Atlantic City: MGM returns, Revel sold

There was a happy ending for MGM Resorts International in its long soap opera with New Jersey gaming regulation. The New Jersey Casino Control Commission voted unanimously to relicense the company, reuniting it with Borgata — and with 86 million smackeroos that were being held in trust. This ends a process that’s been a year and a half in the making. Said NJCCC Chairman Matthew Levinson, “When I look over the last nine years, I see a company that looked for a way to get to the most lucrative gaming market on the planet … But I also see a company that took steps to remedy problems created by those shortcuts.” (Overseas, the news was spun as a verdict on Pansy Ho.)

The NJCCC was receptive to MGM’s contention that, with a 24% ownership stake, Ho’s influence was diluted and her involvement in management is nil. CEO James Murren also said he would “never forget and … always regret” having taken counsel from convicted felon and Kirk Kerkorian crony Terry Christensen. Also on hand was Boyd Gaming CEO Keith Smith, who assured regulators it would be business as usual at Borgata. There’s a case to be made both for and against the NJCCC’s clemency but the bottom line is that Atlantic City needs MGM a lot more than the reverse. It adds to a patina of class to a resort town that’s looking mighty scuffed at the moment.

* Ninety million. That’s the paltry number of dollars it cost Florida real estate developer Glenn Straub to buy Revel. Straub’s Polo North Country Club Inc. made an all-cash bid (at 4% of Revel’s initial cost), one that still has to run the gauntlet of bankruptcy court. Higher bids would have to be received by Sept. 23. A $3 million breakup fee, though, gives Revel owners incentive to make the deal with Straub. If this was the best offer on the table, what are the odds someone will aim to outbid him anyway? Clearly there’s hardly anyone out there who wants Revel, even at a Goodwill Store price tag.

Straub, for his part, has put $10 million into escrow. According to CalvinAyre.com, Revel ownership says the sale “is not contingent on Straub receiving a gaming license, meaning Revel’s days as a casino appear consigned to the ash heap of history.”

* Meanwhile, beleaguered Trump Entertainment Resorts received bankruptcy protection. It has a month to concoct a bankruptcy plan and 100 days to get it approved in order to win approval from Judge Kevin Gross to tap $30 million in funds that secure loans from Carl Icahn, Secured Creditor #1. Without that money, TER is toast. (Icahn’s group is owed $292 million.)

That’s just fine with union Unite-Here, which would as soon deal with an Icahn ownership as with current management. “They don’t want this to become a McDonald’s type job,” says national union President D. Taylor, who’s gambling that, in a bankruptcy, Icahn would take over Trump Taj Mahal and keep it operational. Current ownership has demanded workers renounce their pension plan and current benefits. In its place, it has offered a 401(k) and $2,000 toward an Affordable Care Act health plan. Unite-Here’s response was that it’s spinach and to hell with it.

Calling regime change inevitable, Local 54 President Robert McDevitt said, “The hardworking men and women at Taj Mahal are unwilling to sacrifice in order to enable the disastrous management team that has run this property into the ground to keep collecting a paycheck for a few more months.” For its part, the debt-juggling managerial team complains that $20 million a year in pensions and benefits is unsustainable.

Considering the inability of Trump Taj Mahal to stay upright despite having grossed $131 million during the first half of this year, what seems unsustainable is the tenure of CEO Robert Griffin (right)and his underlings, who have presided over a 25% revenue tailspin at Trump Plaza and a 13% one at the Taj. So toxic are these assets that “Advisers retained by the company canvassed lenders, partners, stockholders and other parties about purchasing one of the company’s casinos or making an investment in Trump Entertainment, and none have come forward,” reports Bloomberg News.

Ownership and labor will be required by the bankruptcy court to hold good-faith negotiations on the future of their contracts. Only if those fail can the court intervene. There’s one grim upside to the potential extinction of TER: It would remove the odious Trump name from the casino industry.

* There’s not been much transparency to operations at the Riviera. Until now. In applying to receive a share of the casino’s revenue stream, management company Paragon Gaming, run by industry lifer Diana Bennett, opened up about its experiences at the property since taking the reins. Although previous CEO Andy Choy seemed to be improving the physical plant, current Vice President George Scott Menke said Paragon inherited demoralized employees and “carpeting behind the hotel’s front desk [that] hadn’t been cleaned since the property opened more than a half-century ago.”

Mechanically and technically, the Riv was far from up to code. Bennett’s and Menke’s team inherited 200 violations, along with windows so dirty they required a power wash. There’s no word on the Riv’s financial performance but Paragon has at least another year to get it turned around before its contract expires.