NJ Supreme Court Sides Against Ocean Casino Resort in COVID-19 Insurance Case

Quick Intro

The New Jersey Supreme Court has ruled against Ocean Casino Resort in a significant case regarding business interruption insurance claims related to the COVID-19 pandemic. The court determined that the Atlantic City casino is not entitled to insurance payouts, despite the operator’s assertion of losses during the outbreak. Notably, Ocean Casino Resort has reported positive financial outcomes recently, rebounding robustly from the pandemic and continuing as a leading venue in Atlantic City.

Ocean Casino’s Unsuccessful Legal Challenge Against Insurers

Ocean Casino Resort’s legal battle involved claims against three insurance companies: AIG Specialty Insurance Co., American Guarantee & Liability Insurance Co., and Interstate Fire & Casualty Co. These insurers mainly refused payouts, arguing that the casino didn’t experience direct physical loss or damage due to the pandemic. Although Ocean Casino initially overcame an attempt by the insurers to dismiss the case, an appellate court later overturned this decision.

The New Jersey Supreme Court then took up the case to clarify the legal definition of loss or damage. The court unanimously concluded that to qualify for payouts, Ocean Casino needed to prove direct physical damage to its property, which the COVID-19 pandemic did not cause.

Nationwide Precedent Set by New Jersey Supreme Court

This ruling by the New Jersey Supreme Court is in line with other state and federal court decisions across the United States. These courts have consistently denied insurance claims linked to business interruptions during the pandemic, affecting various industries, including movie theaters, real estate firms, hotels, and law offices.

Ocean Casino Resort’s Post-Pandemic Recovery

Despite its legal setback, Ocean Casino Resort has largely bounced back from the pandemic’s impact. The casino reported substantial revenue growth in November 2023, with total gaming revenue reaching $48.1 million in October, a 52.6% increase from the previous year.

The casino remains in a strong position to leverage the increasing popularity of gambling in the US. The balance between land-based and online gaming in the region has been advantageous, allowing Ocean Casino to target bettors who prefer a comprehensive leisure experience, particularly those in the VIP segment.

Final Thoughts

The New Jersey Supreme Court’s decision not only resolves a significant legal dispute but also sets a precedent for future cases in the US gaming industry. This ruling encourages operators like Ocean Casino Resort to look beyond the challenges of the pandemic, focusing on seizing new opportunities and enhancing customer experiences in a post-pandemic era.