Revel Casino Hotel.atlantic city (website image)
The planned shuttering of three casinos over Labor Day weekend or soon after—Revel, Showboat and Trump Plaza—would seem to have dealt a cruel hand to the legal industry in Atlantic City, N.J. But, nearly four decades after gambling was legalized in the city, lawyers there say they’re carrying on.
“We have clients who are going to be closing—obviously, it has an impact,” Lloyd D. Levenson, CEO of Atlantic City’s Cooper Levenson, said. “But we learned a long, long time ago … diversify one’s practice.”
For attorneys in real estate, land use, tax and other practices utilized by casinos, diversification has meant finding work in other sectors, particularly development of nongaming properties.
For those in the tight-knit gaming practice, it has meant branching into areas where gambling has been legalized—the very jurisdictions that removed Atlantic City’s distinction as the lone option for East Coast gamblers.
“I couldn’t make a living on the business that we have in Atlantic City,” said Nicholas Casiello Jr. He chairs Philadelphia-based Fox Rothschild’s gaming practice group and practices in the firm’s 30-lawyer Atlantic City office.
“The closing process for a casino generates a lot of work. But of course a closed casino generates none,” he said.
According to Casiello, Fox Rothschild has represented Revel’s prior and current ownership in bankruptcy, regulatory and litigation matters.
“That closure will have an impact on our business, but … we are extremely busy,” Casiello said, noting that the firm has seven full-time lawyers handling casino licensing and regulatory work, along with two associate hires planned for that practice.
It’s out-of-state and international work that’s sustaining the practice, Casiello said.
The firm represents, in addition to casinos, manufacturers of gaming equipment and private equity funds who invest in gaming and require licensure to do so. Also, the practice has expanded into other jurisdictions, including Pennsylvania, which dealt the most devastating blow to Atlantic City when it legalized gambling a decade ago, according to Casiello.
“It was different in Atlantic City in the beginning because, other than the Nevada lawyers, no one had gaming regulatory experience,” Casiello said, referring to the early days of legalized gambling in the late 1970s and early 1980s. “At that point in time, all my work was in Atlantic City, and there was enough to sustain me and others.”
But now, aside from Pennsylvania, gambling has been legalized in several other states. For example, Casiello said MGM Resorts International in recent years has tapped Fox Rothschild to represent it in licensure matters in Maryland and Massachusetts.
“If I needed a gaming lawyer in Mississippi, I can think of at least three,” Casiello said. “That’s true in every jurisdiction.”
Cooper Levenson, too, has expanded its gaming practice into other jurisdictions, including Ohio, Missouri and Mississippi, as well as Pennsylvania. And Internet gaming, according to Levenson, also “has brought a whole group of new clients to the firm.”
While gaming attorneys have been in demand elsewhere, the impending casino closures are “not good news” for other practices, such as employment, personal injury and real estate, Casiello said.
“While the nongaming amenities are growing, I don’t think they can replace the loss of business from the closure of casinos—certainly not today,” Casiello said.
Levenson, however, said the situation isn’t so dire.
“Despite Atlantic City’s problems, there’s a lot of new people coming to town who want to develop things other than casinos,” Levenson said, pointing to what he called strong land use, bankruptcy and creditors’ rights, as well as corporate and tax practices at Cooper Levenson.
The firm represented the buyer of both the Claridge Hotel and the Atlantic Club, neither of which is expected to include a casino, though each one did in years past.
Those establishments, lacking gaming, still will require employment and personal injury defense, according to Levenson, who also cited what he characterized as a steady flow of visitors for concerts and conventions, as well as the recent air show, which reportedly drew more than 800,000 people.
“They’ll come and they’ll stay at hotels,” Levenson said. “It’s just that the people who came just for gambling aren’t coming anymore.”
Stephen Hankin of Atlantic City’s Hankin Sandman Palladino & Weintrob agreed that nongaming activity has sustained the bar in the city. Casino closures are “going to have a de minimis impact, in my view,” he said.
