Author: Casino Connection Staff

The New Jersey Casino Reinvestment Development Authority has approved $3.7 million in upgrades to Atlantic City’s Boardwalk Hall and convention center in newly approved projects in the resort.

The $3.7 million will go to improving the property’s HVAC systems, plumbing, painting, concrete and structural engineering services at the two properties. Both properties are operated by Spectra by Comcast Spectacor.

The improvements follow $2 million approved in February to upgrade four sets of out-of-service bathrooms at Boardwalk Hall.

“We are making an effort to bring Boardwalk Hall and the Convention Center up to date,” said Robert E. Mulcahy, chairman of the authority’s board of directors according to the Press of Atlantic City.

In another move, the resort’s city council approved a plan by the Tropicana casino to build a sky walk between its property and its newly acquired Chelsea Hotel. The casino has acquired the neighboring about 300-room, non-casino hotel and seeks to include it in its resort footprint.

“The bridge will provide convenience for our guests to easily access the south tower check-in and experience all of Tropicana’s amenities that are only just steps away,” said Tony Rodio, president and CEO of Tropicana Entertainment Inc.

The council approved air rights for the skywalk, which is still in the planning stages. Rodio said the casino hopes to begin construction by the end of the year.

Tropicana also announced it will close the popular Providence Nightclub in its entertainment/retail themed The Quarter.

Bob Pereira, founder of Metronome Hospitality Group, the operator of the club, confirmed to the Press of Atlantic City that the club will close after Labor Day weekend.

“Tropicana has some plans for the location,” Pereira told the paper, saying that the company is looking for another location in the city.

Tropicana did not say what specific plans it has for the space, but said it is hoping to open a new nightclub.

“We welcome guests to enjoy our 17 other nightlife venues and will look to open a new nightclub in that space in the near future,” Steve Callender, Tropicana Atlantic City general manager told the paper.

Finally, the Casino Reinvestment Development Authority announced it will hold public hearings in September on future development of Atlantic City’s Boardwalk, Marina District, Gardner’s Basin and other portions of the resort’s Tourism District.

The Press reports that the authority—which controls the city’s tourism district—is hoping to streamline its regulatory processes and cut red tape in attracting projects to the resort.

Governor Chris Christie signed a bill legalizing daily fantasy sports in the state. The industry will be regulated by the state Division of Gaming Enforcement. A tax rate of 10.5 percent will be imposed on the profits of DFS companies that operate in the state from players in the state. DFS officials estimated it would provide $6.6 million in tax revenues.

DFS companies praised the bill, calling it one of the best of the 16 states that have currently approved DFS wagering.

“The law establishes multiple layers of oversight, placing New Jersey at the forefront of consumer protection nationally, and creating a new source of tax revenue with major potential for growth in the state,” said Marc LaVorgna, a spokesman for DraftKings and FanDuel, in a statement.

The law allows DFS companies to partner with New Jersey casinos but does not require it.

With lawyers gearing up for this fall’s pivotal battle before the U.S. Supreme Court over the federal ban on sports betting, the casino industry’s D.C. lobbying arm has fired off another salvo at the ban, blasting it as a “failure” and blaming it for fostering a massive “black market” in unregulated betting.

“The harm of such federal overreach is more than purely structural,” said Stacy Papadopoulos, senior vice president of the American Gaming Association and the trade group’s general counsel.

In a recent post on SCOTUSblog, Papadopoulos said, “Preserving a state’s autonomy to enact, enforce, modify, and repeal its own laws as it sees fit protects individual rights and promotes democratic accountability.”

She claims the federal law―the 1992 Professional and Amateur Sports Protection Act, or PASPA―has ”fueled a thriving black market” that includes an “estimated 97 percent” of all bets on the Super Bowl and NCAA men’s basketball tournament, when Americans bet a total of about $15 billion.

“In Nevada, for example, where betting is legal and regulated, the demand for illegal bookmakers is practically nonexistent. So, as far as protecting players goes, the act fails completely,” she said.

She added, “PASPA also fails in another important element, which is protecting sporting events. In regulated betting markets, irregular betting partners and other shady activities are easily noticed. In the black market atmosphere, it is basically impossible to notice such activities.”

Moreover, she said, “Funds acquired through illegal betting activities are often used to fund organized crime activities like drug and human trafficking, racketeering, and money laundering.”

But it’s the “federal overreach” argument that appears to have resonated with the conservatively led high court, which agreed to consider New Jersey’s case against the ban over the objections of federal government lawyers and the NCAA and the major professional sports leagues and despite a string of U.S. District Court and Court of Appeals rulings upholding PASPA’s constitutionality.

Which is the core issue in Christie v. NCAA and New Jersey Thoroughbred Horsemen’s Association v. NCAA, which the Supreme Court has consolidated into one case―whether PASPA violates the 10th Amendment separation of powers between Congress and the states.

