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Atlantic City Roundup

31 March 2003

by Joe Weinert

ATLANTIC CITY, New Jersey --Atlantic City casinos no longer have to worry about the threat of the state permitting video lottery terminals at racetracks.

Not for at least another year, any way.

"I think while video lottery has potential and is something the administration is looking into, it is not a realistic item for this year," said Eric Shuffler, counsel to New Jersey Gov. James McGreevey. "There are simply too many economic, legal and policy issues that need to be resolved before this can be legitimately debated by the state.

"And those issues, realistically, cannot be decided in the time frame necessary for this to be considered in this budget cycle," Shuffler said.

McGreevey had hoped that a VLT commission he created would be able to give the green light for the slot-like devices to be installed at the Meadowlands, Monmouth and Freehold tracks for fiscal year 2004, which begins July 1. The three tracks would undoubtedly siphon customers from the northern New Jersey-New York Metro area, the biggest feeder of Atlantic City casino gamblers.

"It is a wise choice," said Dennis Gomes, president of the Casino Association of New Jersey, which represents the 11 Atlantic City casinos. "The position of the industry remains the same -- we are opposed to building casinos at racetracks in New Jersey. We will maintain that opposition in the event that the threat resurfaces in the future."

McGreevey still has three other proposals alive that would harm Atlantic City casinos: hiking the gaming-revenue tax to 10 percent from 8 percent; imposing the 6 percent sales tax on casino complimentaries; and a hotel-occupancy tax.

"These proposed tax increases pose a danger to the continued viability of casino gaming in New Jersey, discourage future development in Atlantic City and threaten the jobs of thousands of tax-paying employees," Gomes said. "We remain committed to protecting the jobs of our 50,000 employees and to the growth of Atlantic City and will not agree to any proposal that singles out southern New Jersey's economy."

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Preliminary election returns within the dominant labor union in Atlantic City casinos show Robert McDevitt retaining the presidency by a 45-vote margin over challenger

Frank Viering, a Bally's bartender.

The U.S. Department of Labor is expected to announce the official results this, week, although protests could delay the outcome for weeks.

More members of Hotel Employees and Restaurant Employees Union Local 54 in Atlantic City voted for Viering, but McDevitt won by winning the outlying districts of Trenton and Cherry Hill. Viering said the Atlantic City vote should be a wakeup call for McDevitt to pay more attention to casino employees.

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Bally's Atlantic City agreed to pay $80,000 to settle charges that the electronic liquor dispensers in its bars displayed one brand liquor but were actually hooked up to another brand. And in each case, the brand dispensed was cheaper than the brand identified on the electronic dispensers.

For instance, Bally's bartenders and servers thought they were serving customers Crown Royal whiskey when in fact the dispenser tubes were connected behind the scenes to Canadian Club whiskey, which is about 40 percent cheaper. Bally's was also caught serving three different kinds of rums than were identified on the electronic dispensers.

State alcohol rules prohibit bars from serving any beverage other than what is ordered. Bars must also display the brand of liquor being served on an electronic dispenser if the bottle is not visible.

The Division of Gaming Enforcement said Bally's identified the wrong whiskey over a period of 18 months and the wrong rums for three years. The DGE, however, said Bally's made an honest mistake and was not trying to deceive customers.

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A demolition company that gaming investigators last fall linked to organized crime appears to have been cleared for license renewal.

Casino Control Commission Vice Chair Michael Fedorko ruled in his initial decision that the links between Mazzocchi Wrecking and three employees or union officials identified as associating with the DeCavalcante mob were incidental or of no consequence. Mazzocchi eliminated its most serious potential mob problem when it fired its operations manager, Charles DiMaria, just before Fedorko heard the case last fall.

The full casino commission is expected to consider the matter this spring. It's rare that any members vote against the initial decision.

Mazzocchi, formerly known as Maztec Environment, is a prominent demolition firm that participated in the 9-11 World Trade Center cleanup.

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Trump Hotels & Casino Resorts formally completed the $490 million bond sale that was critical to the future of Trump Marina in Atlantic City.

The company used proceeds solely to retire debt, including $312 million of Trump Marina debt that was due in November. The casino would not have had the cash to pay off the debt.

Moody's Investor Services, pleased that Trump eliminated a potential cash crunch, rewarded a related Trump debt unit with a ratings upgrade. It raised by one notch the $1.3 billion in first mortgage notes backed by the Trump Plaza and Trump Taj Mahal casinos to B3 from Caa1. That means the notes are considered low-grade as opposed to speculative.

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Caesars Atlantic City agreed to pay $20,000 to settle charges that it allowed a 19-year-old to play roulette almost two years ago. Caesars pointed out that it prevented or caught 14,148 minors from trying to gamble the same year.

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