Hard Rock gains preliminary approval for casino license

By a 3-0 vote, the commission granted Hard Rock’s application for a statement of compliance, a preliminary step for securing a full-fledged New Jersey casino license if the company takes the plunge in Atlantic City.

However, Hard Rock CEO Jim Allen made it clear that the company also has hopes of operating a casino at the Meadowlands Racetrack in Bergen County.

“We believe that something in both Atlantic City and North Jersey could complement each other,” Allen told reporters after the commission meeting.

Hard Rock already holds a 16 percent ownership stake in the Meadowlands track, the most talked-about spot for a North Jersey casino if the legislature and New Jersey voters ever approve an expansion of casino gambling outside Atlantic City. It would take a state constitutional amendment to allow casinos in North Jersey, but pro-casino North Jersey lawmakers have been pushing hard for a voter referendum on the issue.

Allen stressed that Hard Rock would like to be the casino operator at the Meadowlands if Atlantic City-style gambling spreads to North Jersey.

“We want to be in position to potentially benefit from that,” he said.

The commission’s Hard Rock vote Thursday was limited to Atlantic City, since there is no licensing process or regulatory framework set up for any type of casino in North Jersey.

“The commission’s action only applies to the company’s suitability for license qualification in Atlantic City,” spokesman Daniel Heneghan said.

Hard Rock is keeping its options open for Atlantic City, Allen said. The company has tantalized Atlantic City for the past several years with tentative plans to build a new casino. At one point, it had proposed building a smaller-scale “boutique” casino, but scrapped the project in 2012 when Atlantic City’s casino woes intensified.

Allen, in hour-long testimony before the commission, noted that Hard Rock has no immediate plans to build or buy an Atlantic City casino. Of the two possibilities, he indicated that the more likely scenario would be for Hard Rock to acquire an existing property. Allen said Atlantic City remains “one of the greatest tourist cities in the world,” despite its prolonged casino slump and financial troubles.

“Hopefully, as things stabilize, companies like ours can revisit the market with a different business model,” he said.

Atlantic City is struggling to recover from the closing of the Atlantic Club, Showboat, Revel and Trump Plaza casinos last year. The closings wiped out a third of the casino market and cost 8,000 workers their jobs.

Allen disclosed Thursday that Hard Rock had made a bid to buy Revel — he did not reveal the amount — before the casino ended up in a bankruptcy auction last year. Although Hard Rock is no longer in the running to purchase Revel, it has been holding preliminary talks with the Florida real estate developer who has agreed to buy the shuttered megaresort out of bankruptcy for $95.4 million.

Allen emphasized that Hard Rock has no agreement with developer Glenn Straub for Revel. He did not say whether Hard Rock would be interested in managing the casino for Straub or taking another role in its operation.

“It’s an amazing building,” Allen said of Revel, an elaborately designed oceanfront complex that cost $2.4 billion to build in 2012.

Although Allen did not divulge any specific plans for Atlantic City, New Jersey casino regulators remain excited about the prospect of Hard Rock jumping into the market in the future.

“Hard Rock’s decision to seek a statement of compliance is a clear indication that it wants to be ready to enter the gaming industry here as quickly as possible when the opportunity arises,” Casino Control Commission Chairman Matthew Levinson said.

Hard Rock, a casino, restaurant and entertainment giant, is owned by the Seminole Indian tribe in Florida. With nearly 200 locations in 62 countries, it is one of the best-known brands in the entertainment industry, including its world-famous collection of rock ’n’ roll memorabilia.

Allen, though, sketched out some serious challenges that have made Hard Rock cautious about entering the Atlantic City market. He noted that it would make little financial sense to build a brand-new casino at a time when existing casinos have been closing. He also expressed concerns about the city’s aging infrastructure and limited air service.

Allen believes that more airlines must be lured to Atlantic City International Airport to build up the city’s overnight tourist market. Now dominated by day-trippers who arrive by car or bus, Atlantic City is currently served by only one commercial carrier, Spirit Airlines.

Earlier this month, Air Canada announced plans to launch summer service between Toronto and Atlantic City International Airport, giving the resort town direct access to the Canadian market for lucrative international tourists.

Allen said there should be a campaign to bring in more air service for tourists who would stay for two or three nights.

“The airlift is incredibly important,” he said.