Atlantic City casino workers union demands speedy action against New York investors who want to “squeeze” money out of the local gambling industry
The labor union representing more than a third of Atlantic City’s casino workers urged Wednesday state gaming regulators to take quick actions to protect the industry and those employed in it from the disastrous impact Wall Street investors could unleash in their pursuit of quick profit, The Press of Atlantic City writes.
A number of New York hedge funds have recently bought stock in companies that operate casino resorts in Atlantic City, most prominently MGM Resorts International and Caesars Entertainment Corp.
UNITE HERE! Local 54, which represents more than 10,000 casino workers, told the New Jersey Casino Control Commission during a Wednesday public meeting that the regulator needs to take measures in order to protect employees at Boardwalk properties from “potentially hostile actions” of company investors.
Local 54 President Bob McDevitt told regulators that they are “uniquely positioned” to interfere if investors’ “only interest is to squeeze money out of the company and it’s going to hurt the industry” in Atlantic City.
According to Mr. McDevitt, in their pursuit of quick profit, hedge funds could hurt the city’s casino businesses and market, and by default, those employed at the gambling venues.
Local 54’s History with a Particular New York Investor
As mentioned earlier, Local 54’s concerns were particularly focused on the recently intensified interest of Wall Street hedge funds in MGM and Caesars, two of the world’s biggest casino companies and major players in Atlantic City’s gaming market.
Mr. McDevitt told casino commissioners that private equity proved to be a disaster for Caesars after its nightmare 2008 Apollo Global Management/TPG Capital buyout. The Local 54 President went on that Caesars’ employees “witnessed years of cuts to jobs and maintenance.”
The company also moved to close its Showboat property in 2014 in a bid to protect its other Boardwalk casinos. It currently operates Caesars Atlantic City, Bally’s, and Harrah’s.
New York activist investor Carl Icahn has recently become Caesars’ largest shareholder after amassing a 28.5% stake in the casino powerhouse. Mr. Icahn has secured board representation and will also have a say in the selection of the company’s new Chief Executive who will succeed its outgoing CEO Mark Frissora.
Mr. Icahn previously owned several Atlantic City casinos, including the former Trump Taj Mahal (now Hard Rock Hotel & Casino Atlantic City). In the summer of 2016, the businessman and Local 54 locked horns over Trump Taj Mahal workers’ contracts. The dispute escalated in a 102-day workers strike that prompted the property’s closure in October 2016.
Asked Wednesday whether Mr. McDevitt’s concerns were related to the labor union’s bitter row with the New York businessman, the Local 54 President said that the focus was not solely on Mr. Icahn and pointed to the fact that several Wall Street hedge funds have also recently bought MGM stock.
Mr. McDevitt further elaborated that investors that only want to “pull money out of people’s pockets in Atlantic City just because they are in a minority position of owning a casino” should not be granted licenses by state regulators.
Casino Control Commission Chairman James Plousis said Wednesday that state regulators would “do [their] due diligence on all [gaming license] applications as they come forward.”
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