Donald J. Trump blames troubles at his three casinos on a faltering economy and believes his latest financial deal will give them time to rebound. State officials disagree.
The Division of Gaming Enforcement says mismanagement and the opening in April of Trump’s Taj Mahal Casino Resort are to blame. A division report for the state Casino Control Commission holds out little hope of a long-term turnaround.
Trump has pledged his three casinos as security for a $65-million emergency loan--part of a restructuring of the casinos’ $1-billion debt.
Banks agreed in June to lend him the money so he could make an overdue $43-million bond payment on Trump Castle Casino Resort By The Bay. A Trump attorney says the loan is in escrow awaiting the Casino Control Commission’s decision, expected Tuesday.
The gaming division reluctantly recommended approval of the plan, but attached 13 conditions. And it said the deal, which is part of Trump’s scramble to handle $3.2 billion in debt that he has amassed on his overall empire, is no guarantee of success.
“These agreements, even if approved and strictly adhered to by the parties, do not and will not bring to a conclusion the financial difficulties facing the Trump Organization,” the report said.
Second-quarter casino reports released by the casino association indicate that the Taj Mahal lost $14 million in its first three months ended June 30. Trump Castle lost $8 million last quarter and Trump Plaza Hotel and Casino recorded an $863,000 profit, it said .
The division says the Taj Mahal helped accelerate Trump Castle’s decline and weakened the previously solid Trump Plaza. The Taj Mahal has hovered around its break-even point of $1.3 million a day this summer, leaving Trump’s remaining casinos and the city’s other gaming halls to split the remaining business.
Trump conceded that perhaps the Taj Mahal had “cannibalized” business from other casinos. But he repeated his contention that none of his gaming halls is for sale, saying that the Taj Mahal just had the misfortune to open in a stagnant gaming market and a recession striking the Northeast hard.
“Had the Taj Mahal opened in a good economy, the other casinos would not have been hurt,” Trump said. “Atlantic City business is down. When you have something opening in a bad economy . . . you’re looking at a whole different ball game.”
Ed Tracy, president of Trump’s casinos, said he expects business to turn around within six months.
The gaming division is unwilling to wait. If the commission approves the new Trump deal, it wants his chief financial officer to return within three weeks with details of how Trump will make a $47-million bond payment due Nov. 15.
“The Taj Mahal will be faced with a crisis similar to that recently experienced by Trump Castle unless the Trump Organization directly and expeditiously addresses this matter with the bondholders,” the report said.