Lone Star illegality; Showboat hits shoals

Texas lacks the will to legalize casino gambling, yet it shrugs off a black-market version of it that is estimated to generate $1.9 billion a year. Under Texas law, you can own slot machines so long as their “payout” is in non-cash items. Yet a burgeoning — and increasingly brazen — number of operators are doing cash-and-carry business right out in the open. A “fuzzy animals” law, written to protect Chuck E. Cheese from prosecution, opened the door to “eight-liner” terminals that can be played for cash. And this is drawing the attention of the Department of Homeland Security, not least for its money-laundering potential.

It’s not a glamorous business. Renegade casinos “have turned up in spaces that from the outside appeared to be karate schools, car dealerships, lawn mower repair shops and, in the South Texas town of Alton last year, a molecular lab.” (It’s like something out of Breaking Bad.) State-level officials exacerbate the problem by insisting that enforcement of anti-gambling laws devolve to the local level. Perhaps the state’s laxity is motivated by the $10 million it collects yearly in taxes on coin-operated machines.

And, the longer Texas fails to act, the more audacious the black-market casinos get. A former gravel warehouse now boasts “at least 100 machines; a giant, sparkling chandelier; pictures of Marilyn Monroe on the red walls; and free hot dogs.”  You wonder why Texas settles for a few million in taxes when it could have legitimate casinos and hundreds of millions of dollars.

* Although Caesars Entertainment thought it was rid of the Showboat, like a boomerang the property might be coming right back. Voiding the purchase is one of the options that Stockton University is contemplating now that its plans for a Boardwalk campus have run into serious opposition. Even as their own revenue spirals ever downward, Trump Taj Mahal executives have nothing better to do than make trouble for their neighbor. They’re citing a 1988 covenant which decrees that the adjacent Showboat must always be operated as a resort hotel. And they’ve caught Stockton at a bad moment: It must finalize contracts for conversion into a university facility within the next three weeks — hard to do when a legal battle blows up in your face.

“Stockton tried to establish a full campus in Atlantic City six times during my tenure as president and got kicked in the teeth each time. This time, we were stabbed in the heart.
Candidly, Caesars Entertainment was to resolve a 1988 covenant with Trump Taj Mahal, and we were led to believe that had happened. However, it did not, and Trump Taj Mahal does not want a university campus near its property,” college President Herman Saatkamp vented to The Associated Press.

Unite-Here Local 54 President Robert McDevitt was downright apoplectic. “This is a guy who has decided to disembowel the entire city to help his economic advancement,” he said of Taj owner-in-waiting Carl Icahn. “He has a boarded-up facility [Trump Plaza] in the center of town, and at the other end of town, he’s stopping the first good news this city has had in the last three or four years, just as the delivery trucks are pulling up to start the renovations. He has slave labor at the Taj, a boarded-up facility at the Plaza, and now he’s sticking his foot out to trip the best development this city would have seen in years.”

Responded Trump Entertainment Resorts, “The facts are that our company does not think having a college next door to the Taj is good for our company. Having kids under 21 who will attempt to gain entry to the casino and engage in activities reserved for those only 21 and older would create numerous problems we do not want, and could damage the Taj’s ability to attract customers and regain its financial health. You do not see a college on the Las Vegas Strip.” Challenging Caesars’ judgment, it told an NBC-TV affiliate in Philadelphia, “We question why the former Atlantic Club site was not selected? It was closed, in very good condition and not connected to an open and operating casino. It was already deeded to be a non-casino hotel and owned by Caesars. The neighborhood would be ideal for a campus. What happened?”

What happened was that Stockton wasn’t exactly blindsided by the covenant, but the fine print indeed showed that Caesars was supposed to have it removed and that Stockton would be held harmless from any litigation that arose. This did not impress Trump Senior Vice President of Marketing Operations Kathleen McSweeney, who sneered, “Before spending $18 million, did Dr. Saatkamp ask to see a piece of paper ‘resolving’ the issue?” If Trump wins, it will be a hollow victory resulting in one more empty building on the Boardwalk.

* Kudos to The D owner Derek Stevens for what he plans to do if his $1 million wager on the Michigan State mens’ basketball team pays off. Every Golden Gate and D employee will receive a bonus, drawn from Stevens’ winnings. Stevens says he had trouble finding a casino willing to take his action but Golden Nugget owner Tilman Fertitta eventually OK’d the wager. While I had no rooting interest in the Spartans, pro or con, now for the sake all of all Stevens’ workforce, I hope they go all the way.