Court Opinion

ID: 9715823
Source: CourtListenerOpinion
Date Created: 2023-08-26 06:15:20.664977+00
Date Added: 2024-06-11T09:54:44.786849
License: Public Domain

*373PASHMAN, J.,
concurring in part and dissenting in part.
I concur with the majority opinion except insofar as it affirms the Casino Control Commission’s order that the Perlmans separate themselves from non-New Jersey subsidiaries of Caesars World International (CWI). I would remand the case to the Commission for a factual finding on the Perlmans’ ability to control Boardwalk Regency Corporation from positions in any other CWI subsidiaries.
The Casino Control Act provides that no corporation shall be eligible for a casino license unless its key employees or controlling persons are individually qualified for licenses. N.J.S.A. 5:12-85(c) provides in part:
No corporation shall be eligible to hold a casino license unless each officer; each director; each person who directly or indirectly holds any beneficial interest or ownership of the securities issued by the corporation; any person who in the opinion of the commission has the ability to control the corporation ... or other person whom the commission may consider appropriate for approval or qualification would, but for residence, individually be qualified for approval as a casino key employee pursuant to the provisions of the act.
When Boardwalk Regency applied for a license, Clifford Perl-man was chairman of the boards of directors of CWI and Caesars New Jersey (CNJ), the two parent corporations of Boardwalk Regency. Stuart Perlman was vice chairman of the boards of the two parent companies and a large stockholder in both. There was no question that they were key employees and controlling persons as defined in the statute.
However, it is no longer clear that the Perlmans fit within any of the categories of persons that must be individually qualified for Boardwalk Regency to retain its license under N.J.S.A. 5:12-85(c). They have sold all their stock in Caesars World and Caesars New Jersey and have resigned from their positions as officers in those corporations. Their sole remaining connection with the corporate family is Clifford Perlman’s position as chairman of the board of directors and chief executive officer of the subsidiary of Caesars World that operates its Nevada hotel and casino.
*374Since the Perlmans are no longer directors, officers, employees or owners of any of the parent companies of Boardwalk Regency, the only remaining statutory category possibly applicable to them is that of a “person who in the opinion of the commission has the ability to control” Boardwalk Regency. N.J.S.A. 5:12-85(e). The Commission has. never specifically determined whether the Perlmans would be able to control Boardwalk Regency solely from positions in other subsidiaries of Caesar’s World. There is no evidence in the record on the Perlmans’ ability to control the New Jersey licensee without control of and stock ownership in its parent corporations. Unless they are able to exercise such control, they need not be individually qualified for Boardwalk Regency to retain its license.
I am not convinced that the evidence cited by the majority, ante at 370-371, 372, is sufficient to conclude that the Perlmans can in fact control Boardwalk Regency from out-of-state CWI subsidiaries. The mere fact that the various corporations praise the Perlmans and want them back in the New Jersey licensee is not sufficient proof that the Perlmans can control the licensee solely from positions in other CWI subsidiaries. The evidence that the Nevada subsidiary offers counseling services to Boardwalk Regency is more to the point, but it is insufficiently developed in the record. Moreover, there is no evidence at all that the Perlmans can control Boardwalk Regency from non-gaming subsidiaries. As I see it, the factual situation has changed substantially since the Commission’s determination. Any order we make should be based on the current situation.
I would remand the case to the Commission for a hearing on the Perlmans’ continued ability to control the New Jersey licensee from positions in other CWI subsidiaries. This factual determination is a prerequisite to holding that either Perlman remains a controlling person within the meaning of N.J.S.A. 5:12-85(c). Without such a finding, there is no basis for requiring Clifford Perlman to withdraw from the Nevada subsidiary *375as a prerequisite to licensing Boardwalk Regency. There is also no factual basis for ordering the Perlmans to refrain from any future connections with other CWI subsidiaries. Because the majority upholds the Commission order that the Perlmans separate themselves from all CWI subsidiaries without such a factual determination, I dissent.
For affirmance and modification—Justices CLIFFORD, SCHREIBER, HANDLER, POLLOCK and O’HERN—5.
Concurring and dissenting in pari—Justice PASHMAN—1.