Glenn Straub Owns the Equipment, But Cannot Legally Possess It Until He Is Licensed
The New Jersey Division of Gaming Enforcement has ruled that Glenn Straub cannot assume Revel Casino’s gaming license simply by purchasing the property, Straub and his Polo North Country Club have been banned from possessing the gambling equipment inside the building until he acquires a license.
Power is expected to be restored to the Revel Building sometime this week. It was expected that Straub and his employees would take control of the equipment inside, including gaming tables and slot machines, in anticipation of reopening the Revel Casino in short order. The DGE said that would not be the case; it is illegal under state law for Glenn Straub to own that gambling equipment.
Casino Key Employee License
For the time being, the Division of Gaming Enforcement says that Straub must hire an employee with a casino key employee license on the premises at all times. This employee will take responsibility for the gambling equipment. Such a duty includes keeping the machinery secure, but also includes oversight of the said equipment.
Meanwhile, Glenn Straub needs to undergo the process of being licensed for gaming operations. Simply winning the right to own the Revel Casino in bankruptcy court does not confer on Straub the license the previous owners had.
The Licensing Process
In practical terms, Straub and Polo North need to undergo an extensive background check by the DGE. He also might need to answer questions at a hearing, to clarify information found in the vetting process. Most importantly for the state (and perhaps for Straub), he’ll need to pay a licensing fee. Such fees tend to be a million dollars or more, with an additional several hundred thousand dollars as a recurring fee every 3 to 5 years.
Such regulatory oversight is often the bane of businessmen moving from some other region of the country to the northeast, which has more than its share of government regulators and union concerns. Glenn Straub is a businessman from South Florida. While many northeasterners move to Florida to retire, the state also has the more business-friendly approach of a southern state. Glenn Straub might be considering that, given the complicated nature of the Revel Casino deal.
Revel Casino Bankruptcy Process
When Revel Casino declared bankrutpcy in September 2014, it was placed into a bankruptcy auction a month later. In that process, no one but Polo North Golf Club filed a bid. Straub made a $90 million bid on the $2.4 billion resort. At the last moment, Brookfield Asset Management entered the bidding. After a contentious bankruptcy auction, Brookfield emerged as the winner of the auction with a $110 million bid, compared to Straub’s $94.5 million bid.
Then Brookfield Management pulled out of the deal in November 2014, citing the $3 million-per-month energy costs on the building. Straub became the sole bidder once more, though he sued to get the price of the resort lowered from $94.5 million down to $87 million (the original $90 million price minus the stalking horse fee of $3 million he’d pocketed).
Litigation and Contention with AC Locals
Along the way, one could have gotten the impression Straub had rubbed the local business and political leaders the wrong way. Several times prior to finalizing the purchase of Revel Casino, Glenn Straub ended up in court against Revel AC, ACR Energy Partners, and the tenants of the Revel Casino. Several times, he charged negotiations were handled unfairly. The judge in the case gave outside investors a chance on a couple of occasions to make last-minute bids, and groups from both Los Angeles and New York City tried to undercut Straub’s deals.
Eventually, Wells Fargo balked at funding the bankruptcy process any longer, after purchasing the lien on the casino on December 22, 2014 for $26 million. When they company bankrolling the process threatened to withdraw its support, Judge Gloria Burns finally okayed a deal between Revel AC and Polo North for an $82 million sale price. Glenn Straub seemed to have his casino, finally.
Revel Casino Since the Purchase
Since then, he has been in court against ACR Energy Partners, the company which sells energy to Revel Casino for $3 million a month. The price of electricity seemed to be the final hurdle to surmount. Now, the Division of Gaming Enforcement is saying Straub must purchase his own gaming license.
Glenn Straub might have seen this coming. He seems to have good lawyers and has no doubt done his research on the Atlantic City casino gaming industry. Most other outside buyers have had to gain licensing approval after a purchase in the past.
