Trump Taj Mahal Among Atlantic City Casinos Seen at Risk to Shutby
Fitch says referendum to expand New Jersey gaming poses threat
Chris Christie passed bills for cash-strapped city last week
Four additional casinos in Atlantic City, including the Trump Taj Mahal, could shutter if gaming expands in New Jersey beyond the cash-strapped resort town.
A 10 percent decline in Atlantic City’s gross gaming revenue would put Donald Trump’s namesake casino at risk, according to a Fitch Ratings report released Thursday. It would take larger drops to imperil Resorts Casino and Golden Nugget, according to the analysis. Fitch predicts Bally’s Atlantic City also has an uncertain future.
A voter referendum in November could legalize gaming in New Jersey outside of Atlantic City. Though public opinion of gambling is mostly split evenly, and it would take at least four years to open a new in-state casino, the prospect of expansion poses a risk to the income generated by those remaining in Atlantic City, according to Fitch.
Atlantic City, which once had a monopoly on gambling on the East Coast, has been veering toward insolvency since a third of its parlors closed in 2014 amid heightened competition. Its tax base has tumbled by more than two thirds since 2010. New Jersey Governor Chris Christie last week signed two bills that will pull the 39,000-resident community from the brink of bankruptcy and give it about five months to right its finances.
Under the agreement, the state would provide Atlantic City with a bridge loan. Some gambling proceeds that go toward marketing would flow to the city, which would also receive fixed payments from casinos instead of property taxes to prevent the assessment appeals that have strained its finances. The measures will infuse the gambling hub with enough cash to pay bills and workers through October.
Trump, the presumptive Republican presidential nominee, no longer owns the casino and adjacent 2,010-room hotel, or the entertainment company. Trump Entertainment is now a subsidiary of billionaire Carl Icahn’s Icahn Enterprises LP.