Under proposed plan, 8 of 11 Atlantic City casinos would be controlled by Icahn and Black

A U.S. Bankruptcy Court's approval of the sale of Tropicana's Atlantic City casino to a group that includes Carl Icahn might mean that two individuals, Icahn and money manager Leon Black, would control eight out of eleven Atlantic City casinos. Icahn could own four of the casinos – with the Tropicana and the Taj Mahal being the two largest – and Apollo Management, the private equity firm run by Black, owns Harrah's, which has four casinos in New Jersey.

On Friday, Icahn and Beal Bank (Andrew Beal was the owner of the controversial Brick Towers, a Newark housing project that was torn down in 2006 over the objection of Mayor Cory Booker) presented a restricting plan to pick up the debt on Trump Entertainment Resorts. With two other casinos, Resorts and Hilton, reportedly experiencing severe financial issues, it's possible that Borgota could be the lone casino not controlled by Icahn and Black.

The bankruptcy judge, Judith Wizmer, is deciding whether to pick Icahn's proposal over one submitted by the noteholders for control of the Taj Mahal and three other casinos.

The potential consolidation of power within New Jersey's gaming industry will create an interesting political issue for the state Casino Control Commission (CCC), and for the state's political elite. Expect union leaders to have some serious questions about the collective bargaining power of Icahn and Black. These issues will come just as state government begins a transition from one governor to another and during an extreme fiscal crisis where the state will want to maximize casino revenue. It will be up to the CCC, and Gov.-elect Christopher Christie's new Director of the Division of Gaming Enforcement (DGE) to decide if they want to weigh in with the U.S. Bankruptcy Court. Christie is expected to name a new Attorney General today, and he has not said if the current DGE director, Josh Lichtblau, will be replaced.

Casino ownership became an issue in the recent gubernatorial campaign following a Star-Ledger story suggesting that Gov. Jon Corzine had a personal stake in a hedge fund that also had a large piece of Harrahs. Christie accused Corzine of violating a state law that prohibits public officials from having any financial connection to the casino industry. Corzine maintained that the state Division of Gaming Enforcement conducted a forensic review of Texas Pacific Group (TPG) and its affiliates and "found no financial connection between TPG and TPG-Axon." Corzine got in some trouble four years ago when he invested in Icahn's hedge fund, even though he knew that he was running for governor – a post that could be in direct conflict with the corporate raider's Atlantic City interests.

Under proposed plan, 8 of 11 Atlantic City casinos would be controlled by Icahn and Black