Ever since the Pennsylvania slot machines started to roll the casinos in Atlantic City have taken a hit. Figures from May show that there was a 5.5% drop in casino win from May 2006, with slots revenue decreasing by 7%. Nearby New York is also attracting Atlantic City customers at its gambling venues and the partial smoking ban at casinos in New Jersey is affecting profits. Atlantic City, according to one analyst, has become a ‘difficult operating environment.’

Yesterday it was revealed that talks between Trump Entertainment Resorts and possible purchasers of its three Atlantic City casinos had broken down and the properties are unlikely to be sold. The company says it will continue to focus on the cost cutting moves that have already led to two executive vice presidents going with no plans to fill their positions and the exit of the former CEO. On granting 5-year operating extensions to the three Trump casino licences, the New Jersey Casino Control Commission expressed doubt that Trump Entertainment Resorts would achieve its 3-year financial projections.

According to Commission data, two of the Trump properties – Trump Marina and Trump Plaza – had the lowest casino win in May of all eleven Atlantic City casinos. Trump Taj Mahal fared somewhat better but is still not in the same league as top performing Borgata. Two new large casino developments on the Boardwalk will eventually be further competition for the Trump properties. Trump casinos in Atlantic City have twice been reorganised following bankruptcy proceedings and the newly named company is estimated to carry debt of around US$1.4 billion.

With the state of the present market and the apparent inability of Trump Entertainment Resorts to forge ahead and into profit, it is not surprising that a potential sale of the company has run into difficulties. None of the interest so far expressed by possible purchasers has met company expectations and a future move may be to offer the casinos for sale individually. In the meantime, as the company share price tumbles, its business as usual with added emphasis on cost-cutting measures and attracting more high rollers. (E-07.03.07)

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