Trump's Unhappy Philadelphia Story
Donald Trump had a rough day on Dec. 20. First news hit that the flamboyant chairman of Trump Entertainment Resorts (TRMP) lost out on a bid to build a casino in Pennsylvania. Then investors punished the casino hotel operator's stock.
The Pennsylvania Gaming Control Board on Dec. 20 awarded five licenses for operating slot-machine facilities. HSP Gaming, LP can build its SugarHouse Casino along the Delaware River. Philadelphia Entertainment's Foxwoods Casino Philadelphia will be located in South Philadelphia. Majestic Star can operate The PITG Gaming Casino in Pittsburgh. The Mount Airy Casino can be at Paradise Township in the Poconos. And Las Vegas Sands (LVS) now has the right to liven up the former Bethlehem Steel plant in the City of Bethlehem with its The Sands Bethworks Casino.
Tad Decker, Chairman of the Gaming Control Board, describes it all as for the greater good of Pennsylvania. "Creating a new industry is a complex and arduous journey, but I can now stand with my fellow Board members and announce to the citizens of Pennsylvania that they are a step closer to significant property tax relief, additional jobs, and a reinvigorated horse-racing industry," he said in a press release Dec. 20.
But the Keystone State will have to transform itself into a gambling haven without The Donald. His Atlantic City company's shares sank 13.2% in value to $19.80 per share in late trading on the Nasdaq. Trump Entertainment Resorts' stock price fell faster than other casino companies locked out of the Pennsylvania contest on Dec. 20, such as the Isle of Capri Casinos (ISLE), which shed 6.5% of its value to trade at $26.82 per share on the Nasdaq. Pinnacle Entertainment Inc. (PNK) gave up 2.5% to $34.64 per share on the New York Stock Exchange. Meanwhile Las Vegas Sands' stock held its value at $91.24 per share.
Trump Entertainment Resorts' CEO James B. Perry said he was "disappointed" in a press release Dec. 20.
But Perry didn't give up hope for his company's business elsewhere. "We continue to pursue opportunities to introduce the Trump brand to other gaming markets both nationally and internationally, and we are very pleased with the ongoing expansion and renovation of our Atlantic City resorts," Perry added. For example, the company is building things like a new hotel tower and pit for the table game Baccarat at the casino the Taj Mahal. It's also renovating the transportation center at Trump Plaza and putting in new restaurants at Trump Marina, among other things.