Posted on 08/14/2014 7:59:50 AM PDT by SeekAndFind
Politicians often are very shrewd investors — with their own money. If Al Gore wanted to move his money around in cash, he’d need a fleet of forklifts. But they’re rotten investors with your money. President Barack Obama had his Solyndra, and New Jersey governor Chris Christie has his casino, Revel, the multibillion-dollar Atlantic City boondoggle that, having declared bankruptcy — twice — just announced that it will be closing its doors and putting its 3,100 employees out of work.
Thanks to Governor Christie and the New Jersey Economic Development Authority, the taxpayers of New Jersey are quasi-partners in this venture, having swapped a few hundred million dollars in tax credits for 20 percent of the profits in a venture that never had, and never has, shown a profit. Governor Christie was not reading the market: Morgan Stanley took a $1.2 billion loss on Revel and pulled out. The Export-Import Bank of China sniffed around but ultimately turned up its snout.
After Governor Christie put taxpayers on the hook, Revel was able to put together another $1.5 billion in financing. Canyon Capital, a hedge fund holding $200 million in New Jersey public-pension money, took a piece, and the state pension board approved a $300 million bet on Chatham Investments, a hedge fund with a 28 percent stake in the troubled casino. (That money has not yet changed hands.) Apparently, even the Chi-Coms don’t have so much money sloshing around that they want to toss it into a despair-ridden New Jersey sinkhole organized around a moribund industry with a criminal past and a bleak future.
On top of the tax credits, there were millions of dollars in training grants, tens of millions in support from the Casino Reinvestment Development Authority,
(Excerpt) Read more at nationalreview.com ...
You can’t build that for less than a bill and a half?
I haven’t been to Atlantic City since I was in college in Philadelphia almost thirty years ago.
Is it still a disgusting slum full of the most depressing assortment of people anywhere?
I wonder why no one wants to go there to lose their money to a coalition of mobsters and government pimps?
Gambling revenue isn’t the whole story.
There is this article from August 7
Atlantic City OKs 29 percent property tax hike
http://www.nj.com/atlantic/index.ssf/2014/08/atlantic_city_oks_29_percent_tax_hike.html
The timing of the casino closing and the announcement of the tax hike would seem to be highly relevant.
People can’t do math.
When the only places to legally gamble are Vegas and Atlantic City, both can do really well. People come from all over and bring their money to lose.
But you simply can’t have a Vegas in every state and Indian reservation. Dilutes the market so much nobody does well.
Vegas will continue to do well because there’s a lot more to do there than gamble. Going to Vegas is an experience like nothing else in the USA.
Riverboat casinos on the Mississippi, not so much. And quite possibly not Atlantic City either.
A race track in MN would love to do that but the indians have a bought and paid for legislature so their monopoly is safe.
IIRC, the Revel was non-smoking when it first opened. That’s when I knew it was doomed.
I understand there is going to be a big casino in the grand canyon using the canyon as a gimmick. I suppose they will have them on the moon and mars soon./s
Government is best for the high bidder.
At least Bugsy Siegel got whacked.
As soon as Trump got involved I knew it was doomed.
RE: When the only places to legally gamble are Vegas and Atlantic City, both can do really well. People come from all over and bring their money to lose.
But you simply can’t have a Vegas in every state and Indian reservation. Dilutes the market so much nobody does well.
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YEP. As the article notes...
The New Jersey gambling industry is imploding, in no small part because its cartel faces new competition from Pennsylvania and New York, which have recently legalized casinos.
And some think they have come upon a clever answer: More casinos!
Paul Fireman, a former Reebok executive, proposes to build a 95-story casino/condominium/107,000-seat racetrack/giant Ferris wheel (not kidding), not in Atlantic City but in Jersey City, directly across the Hudson from the World Trade Center, a convenient location for all those Manhattanites and Brooklyn hipsters aching to spend an evening playing “Sex and the City” video slots next to a seafood buffet in Jersey City.
I’d love to see the market research profiling the sort of people who want to buy what are presumably going to be pricey condominiums atop a New Jersey casino encircled by a NASCAR track and complemented by what is promised to be the world’s largest Ferris wheel.
Wasn’t aware of the PA and NY laws.
People are weird. Every crappy little city wants to launch an “urban revitalization project,” which is almost always centered on a convention center.
As if we can all get rich by hosting each other’s conventions. Or there’s massive demand out there by groups to hold their conventions in Tulsa or Buffalo.
There are places people want to go for other reasons, and convention centers can do very well there: Manhattan, Vegas, San Fran, Denver, New Orleans, Orlando, etc. Many places on the coast orin the mountains.
But the notion that the Springfields of IL, MA, MO (among others) are going to be hugely popular locations for major conventions is delusional.
They didn’t build that....
The Detroit Casinos were going to save the City. Apparently it didn’t work out.
Revel was doomed from the start. There’s already enough casinos in AC and they were never going to compete with the Borgata.
I haven’t been to A.C. since it became a gambling town. It was nice. We stayed at Haddon Hall. Hot and cold water in the bathrooms — salt and fresh. Bell hops, elevator operators, bicycle rentals, classic boardwalk treats. Really nice separation of classes.
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