Trump Plaza Casino About to Close
Atlantic City is facing an ongoing crisis with the imminent closure of several ranking casinos. The latest such victim is the Trump Plaza Casino. Atlantic City has been unable to sustain itself, following a rapid decline in gambling revenues since 2006. The latest victim in the unfolding drama has already sent out notices to employees about the imminent closure. Some 1000+ employees received notices of termination of their jobs on Monday, 7 July 2014.
While no final decision has been reached yet, Trump Entertainment Resorts expects that the Trump Plaza Casino will close on 16 September. The closure of this hotel and casino would be a major development in Atlantic City. An estimated 25% of the Casino workforce and 33% of the casinos operating in the city will have been lost within a period of 9 months. Following the closure of the Atlantic Club in January 2014, the Showboat in August 2014 and the possible closure of the Revel Hotel and Casino as a result of the bankruptcy filing, things are looking bleak for this East Coast entertainment district.
Buyers are being sought for the Trump Plaza, but as yet no deal had been reached. It is unclear what will become of the building after the closure, but many jobs will be lost. Atlantic City has been struggling ever since surrounding states began opening up their own casinos, thereby saturating the market with an oversupply. The prestigious Trump Plaza cost $210 million to construct when it was opened in May 1984. It began as a pet project of New York real estate tycoon Donald Trump, but he has since cut his interests in Atlantic City to a meagre 10% of Trump Entertainment Resorts. He is divorced from its daily operations.
Atlantic City has been surpassed by Pennsylvania as the #2 gambling and entertainment destination in the US. Heading the top spot is Las Vegas, Nevada. There is a general consensus among industry pundits that the casino market needs to reduce its supply of casinos to keep the industry afloat. With a limited number of gambling patrons, an oversupply of casinos does not bode well. It is precisely this thinking that led to Caesars Entertainment deciding to close the Showboat in August 2014. The Chief Executive Officer of Caesars Entertainment – Gary Loveman – confirmed that the company would maintain control over its 3 other casinos in Atlantic City.
Steep Revenue Declines
Trump Plaza generated $73 million during 2013 – the lowest of all 12 casinos operating in Atlantic City. This year it is generated $21 million – 27% lower year-on-year. It is expected that by September 2014 the number of casinos in Atlantic City will drop from 12 to 8. When the Atlantic Club closed, 1,600 workers lost their jobs, and by August and additional 2,100 workers at the Showboat will lose theirs. Revel Hotel & Casino stands to lose over 3,000 workers if no buyer is found.