New Jersey went from being the gambling mecca of the east coast just a few years back, to losing a third of its casino properties in 2014 alone. Down from 12 to 8 gambling establishments in Atlantic City, it appears another member of the industry is going to be out of business next month. Trump Taj Mahal, which saw its online poker and casino gaming partner, Ultimate Gaming, exit the state earlier this month, is scheduled to close its doors November 13, but the company hasn’t given up on the property just yet.
Trump Entertainment Resorts, parent company of Trump Taj Mahal, has filed for major concessions in the district courts as a last ditch effort to save the casino. According to a report in the Press of Atlantic City, the casino is demanding hundreds of millions worth of allowances from multiple entities, including the government, state tax department, the local union and its first-lien lender. If all parties fail to agree, Trump Taj Mahal will close next month, sending another 2,000 people (on top of the 8,000+ who were already displaced by casino closures this year) to the unemployment lines.
The largest concession would have to come from the loan department, wherein the casino company is requesting a squashing of the $288 million it already owes, as well as an additional $100 million in equity capital. However, that’s also the easiest part of the allowance to allocate. The lender has already agreed to the terms, so long as all other concessions are met.
Trump Taj Mahal has asked for another $25 million to fund improvements to the property. That portion would need to be supplied by a government agency, most likely the Casino Reinvestment Development Authority. If that segment of the concessions falls through, the first-lien lender could withdrawal its offer. But again, that’s not the full scope of the casino’s demands.
The company also asks that UNITE-HERE, part of the Local 54 union that subsidizes casino employees in New Jersey, give the Trump Taj Mahal a huge break. The company wants to discontinue payments to the union’s health and welfare fund, requesting that they obtain coverage through the federal government’s recently invoked Affordable Care Act.
Atlantic City has already lost four casinos this year, and if the Trump Taj Mahal is added to that list, the total would drop from 12 to 7 in 2014 alone. Ultimate Gaming, which operated an online poker room, Ultimate Poker, and an online casino, Ucasino.com, via a partnership with the Atlantic City casino, bowed out the moment its partner filed for bankruptcy earlier this month. Betfair Casino, however, which was partnered with Trump Resorts’ other New Jersey property, Trump Plaza, filed for a temporary agreement from the state to continue its internet gambling operations after the casino closed on September 15th. That approval was subsequently granted. Being that Ultimate Gaming hasn’t seen much success in New Jersey – nothing like its online poker room has in Nevada – the iGaming operator chose not to petition for similar sanctions.
It’s difficult to delineate what the effects of this year’s events will have on the Garden State’s gambling industry in 2015. Some might say that, as was originally feared, online gambling is cannibalizing the land-based gaming industry in the state. However, it’s more likely that expansion projects in nearby states like Pennsylvania and Maryland are to blame. Without enough tourists traveling to the one-time-epicenter of gambling on the east coast, there is no longer enough income being generated to support so many casinos operating in Atlantic City.