Spearheaded by then-U.S. Senator Bill Bradley of New Jersey, who feared a corrupting influence on sports from the spread of legal betting, PASPA made it illegal for states to “operate or authorize” a “lottery, sweepstakes or other betting, gambling, or wagering scheme based, directly or indirectly” on a competitive game featuring amateur or professional athletes. The act gave states a year to legalize betting within their borders if they chose, but none did, including New Jersey, whose casinos opposed sports books at the time as a competitive threat. The result was that the activity has remained legal in various forms, but only in the four states―Nevada, Oregon, Montana and Delaware―where it was regulated when the act passed.

That all changed a decade ago when the twin blows of the Great Recession and land-based competition in neighboring states sent the Atlantic City gambling market into a tailspin from which it never recovered. Sports betting suddenly loomed large as a potential profit center, and after several anti-PASPA legislative efforts failed to gain traction at the state level, in 2011, New Jersey voters approved amending the state Constitution to allow it. The legislature legalized it the following year. But the law was challenged in federal court by the NCAA and the major pro leagues and was shot down. The legislature then tried to circumvent PASPA by essentially repealing the state’s own betting ban. That also was dashed by the courts.

The argument the Supreme Court will consider is whether New Jersey Gov. Chris Christie and the Horsemen’s Association are right and PASPA represents a “dramatic, unprecedented” takeover of the state’s authority in direct violation of the 10th Amendment protection of states’ rights.

The argument, as framed recently by West Virginia Solicitor General Elbert Lin and Deputy Solicitor General Thomas M. Johnson goes that: “Congress can no more mandate that states not repeal or modify certain existing gambling laws than it can dictate to states how they must regulate radioactive waste or obligate state law enforcement officers to conduct background checks. (Congress) cannot simply commandeer state law to carry out federal policy the way that (the gambling law) does.”

Opponents, on the other hand, question why the court has even agreed to hear the case.

“PASPA’s prohibitions plainly do not require the legislating state either to act affirmatively or to expend resources or reputation by regulating a federal program,” said Michael Fagan, an adjunct professor of law at Washington University and coordinator of the Predatory Gambling Liability Project. “Unless at least five members of the Supreme Court seek to markedly expand or modify the anti-commandeering doctrine, it is difficult to see why the court granted certiorari in this case, in which the primary issues are clearly political, not constitutional.”

SCOTUSblog’s Amy Howe wrote, “The justices often grant review to resolve differences in opinion among the federal courts of appeals. However (as the leagues emphasized in urging the court to stay out of the dispute), there is no such division in this case and―when asked by the Supreme Court to weigh in―the federal government (whose opinions the justices take seriously) recommended that review be denied. The fact that the Supreme Court nonetheless agreed to take on the case suggests that at least several justices regard the 10th Amendment issue as an important one.”

No date has been set yet for oral arguments, but the case is expected to be one of the most significant in the court’s coming term.

As Lin remarked, Christie v. NCAA has the all the “markings of a sleeper blockbuster.”

Glenn Straub, the owner of the former Revel casino in Atlantic City is currently under investigation in Florida for allegedly placing fraudulent construction liens against the ranch and townhouse of a former girlfriend, according to the Miami Herald. The investigation is being conducted by the Broward County State Attorney’s Office.

According to the report, Straub’s company put a $64,400 lien on the ranch of ex-girlfriend Jessica Nicodemo, 33, for fencing and road work that was not paid for. Straub put another lien on Nicodemo’s townhouse for unpaid work on a pool and patio, according to the report.

The report quoted Nicodemo in court papers saying she wasn’t expecting to be charged for the work because she and Straub were dating, according to the report.

Straub denied the charges to the Press of Atlantic City.

“I didn’t know that she was a girlfriend,” Straub said. “There is no truth to the matter. To get back at us, she is saying that we excessively put too high a lien on her property. They can put anything in a lawsuit that they want.”

Following the liens, Straub tried to foreclose on both proprieties, according to the report.

The report just adds more drama to Straub’s so far fruitless attempt to open the casino, which has been bogged down in legal and regulatory disputes since he acquired the bankrupt casino for $82 million in 2015. Reports have surface that Straub is close to selling the property, but no announcements have been made and the massive building—built for $2.4 billion—remains closed.

Jim Whelan, the former mayor of Atlantic City, died suddenly last week. Whelan recently had surgery for kidney cancer, but was on the road to recovery, when felled by a massive heart attack at his home in the city.

Whelan, who was the current state senator representing Atlantic City, was from Philadelphia originally, but spent his summers in the Boardwalk town. He was a lifeguard in his teen years, became a championship swimmer at Temple University, and later became a teacher in the city’s school system. He ran for city council in the early 1980s, and was elected mayor in 1989. He served three terms as mayor until being defeated in 2001. He then served in the state Assembly from 2005 to 2007, when he was elected to the state Senate.

