptcy Court again. The Commission further streamlined regulations to reduce the number of vendors who needed to be licensed and it implemented legislative changes that waived vendor licensing for large, publicly-traded corporations. Those and other changes helped the Commission to cut operating costs and continue to reduce staffing levels across the agency. Sharon Anne Harrington
was appointed commissioner in July 2009. Prior to joining the Casino Control Commission, Harrington served as Chief Administrator of the New Jersey Motor Vehicle Commission (“MVC”) from March 2004 through July 2009.
The Division of Gaming Enforcement filed a report with the Commission about MGM’s partnership with Pansy Ho in Macau in which it recommended the Commission find her unsuitable and require MGM to sever all ties to her. The Commission started to plan for an eventual hearing on the matter. Instead of a hearing, however, MGM and the Division of Gaming Enforcement reached a Stipulation of Settlement in which MGM agreed to sell its half interest in Borgata and put that interest into trust pending a sale.
Five casino hotels changed hands in 2010. Trump Entertainment, which had again sought protection in U.S. Bankruptcy Court, reorganized and emerged under new ownership which received Interim Casino Authorization. Tropicana was sold back to Tropicana Entertainment which had been purchased by its lenders after the former owner was ousted. Veteran industry executive Dennis Gomes partnered with investor Morris Bailey to purchase Resorts at the end of the year. In each case, the new owners received Interim Casino Authorization from the Commission and in Tropicana’s case, the new owners also received their plenary qualification in 2010. The industry continued to be hindered by growing competition in neighboring states. Pennsylvania legalized table games at its casinos, draining additional revenue away from Atlantic City operators.Edward J. Fanelle
was appointed to the Casino Control Commission by Governor Jon Corzine and was sworn in on February 1, 2010. Commissioner Sommeling’s term expired and he left the Commission in late 2010. Several months later in early 2011, Commissioner Epps resigned to pursue other opportunities. Neither departing commissioner was replaced.A new future
Late in 2010, the legislature passed a bill allowing the Commission to issue licenses to two “boutique” casinos – properties that would have fewer than 500 rooms. Gov. Chris Christie signed the bill in early 2011.
Gov. Christie also signed sweeping legislation in February 2011 that dramatically restructured the state’s gaming regulatory system and additional legislation to create a Tourism District and bolster the gaming industry’s sagging fortunes. The first bill transferred all of the Commission’s day-to-day regulatory responsibilities to the Division of Gaming Enforcement (“DGE”). The requirement for state inspectors in casinos around the clock was eliminated as was the need to pre-approve changes in internal controls. The Commission's staff was reduced from approximately 260 people to fewer than 60 people in 90 days. Fifty-six Commission employees were hired by the DGE while others either retired or were laid off. The Commission’s organizational structure was revamped and its five operating divisions were replaced with a new structure consisting of a Chief of Staff’s Office, General Counsel’s Office and Regulatory Affairs Division. As a result, the Commission’s budget was reduced from $24.4 million to $9.1 million.
After implementing the restructuring, the Commission granted Interim Casino Authorization to Golden Nugget to purchase and renovate the former Trump Marina Casino Hotel. The $150 million renovation completely transformed the property with an array of new restaurants, lounges, a modern casino, and refurbished hotel rooms.
In 2012, Revel casino hotel opened its doors after the Commission issued the company a license. At 710-feet, the 1,950-room hotel tower is the second tallest building in the state. The undulating façade of the facility is designed to reflect the beach and ocean. It was the first casino hotel to voluntarily open completely smoke-free.
With the Commission’s adjusted oversight responsibilities, the legislature passed and the governor signed a bill in 2012 that reduced the size of the Commission from five members to three, eliminating the two seats that had been vacant for more than a year. This provided additional savings to the casino industry as the Commission’s budget was reduced to $8.59 million.
As Chair Kassekert’s term ended in 2012, Gov. Christie appointed Matthew Levinson
to be the seventh chairman of the Commission. He was approved by the Senate and took his seat in August. As chairman, Levinson also holds a seat on the CRDA and is one of several people placed in key positions by Gov. Christie to ensure a coordinated approach to move Atlantic City forward.
Also in 2012, Gov. Christie nominated Alisa Cooper
to fill a seat that was vacated when Commissioner Fanelle resigned to pursue other opportunities. With the appointments of Levinson and Cooper – both Atlantic County residents – the majority of sitting commissioners are from the Atlantic City area for the first time in the Commission’s history.