The casino alleges firefighters caused excessive damage during an emergency response that shut down gambling operations and resulted in extensive water damage.
ATLANTIC CITY, N.J. — Ocean Casino Resort is seeking approximately $1.5 million from Atlantic City, alleging that the city's fire department mishandled its response to a small fire in July, causing extensive water damage and forcing the temporary shutdown of the casino's gambling operations.
The resort submitted a notice of tort claim to the city on October 5, according to documents reported by BreakingAC and included in materials for the October 28 Atlantic City Council meeting.
The claim alleges that firefighters caused unnecessary damage while responding to a July 27 fire inside the Boardwalk resort.
The allegations have not been proven, and the filing is a preliminary step toward possible litigation rather than a lawsuit establishing liability.
The incident occurred during the height of Atlantic City's summer tourism season and temporarily shut down all gambling operations at one of the city's largest casinos.
Small Fire Leads to Major Damage
Atlantic City firefighters were dispatched to Ocean Casino Resort at approximately 5:31 a.m. on Monday, July 27, after a fire was reported in a linen collection room.
According to information released by the fire department at the time, crews encountered heavy smoke and burning debris.
Firefighters extinguished the blaze, but a water pipe burst during the response, releasing a substantial amount of water into the building.
The flooding caused part of the ceiling in the hotel's lobby to collapse and affected elevator shafts, hallways and other areas.
Water also damaged systems supporting the casino's gambling operations.
Ocean subsequently suspended all gaming activity, including slot machines, table games and sports betting.
A scheduled $30,000 slot tournament was canceled.
The resort's hotel, restaurants, pools and most other amenities remained open.
No injuries were reported.
Gambling operations resumed the following day, July 28.
At the time, the resort thanked its employees, business partners and the New Jersey Division of Gaming Enforcement for helping restore operations.
The fire department reported that the cause of the original fire was under investigation.
Casino Alleges Firefighters Were Negligent
Nearly three months after the incident, Ocean Casino Resort is now seeking compensation from the city for what it contends was an improperly handled emergency response.
According to BreakingAC, the notice was submitted by attorney Justin Santagata and alleges gross negligence in the fire department's response.
The filing describes the alleged conduct as "gross negligence, careless and wanton damages caused at Ocean Casino in response to a fire."
The notice also alleges that the department's actions resulted in excessive damage, including the burst water pipe.
However, the publicly reported claim does not provide a detailed explanation of precisely what firefighters allegedly did wrong or how their actions caused the pipe to rupture.
That distinction is significant.
The fact that a pipe burst during firefighting operations does not, by itself, establish negligence.
Firefighters responding to an active fire may need to make immediate decisions to protect lives and prevent flames from spreading.
Whether the damage was an unavoidable consequence of extinguishing the fire or resulted from improper conduct remains an unresolved question.
The claim identifies Battalion Chief Paul Hess as the only fire department employee specifically named in the filing.
Ocean Casino security shift manager Kevin Kenny is identified as a witness.
Neither the allegations against the department nor the naming of an employee establishes wrongdoing.
How the Casino Calculates Its Losses
The claim seeks approximately $1.5 million for property damage and business losses resulting from the incident.
According to reporting on the notice and its supporting estimates, the resort identifies approximately $500,000 to $600,000 in property-related expenses and another $700,000 in business interruption losses.
Among the specific costs identified are:
$488,613 in architectural and engineering fees.
$59,602 in hotel cancellations.
$49,345 to repair the collapsed lobby ceiling.
$23,668 in compensation provided to hotel guests.
$9,751 for carpeting, padding and tile installation.
$8,444 for ductwork replacement.
$5,331 for ceiling tiles.
$5,303 in damaged gaming-related inventory, including playing cards.
The filing also indicates that approximately $100,000 in repairs had already been completed.
The individual amounts provide a more detailed picture of the disruption than the original reports of a burst pipe and temporary gaming shutdown.
They also raise questions about the full scope of the damage and the basis for the resort's business interruption calculations.
The reported categories and estimates have not been independently audited by South Jersey NewsBeat.
The figures represent losses asserted by the casino, not damages awarded by a court or agreed upon by the city.
Casino Shut Down During Busy Summer Period
The July 27 incident occurred during a busy summer period for Atlantic City's casino industry.
Ocean Casino Resort was forced to suspend gambling for much of the day, creating an unusual interruption at a major Boardwalk property.
The closure affected slots, table games and sports wagering, even though many other resort amenities remained operational.
The interruption also came during a period of relatively strong casino revenue.
In its July 2026 gaming industry analysis, Stockton University's Lloyd D. Levenson Institute of Gaming, Hospitality and Tourism noted that the fire and flooding could have negatively affected Ocean's monthly performance.
Despite the disruption, Atlantic City's casino industry recorded a 7% year-over-year increase in brick-and-mortar gross gaming revenue for July.
The institute also noted that casino operators collectively recorded one of their strongest July performances in more than a decade.
Ocean's claim concerns its own losses from the incident, rather than the overall industry's performance.
What Happens Next?
A notice of tort claim is generally required before pursuing certain claims against a public entity in New Jersey.
It provides the government with information about an alleged injury or loss and gives officials an opportunity to investigate the circumstances.
Filing the notice does not automatically result in a lawsuit, settlement or payment.
Atlantic City could dispute the allegations, investigate the claim, involve its insurance or risk-management representatives, or potentially negotiate a resolution.
If the dispute proceeds to litigation, the central questions could include whether firefighters breached an applicable duty of care, whether their actions caused the alleged damage and whether the claimed financial losses can be substantiated.
As of the latest available reporting, Atlantic City Mayor Marty Small and the city's fire chief had not publicly responded to the allegations.
No finding of negligence against the department has been established.
Another Major Claim Against Atlantic City
The Ocean Casino Resort filing comes as Atlantic City faces another substantial claim involving alleged municipal misconduct.
Earlier this month, Sweet Leaf's Dispensary submitted a notice seeking more than $5 million in damages related to allegations involving the city's cannabis licensing process and former Cannabis Review Board chairman Kashawn McKinley.
McKinley faces federal bribery-related charges and is presumed innocent unless proven guilty.
The two claims involve entirely separate incidents and allegations.
However, their emergence within weeks of each other raises broader questions about the city's exposure to potential legal costs and how such claims are reviewed.
The combined amounts sought in the two notices exceed $6.5 million.
That figure does not represent an established debt or anticipated taxpayer expense. Both claims remain allegations, and neither amount has been awarded.
Questions Still Unanswered
Several important questions remain about the Ocean Casino Resort incident.
The city has not publicly explained whether an internal review found any problems with the July firefighting response.
The publicly reported notice also does not establish what caused the pipe to burst or whether the casino's own building systems played any role.
It remains unclear whether the resort's insurance covered any of the losses, whether the city or its insurer has evaluated the claim, and whether the parties have discussed a possible settlement.
The original cause of the fire also has not been established in the available reporting.
For now, the dispute centers on an emergency response that successfully extinguished a fire without injuries but was followed by extensive water damage and the temporary shutdown of casino gambling.
Ocean Casino Resort contends that Atlantic City should be financially responsible for the resulting losses.
Whether the city bears any legal responsibility remains to be determined.
About the Author
Karen Johnson
With over 30 years of news experience in major markets like Los Angeles, Denver, and Columbus, Karen now covers our area for South Jersey NewsBeat. She also brings her articulate and conversational news delivery to WOND radio listeners every weekday. Her background includes work with the NBC Radio Network, and she thrives in fast-paced news environments.
