Tesla Powered Down by Atlantic City Officials, Company Barred From Doing Business With Casinos
Posted on: January 9, 2019, 09:25h.
Last updated on: January 9, 2019, 09:25h.
Tesla, the automotive and energy company led by billionaire Elon Musk, is barred from doing business with Atlantic City casinos for the next five years. That’s according to the New Jersey Division of Gaming Enforcement (DGE), which stated recently that the company is not an approved vendor and gaming resorts therefore cannot conduct business with the electric car manufacturer.
The state gaming regulator said Tesla had not done business with any Atlantic City casinos within the past year, but there are several charging stations located between the Golden Nugget and Borgata in the city’s Marina District.
DGE Director David Rebuck said in a letter explaining the agency’s decision that requests to Tesla to complete the appropriate forms to become a licensed vendor went uncompleted. “When you (Tesla) were contacted again, you claimed the division was harassing you, insisting that you not be contacted again.”
Per the DGE website, any company that wishes to do business with Atlantic City casinos must become a licensed vendor. “Licensure is the cornerstone of the regulatory system,” the agency declares.
Rebuck didn’t specify what business dealings Tesla might have been seeking with casinos.
Tesla and Gambling Intertwine
It was revealed in October that billionaire Larry Ellison has a $1 billion stake in Tesla. The Oracle founder, who Forbes estimates to be worth more than $58 billion, is also the newest Tesla board member.
Ellison says his three million shares in Tesla is his second-largest investment. The 10th-wealthiest person in the world, the billionaire made his fortune through database software and technology, cloud engineering, and other enterprise software.
But Ellison will soon become the newest billionaire invested in the gaming industry, albeit in a small way by his standards.
Ellison acquired the shuttered Cal Neva casino resort in Lake Tahoe in January of 2018. The former Rat Pack hangout that was made famous through Frank Sinatra’s ownership in the 1950s was sold to Ellison in bankruptcy for $35.8 million.
According to the Lake Tahoe Planning Commission, Ellison’s team is working to fully renovate the iconic resort, and intends to reopen the property as a five-star casino destination.
Casino Tax Credits
Musk isn’t too far removed from the gaming industry. Last summer, it was revealed that the Tesla Gigafactory in Nevada was selling valuable unused tax credits to Las Vegas casinos.
Since Tesla continues to remain unprofitable – the company’s net income was nearly $2 billion in the red last year – it doesn’t need the credits. MGM Resorts and several other casino operators reportedly purchased $131 million worth of the tax deferments in 2017.
Nevada enticed Tesla to build its gigantic lithium-ion battery plant in Sparks by offering the company $195 million in transferable tax credits over a seven-year period that began in 2016. If Tesla doesn’t use the assets, they are considered forfeited.
MGM and the other casinos likely purchased the credits on the cheap, as Pew Research says transferable tax credits are typically sold at 85 to 90 cents on the dollar.
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