The Trump Taj Mahal closing rumors are everywhere in Atlantic City as more casinos seem to be shuttering amid a bad economy.
According to The Inquisitr, Donald Trump himself said it’s a sad situation as thousands of employees may be losing their jobs. The billionaire also claims that Atlantic City went bad when he exited. The rumors are based on the company’s comments in a recent filing to the state Division of Gaming Enforcement.
The Trump Taj Mahal closing reports are also coming directly from the owners. Recently, the filing to the state Division of Gaming Enforcement detailed financial figures for the second quarter of 2014. It notes that the company’s cash flow has been “adversely affected” by a number of factors, including a steady decline in spending by visitors that has cut into the company’s bottom line.
It also cites “extremely cold winter weather and frequent snowstorms in the Mid-Atlantic United States, increased utility costs, intense competition in our market and surrounding markets, and current economic conditions.”
The filing doesn’t confirm the Trump Taj Mahal closing rumors, but the filing does strike an ominous note. The state Division of Gaming Enforcement filing stated:
“If the Company is unable to achieve significant revenue increases and improvements in its operating results, the Company will have difficulty funding its operations and meeting its payment obligations, unless the Company is able to obtain additional sources of liquidity or restructure its business and/or its indebtedness and other obligations … There can be no assurance that the Company will achieve such revenue increases or that it will be successful in obtaining additional sources of liquidity.”
Roger Gros, publisher of Global Gaming Business magazine and an expert on the Atlantic City casino expert industry, said Friday that he expects WARN notices - for The Worker Adjustment and Retraining Notification Act, a federal law that requires companies to notify workers of a possible pending closing - would be sent to the casino’s more than 2,000 employees next week.
“I think they believed they could make it until next year, but they didn’t do as well as they hoped this summer, so there’s a really good chance this property will close down by early November.”
Beyond the possibility of the loss of another casino, the filing holds immediate bad news for Atlantic City. Trump Taj Mahal paid its second-quarter property-tax bill after reaching a settlement with the city on a reduction of the casino’s valuation. But the filing indicates that, based on the casino’s financial distress, the third-quarter taxes will not be paid and such payments will be suspended “indefinitely.”
If the Trump Taj Mahal closing rumors are true, it will be the fifth casino to shut down in Atlantic City since the beginning of the year. The Atlantic Club, formerly the Atlantic City Hilton, closed in January. Showboat closed on Aug. 30, and $2.4 billion Revel - which just opened in 2012 - was shuttered on Tuesday. Trump Plaza — owned by the same company as the Taj Mahal — meanwhile, is scheduled to close on Sept. 16.
In a recent note to investors, Deutsche Bank gaming analyst Andrew Zarnett - who said earlier this year that “six, maybe seven” casinos could survive in Atlantic City in the wake of increasing intrastate competition - targeted Trump Taj Mahal as a possible closure candidate.
Trump Taj Mahal ranked sixth of 11 casinos in July gaming revenues, but three of the five casinos trailing it are closing or have closed.
Prior to the Trump Taj Mahal closing rumors, and in the wake of the loss of more than 8,000 casino employee jobs this year, Governor Christie has called for a “gaming summit” in Atlantic City. Casino executives, union leaders, and elected officials are expected to speak at the event.