Trump Entertainment Resorts in Atlantic City Experience Losses in their Slots Operations

On April 8, 2007, Trump Entertainment Resorts, the casino company owned by Donald Trump, which made it through Chapter 11 bankruptcy protection just 2 years ago, finds itself in another problem. The Trump Entertainment Resorts located in Atlantic City, New Jersey are trying very hard to perform better profit wise, despite the competition from the new slots parlors in nearby areas like the state of Pennsylvania.

Trump Entertainment Resorts recently lost out in their bid to expand outside of Atlantic City. The company has also had to contend with rumors that their CEO is resigning from the company. Aside from that, Trump Entertainment Resorts still has debt even with the bankruptcy reorganization back in 2005.

The company is vulnerable to the changing economic climate because they have no cushion against the problems that the slots casino can encounter. The union drive and the casino smoking ban are additional problems that the casino is facing right now. Trump Resorts, which has 3 casino facilities in Atlantic City, has hired Merrill Lynch to help the Trump Resort to evaluate their own options regarding the matter.

Some of the issues that can dampen the sales expectation by the company are bond covenant and others. The company's performance after emerging from Chapter 11 bankruptcy protection was affected after the Trump Resorts lost their slots license bid for Philadelphia in December and a lot of gambling competition has opened in Atlantic City.

Joel Simkins, a Prudential Securities analyst, stated that Trump Resorts have reached a point where they do not have a choice but to proceed on their current path.

Monday, 30 April 2007
Darren G. Strachan