Trump Entertainment Resorts Inc. plans to close one of its two Atlantic City casinos in September, putting about 1,000 people out of work in the seaside New Jersey resort town.
Employees were notified today that the company is reviewing options for the Trump Plaza Hotel & Casino and plans to shutter it as soon as Sept. 16, according to a statement from the company. That would leave the Atlantic City-based company with one property in the market, the Trump Taj Mahal.
The East Coast gambling hub is withering amid growing regional competition. The Atlantic Club closed in January, Caesars Entertainment Corp. (CZR) plans to shut the Showboat on Aug. 31, and Revel, the $2.4 billion mirrored-glass casino that was supposed to usher in a resurgence for the city, is searching for a buyer while in bankruptcy.
“The big issue for this region is that you’ll have 6,000 to 8,000 people who will now be unemployed,” Assemblyman Vincent Mazzeo, a Democrat who represents Atlantic City in the state legislature, said in a July 12 interview. “That’s going to have a devastating effect on our economy and on this region.”
The Trump Plaza has 1,009 employees, according to the New Jersey Division of Gaming Enforcement website.
Atlantic City lost its regional gambling monopoly as states including Pennsylvania, Maryland and New York legalized casinos or expanded betting to increase tax revenue. Casino revenue in the city has dropped for seven straight years, falling to $2.86 billion last year from a high of $5.07 billion in 2006, according to Bloomberg Industries.
June gambling revenue in Atlantic City fell 1.8 percent to $236 million from $240.2 million a year earlier, the division said today on its website. Excluding online activity, which amounted to $9.51 million, betting declined 5.7 percent.
Mazzeo said a buyer could emerge to rescue Trump Plaza and save jobs. That prospect is clouded by the need for an estimated $100 million in renovations and $20 million to $25 million in legacy pension costs, he said.
Trump Entertainment emerged from bankruptcy in 2010 with Donald Trump as a minority investor and no management role. He told the Buffalo News in April 2014 he held a small stake in the two properties.
New Jersey Governor Chris Christie announced in 2010 a five-year turnaround plan for Atlantic City that included a marketing push to increase non-gambling tourism. The state in November also began letting casinos offer online betting as a way to attract new business. Revenue hasn’t met forecasts.
Michael Drewniak, a spokesman for Christie, said the governor has grown “willing to listen” to discussions about the potential for allowing casinos outside Atlantic City.
Senate President Stephen Sweeney, a Democrat from West Deptford, said he, too, is willing to consider casinos in northern New Jersey provided the tax revenue provides a lifeline to Atlantic City.
The seaside resort can support six to eight casinos, based on current betting trends, Joseph Weinert, executive vice president at the consulting firm Spectrum Gaming Group, said today in a telephone interview. The city had 12 before the Atlantic Club closed in January.
“It’s going to remain one of the major gaming markets in this country,” Weinert said. “But it’s not going to be anywhere near where it was from a gross revenue standpoint.”
Trump Plaza is a 39-floor hotel with 906 rooms and 86,000 square feet of casino space, according to the company website.
Trump Plaza, Revel and Showboat employ 6,248 workers, according to state regulators. The lost jobs would come on top of the January closing of The Atlantic club casino, which wiped out about 1,600 jobs.
Morgan Stanley, the investment bank that originally owned 95 percent of the Revel project, acquired the land and funded construction before walking and writing off almost all of its $1.2 billion investment. The bank bought the 20 acres of beachfront land for $74 million in 2006, and contributed the holding to developer Kevin DeSanctis.
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