Hankin Sandman represented Tropicana for 25 years before an ownership change stanched that flow. The Atlantic County Improvement Authority also is a former client.
But most practices are “not dependent on casinos at all,” Hankin said, pointing to ocean, bay and pinelands construction, real estate development, water rights and dune litigation.
“We don’t represent casinos anymore. We’ve gotten away from it. A lot of lawyers have,” Hankin said.
“The demise of casinos was bound to happen,” he added. “It’s natural attenuation. It’s supply and demand.”
Hankin instead concentrates on real estate transactions and related litigation. “There is plenty of that here,” he said. “There will always be plenty of that here.”
The firm has done work in connection with the years-long redevelopment of the Steel Pier, according to Hankin, who also pointed to city-owned Bader Field, once a municipal airport, and the Pier Shops at Caesars as two other sites ripe for redevelopment.
Revenue has been steady at Hankin Sandman, but leaning totally on casino business over the years would have meant a different fate for the firm, Hankin said.
That “was my fear during the Trop years,” he said. “Absolutely, we would have been out of business.”
Louis Barbone of Jacobs & Barbone in Atlantic City, who largely represents plaintiffs in whistleblower and other employment matters, said casino business has not had a strong impact on his work either. “We don’t … rely upon suits against casinos,” he said of his firm.
Barbone said business has been “the slowest it’s ever been” over the last year or two, and “everyone has taken a hit,” but the decline is related to the overall economy rather than the casinos’ decline specifically.
While some firms have sustained or even thrived, Atlantic City hasn’t always been accommodating to outsiders.
Newark’s Sills Cummis & Gross had a strong presence there for years, led by founding partner Clive Cummis. Cummis, who died in 2010, helped spearhead the campaign to bring legalized gambling to Atlantic City.
“We were there in the beginning,” Sills Cummis managing partner R. Max Crane said. “We were there when it was all good and the gravy was there. … We followed the trend, for good and for less good.”
The firm initially bought a condominium in the city to cut down on commuting time and by the mid-1980s had opened an office, which, at peak levels, staffed about 15 lawyers, Crane said.
Sills Cummis had a varied practice that included gaming, employment law, insurance defense, transactional, real estate and corporate financing, but it relied significantly on Park Place Entertainment, the former owner of Bally’s. When the casino-resort was acquired by Harrah’s, the firm’s role was greatly reduced, and the office closed by 2004, Crane said.
“In hindsight, the handwriting was on the wall years ago,” he said.
Still, Sills Cummis maintains a gaming practice and represents clients in Atlantic City, Crane said.
“Like many other clients, you don’t really need to be in their backyard to represent them,” Crane added. “If the client wants us, they know where we are.”
As for the casino closures, Crane said: “My guess is, it’s hurting legal work generally for that market … I wouldn’t call it a growth market in this state, either geographically or industry-wise.”
More recently, Princeton, N.J.-based Hill Wallack came and went, though the pullout was driven more by personnel than revenue, according to Richard DeLucry, a partner who subsequently joined Cooper Levenson in 2012.
Hill Wallack opened a small shop in Atlantic City as of Jan. 1, 2007, following the acquisition of Sandson & DeLucry. But attorney Noah Bronkesh took a Superior Court judgeship, and a conflict arose in connection with DeLucry’s casino clients when Hill Wallack was contracted to do work for the state Casino Reinvestment Development Authority, DeLucry said. The office closed in 2011.
At least one firm—Archer & Greiner, based in Haddonfield, N.J.—had been looking for a merger partner in Atlantic City in recent years, but couldn’t strike a deal and instead opted for a Red Bank, N.J., office.
Several lawyers said the casinos, especially Revel, are likely to find buyers soon and won’t remain closed for long.
And gaming, like many other industries, and Atlantic City, like many other markets, is in transition, according to Casiello.
“Lawyers do well in good times and bad times—it’s just a question of which kinds of practices do well,” he said. “There will be opportunities for lawyers in this area. It just may be in different areas of the practice.”
Contact the reporter at firstname.lastname@example.org.