Whelan was elected mayor in a landslide because it had become clear by time that casino gaming was not the panacea that everyone had assumed it would be, and his platform of using money from the Casino Reinvestment Development Authority (CRDA) to grow the attractions of the city was widely accepted. During his term, Whelan participated in the approval and construction of the Walk, an outlet mall developed by the Cordish Companies in the middle of the city; the connector project that links the Atlantic City Expressway with the Marina district where construction was under way on what would become the Borgata casino, today the most successful casino in the city; and a baseball stadium that is currently vacant, but was home to the Atlantic City Surf of the independent Atlantic League for more than 10 years.

Whelan’s enduring contribution to Atlantic City, however, will be his passion for the city and his advocacy for everything that would benefit the city. He worked diligently with then-state Senator Bill Gormley to bring benefits to Atlantic City and be able to market the city beyond the northeast U.S.

A memorial service will be held at Boardwalk Hall on September 14. The receiving line to pay respect is scheduled from 10 a.m. to 11:30 a.m. The service is from 11:30 a.m. to 1 p.m.

An impasse between the Seneca Indian Nation and the state of New York over casino revenue-sharing payments has erupted into a war of words between the tribe and the office of Gov. Andrew Cuomo.

Last week, an expected meeting in Niagara Falls between the governor and Seneca President Todd Gates failed to come off, and a Cuomo spokesman said the state will consider placing a competing commercial casino in Niagara Falls unless the tribe resumes the payments, which the state says its federally mandated compact requires.

To complicate matters further, allegations have surfaced that the Senecas placed a listening device in an office the New York Gaming Commission leases from the tribe’s Buffalo casino.

The payments dispute erupted in March, when the Senecas announced they were ceasing 14 years of payments―25 percent of the slot machine revenues at their casinos in Niagara Falls, Buffalo and Salamanca―a sum totaling more than $1.4 billion since the compact came into effect in 2002.

The obligation ended with the expiration of the original agreement in 2016, so the tribe says. The state says the compact calls for the payments to continue another 10 years, based on a renegotiated agreement concluded in 2013.

The standoff has municipalities in 16 western New York counties―and particularly the casinos’ three host cities―struggling to make up a combined financial shortfall of more than $10 million a year.

“We believe if they don’t pay the compact is null and void,” an administration official said last week, speaking on condition of anonymity. “As a condition of that compact they get exclusivity, and if they don’t honor their end we’re going to explore how to put a casino in Niagara Falls.”

A Seneca spokesman responded, “The governor has had five months to meet with President Gates, five months to articulate his position to President Gates and five months to engage in productive dialogue with President Gates. Instead, he has routinely chosen media statements and attacks.”

He added, “The governor is turning to threats against the thousands of local jobs the Seneca Nation’s gaming operations have created in western New York.”

It’s not the first time that Cuomo has targeted the Senecas’ most lucrative casino market, although even in Niagara Falls revenues have been slipping in recent years in the increasingly saturated environment that characterizes gaming in New York. The state is home to seven tribal casinos, eight racinos and three new full-scale commercial casinos, with a fourth set to open in the Catskills next spring, 90 miles from New York City, not to mention pari-mutuel racing and a state lottery. State law also authorizes another three commercial casinos over the next 10 years, and developers are hoping those will go to the only market in the state that can be said to be underserved―New York City itself.

The two sides first fell out with each other in 2009 when the state authorized machine gaming at racetracks. The Senecas claimed the expansion violated the regional exclusivity the tribe was guaranteed under the terms of the 2002 compact and halted revenue sharing. The dispute was resolved with the 2013 deal and the payments resumed when the state agreed to slash a portion of the tribe’s financial obligation and affirmed the tribe’s regional monopoly.

The opening earlier this year of the first upstate commercial casinos may have reignited the old dispute. Specifically, the tribe is said to be angry over the location of the new del Lago Resort & Casino, which opened in February in Tyre in the Finger Lakes region on the boundary of the Senecas’ exclusivity zone.

The eavesdropping allegation has added a new wrinkle.

The Erie County District Attorney’s Office confirmed last week that it’s investigating claims by Gaming Commission workers that the Seneca Gaming Authority planted a listening device in their Buffalo casino office. The commission has regulatory oversight of casinos in New York and has staff at every Native American casino in the state. A source with direct knowledge of the investigation, who spoke on condition of anonymity, confirmed to the Buffalo News that the device was discovered about a year ago.

The Governor’s Office cited the revelation in explaining the failure of last week’s Cuomo-Gates meeting to come off.

“Given the publicly reported and verified criminal investigation in the Seneca Nation that commenced approximately a year ago, it would be inappropriate for the governor to meet with the Seneca Nation until the matter is resolved by the Erie County District Attorney,’’ Alphonso David, Cuomo’s counsel, said in a written statement.

The tribe says the matter concerns a Seneca Gaming employee and is unrelated to the compact dispute. Gates said last week the two issues are “completely unrelated.”

“Let’s not distract from, nor try to politicize, the fact that Governor Cuomo has now canceled two meetings with the Seneca Nation regarding an issue that is important to the people he was elected to represent,’’ he said.

“The governor should spend his time trying to figure out how he will fulfill the state’s continued obligation under the compact to provide payments to the local governments rather than continuing to seek ways to discredit the Seneca Nation.”