If you don’t count the venerable Claridge Hotel, which Caesars Entertainment sold on the condition that it not be reopened as a casino, there are twelve. Three are closed – the Atlantic Club, Revel and Showboat Atlantic City. The active casinos are Bally’s Atlantic City Wild Wild West Casino, Caesars Atlantic City and Harrah’s Resort, all owned by Caesars Entertainment (which also holds title to the husk of the Showboat). Boyd Gaming co-owns Borgata Hotel Casino & Spa, in tandem with MGM Resorts International. Because MGM does not have a New Jersey gaming license, all of its revenue from Borgata is being held in trust by the state.
Other casinos on the Boardwalk are: Resorts Atlantic City, which is managed by the Mohegan Tribal Gaming Authority; Tropicana Atlantic City Casino Resort, owned by Carl Icahn; Trump Plaza, which will close on Sept. 16 and Trump Taj Mahal, which is filing for bankruptcy. Both are owned by Trump Entertainment Resorts, which is no longer run by Donald Trump. But The Donald holds a 9% stake in the casinos in return for the use of his and Ivanka Trump’s names and faces for promotional purposes. Over in the Marina District, near Borgata and Harrah’s, is the Golden Nugget, owned by Tilman Fertitta. It used to be Trump Marina but is doing much better under its new stewardship and name.
A quick note on the MGM situation: The company is currently working with the State of New Jersey to regain its gaming license. It surrendered that valuable document after the New Jersey Casino Control Commission took exception to the company’s association with Pansy and Stanley Ho in Macao, finding too much subterfuge in that relationship. The ‘bad actors’ in the episode having either left the company or died, the stage is set for MGM to be relicensed and unlock all that Borgata money that’s being held in trust.
As for Trump Taj Mahal, it not so long ago seemed almost unthinkable that it would go belly up. (It has one of the newest hotel towers on the Boardwalk and grossed $131 million through July.) Trump Entertainment Resorts is positioning the Chapter 11 filing as a last-ditch attempt to avert a mid-November closing. It is also using the situation to wrest additional concessions from its workforce. Labor union Unite-Here has accused Trump of demanding that unionized employees forfeit their pensions and medical benefits. Given the huge discrepancy between the Taj Mahal’s debts (as much as $500,000) and assets ($50,000), it will take a miracle – and some very forbearing creditors – to keep it in business.
It’s been obvious for quite a while that Atlantic City was oversupplied with casinos. The supply/demand equation has been seriously out of balance these last six years. However, we think few expected the market to ‘rightsize’ itself so drastically and in such a short space of time (it will be almost nine months to the day from the Atlantic Club’s closing to that of Trump Plaza). Even then, it remains to be seen whether subtracting as many as four or five casinos from the market in one year makes for an adequate relationship between the size of the customer base and the amount of gambling on offer. Some think the number of casinos could drop to as few as six. Others see the city being repositioned as a convention destination, and indeed Harrah’s is building a $125 million convention center.
There is also some question whether one or two of the closed casinos might reopen. (Not the Atlantic Club, which has been stripped of its gaming entitlement, and few hold out hope for a rebirth of Trump Plaza. Both had long been the city’s worst-performing casinos.) A bankruptcy-court sale of Revel failed to materialize when no adequate bids were made. One still hears rumblings, though, that it may be reopened as a casino-less resort hotel.
Mall developer Latitude 360 is expressing interest in the Showboat – a much-liked property that Caesars Entertainment was accused of closing too soon. Latitude 360 would reopen the property as a mix of dining, recreation and live entertainment. Atlantic Properties Group is pitching the idea of turning the Showboat into a boutique casino. Since Caesars would probably not want to bring new competition into the market, Latitude 360 seems likelier to prevail if Caesars chooses to sell. But, as the past year has shown, few things are predictable in Atlantic City.
