Caesars Atlantic City

Caesars Entertainment is Atlantic City’s largest casino operator. The company’s three casino hotels — Bally’s, Caesars, shown, and Harrah’s Resort — represent 30% of the Atlantic City market.

Carl Icahn has appointed three people to the board of directors for Caesars Entertainment Corp., giving the billionaire hedge-fund manager a significant amount of influence over the gaming and hospitality company’s future.

In a statement Friday, Caesars and Icahn — who controls 9.78 percent of the company, according to recent filings with the U.S. Securities and Exchange Commission — announced an agreement that replaced three existing board members and allows for a fourth representative if a new CEO “who is acceptable to new directors” is not named in 45 days.

According to Reuters, Icahn has considered naming former Tropicana Atlantic City CEO Tony Rodio as the new chief executive to replace the outgoing Mark Frissora.

Wall Street reacted positively Friday to the news of Icahn’s involvement, with Caesars’ stock price up more than 4 percent at the end of Friday trading.

Caesars Entertainment is Atlantic City’s largest casino operator. The company’s three casino hotels — Bally’s, Caesars and Harrah’s Resort — represent 30 percent of the Atlantic City market.

Icahn, who has a checkered history with casino properties in the country’s second-largest gaming market, said in a news release Friday that “the best path forward for Caesars requires a thorough strategic process to sell or merge the company to further develop its already strong regional presence” in Las Vegas, but made no mention of Atlantic City.

Multiple requests for comment left with Icahn Enterprises’ Manhattan office were not returned.

“Caesars would be a great opportunity for certain investors who have already expressed interest, and I’m glad the Board will explore these opportunities,” Icahn said in the news release. “Independent of strategic alternatives, I believe Caesars should also be focused on leadership succession, disciplined capital allocation, improving operating performance and optimizing real estate and other assets.”

After selling Tropicana Entertainment and its real estate holdings in 2018 for $1.85 billion and with only a single vacant property left in his portfolio — Trump Plaza Hotel and Casino — there were thoughts Icahn’s relationship with Atlantic City was nearing an end.

“Carl Icahn is the dominant (Atlantic City) player,” tweeted Jim Kennedy, former executive director of the Casino Reinvestment Development Authority and a local economist, when news of Icahn’s stake in Caesars was made public last week. “Icahn has one mission — to enhance shareholder value. Not reinvent (Atlantic City).”

Icahn’s history in Atlantic City has produced mixed results.

In 2000, Icahn acquired the Sands Casino Hotel from bankruptcy for $65 million. Six years later, he added the property next-door, where the Traymore Hotel once stood, for $61 million. In 2006, Pinnacle Entertainment bought the Sands from Icahn for $270 million. The building was imploded in October 2007, and the lot has been vacant since.

The global investor is often credited with rescuing Tropicana Atlantic City in 2009 from bankruptcy and turning it into the second-highest gaming revenue-producing property in the market, under Rodio’s watch.

His attempts in 2017 to use nearly $5.6 million from casino investment alternative taxes, or IAT, to fund the demolition of Trump Plaza was blocked by Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, and the CRDA.

Icahn acquired Trump Plaza and Trump Taj Mahal Casino Resort as part of a debt-purchase deal with Trump Entertainment Resorts after one of the company’s three bankruptcies. A very public dispute with the local casino workers union, Unite Here Local 54, led to the closure of the Taj Mahal in 2016.

Hard Rock International and a group of local investors purchased the Boardwalk property for $50 million from Icahn in 2017 and spent $500 million on a complete renovation before reopening it in June 2018 as the Hard Rock Hotel & Casino Atlantic City.

EDITOR'S NOTE: This story has been updated to reflect Carl Icahn purchased the property where the Traymore Hotel in Atlantic City was, not the hotel itself.

Contact: 609-272-7222 ddanzis@pressofac.com Twitter @ACPressDanzis

Staff Writer

I cover Atlantic City government and the casino industry since joining The Press in early 2018. I formerly worked as a politics & government reporter for NJ Herald and received the First Amendment: Art Weissman Memorial NJPA Award two years in a row.

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