Trump Taj Mahal Deals with Money Concerns, While Trump Plaza Sets to Close
Both of the Atlantic City casinos bearing Donald Trump’s name are in turmoil, though both continue to seek to stay in business one way or the other. Trump Plaza is set to close its doors on September 16, but the operators would like to keep the online gaming portal active after the close date. Meanwile, Trump Taj Mahal is having money problems of its own.
The brick-and-mortar operations of Trump Plaza will come to an end on Monday, September 16. That is not in doubt, but Trump Entertainment Resorts is considering a petition the New Jersey Division of Gaming Enforcement to allow them to continue operating the online gambling business after September 16th. At present, Trump Plaza Online is partnering with Betfair on an online casino and poker room. If the online portal closes, then a major Internet gaming company will leave the New Jersey gaming market.
Exploring the Feasibility of Online Gaming
According to the Associated Press, the petition says Trump Entertainment Resorts is “exploring the economic, legal and practical feasibility of continuing its relationship with its Internet gaming provider following the cessation of gaming operations.” The gaming company is thus sending word that it might ask for its gaming license to be extended, perhaps feeling out the DGE to see how it responds.
New Jersey passed online gaming laws was to regulate and tax the resulting casinos. The state wanted to provide an legal and stable gaming environment, which would lure business investment from the top companies. Each new operator had to partner with a land-based gaming operation in Atlantic City. As the November 2013 launch of online gaming in New Jersey got nearer, many of the major online casinos and poker rooms partnered with one or another Boardwalk casino.
Potential Losses for Software Providers
To launch an online gambling website with cutting-edge software, a company needs to invest seven-figures in the operation. That means Betfair invested big money in the launch of Trump Plaza’s online operation. If a top gaming company is driven out of the market less than one year after such an investment, it might make it harder to convince similar gaming operators to invest in the future.
Throughout the first seven months of the year, Trump Plaza and Betfair have collected $4.3 million in winnings from customers. That is a rough tie with Trump Taj Mahal and its partner, Ultimate Gaming, for last place in the New Jersey market. Part of the problem both gaming operations have had is almost no growth for its online poker room. In a couple of months, Trump Plaza online reported $1 in revenues.
Borgata Online and Caesars Entertainment
By comparison, the market’s top operator, Borgata Online, has collected over $27 million in revenue from January to July, the last month with its numbers released. Caesars Interactive has collected $21 million in winnings.
The online gaming avenue might not be the only way Trump Entertainment might continue to make money. The company is also considering the option of keeping their land-based site open for third-party vendors to keep operating on complex grounds, even after the casino and hotel have closed.
In other cases, long-defunct casinos have opened occasionally to maintain their gaming license. For instance, one Downtown Las Vegas casino (Castaways/Showboat) continued to open for 8 hours every 2 years, even after it had been boarded up, because the owners wanted to keep their gaming license operative.
Revel Casino’s HQ Club
This is similar to the Revel Casino, which wanted to keep its outdoor day-club, HQ, in operation after the main complex closed. Revel Casino pointed out that the HQ club has separate access than the regular casino, so the operation could be closely monitored.
Whether the club would be able to legally operate while the rest of Revel Casino is in bankruptcy court is a matter of conjecture. Revel Casino continues to go through Chapter 11 bankruptcy, and will seek a new buyer when the process is complete.
Trump Taj Mahal Money Troubles
Meanwhile, Trump Taj Mahal is having its own money woes and is seeking a refinancing plan with new financiers to buy time to turn operations around. Negotiations continue to extend the foreclosure deadline. The original deadline was August 18, but both sides decided to negotiate new terms to avoid the foreclosure route. No one wants to see a 5th casino go out of business, while financiers prefers to make profits off of a loan than go into the property management business–especially property management as complicated as casino operations.