Impossible choice at Trump Taj; Ultimate Poker busts

Ownership of Trump Taj Mahal has handed down to workers a choice that might be described as being between bad and worse: accept the loss of their health and pension benefits or, if Unite-Here continues to pursue an appeal in court, loss their jobs when the casino closes in mid-December. Trump Entertainment Resorts CEO Robert Griffin describes the Taj as “a very sick patient lying on its death bed and his partner, the union, who is supposed to help, is instead hitting him over the head with a hammer.”

Griffin’s rant makes you wonder if even union concessions will be enough to keep the Taj alive, especially since management concedes “we are quickly running out of money.” TER’s hopes still ride on a Rube Goldberg plan whereby Carl Icahn (below) buys and the property and recapitalizes it … but only in return for a $175 million taxpayer bailout, an idea to which Gov. Chris Christie (R) was described as “decidedly cool.”

Taj housekeeper Bina Vashi was eloquent in her address to New Jersey lawmakers, saying, “When Trump came out of bankruptcy in 2010, Icahn almost doubled the interest he was charging to 12 percent. The increase meant he made an extra $17 million a year, while I was making less than $17 per hour. Now he is blaming the health insurance that I rely on to keep healthy for Taj’s financial problems. I want politicians to understand that Carl Icahn has a history of stripping workers of their benefits and that they need to stand up to this bully with us.”

As for the larger picture of Atlantic City‘s economic future, diversification can’t come fast enough for Mayor Don Guardian and others. Hizzoner touts a giant, in-progress Bass Pro Shops, while Caesars Entertainment‘s regional vice president, Rick Mazer, looks to his company’s Waterfront Conference Center for an infusion of business. “This is the business that I think will evolve and regrow Atlantic City,” he told National Public Radio.

“You simply are not going to consume your way out of the morass that you’re in. Doing things like building more retail, building more convention centers, has a very, very limited upside,” replies Stockton College economist Oliver Cooke. Ironically, Cooke may find himself teaching on the Boardwalk, now that Stockton has purchased the ex-Showboat casino as a oceanside campus.

* Across the country, the failings of Trump Taj Mahal have already claimed a casualty. Station Casinos is calling it quits on Internet gambling, shuttering its Ultimate Gaming unit. Company Chairman Tom Breitling blamed “an extremely cost-prohibitive and challenging operating environment,” although with approval being state-by-state of necessity, I don’t know what he expected.

There are only three jurisdictions for Internet poker and no interstate play. Concluded Breitling, “These factors have combined to make the path to profitability very difficult and uncertain. Consequently, we have decided to cease operations.” Not only did Ultimate have the lowest-performing site in New Jersey, revenues from all poker sites in Nevada declined from $1 million in June to $693,000 in September.

Station’s move orphans five poker Web sites operated by the Peppermill chain of northern Nevada casinos. It also leaves the Silver State with only two only operators — WSOP.com and Michael Gaughan‘s RealGaming. A $10 million loss attributable to Ultimate in 3Q14 appears to have been the final nail in Ultimate’s coffin. Given this latest disappointment for Internet gambling, the fears of Sheldon Adelson and his allies look even more overblown.