Trump Plaza in Atlantic City closed its doors on today, and its sister casino is expected to shut its doors in mid-November. The Trump Entertainment Resorts filed for bankruptcy protection on September 9, 2014. It owes millions of dollars in liabilities and has hardly any liquid assets. The Delaware Bankruptcy Judge granted the gaming group a temporary period so that it could work out some kind of plan to salvage the company. The Trump Entertainment Resorts had no choice but to issue a warning to the loyal employees of over 3100 that they may soon be out of work.
The company is in a catch 22 about what to do to save the company. The troubles for the company seemed to appear in January of this year after the Obamacare Act came into effect. The Obamacare law requires them to provide health insurance for its employees. With over some 3100 employees at the Taj Mahal, and also the employees at the Trump Plaza, the company incurred a hefty bill providing health insurance for all of them. In addition to the health insurance coverage provided, the company also had to provide a pension plan. The local 54 of the Unite Here labor union is the big brother that makes sure companies comply with Obamacare. The Trump groups has suggested and asked the union if it would agree to them eliminating health insurance and pension plans in order to salvage the company. The union has refused.
Undecided as to what their next move is, the Trump Groups’ closing will be the fifth casino in Atlantic City to close this year. This has put an economic hardship on the seaside gaming paradise resort, leaving only seven casinos. Little help came from the state legislature due to the Governor, New Jersey Governor Chris Christie. The state legislature passed an economic development bill to prevent the demise of the gaming seaside, but Gov. Christie vetoed the bill. He vetoed the bill on September 11. There was no indication of whether his veto had any association or significance with 911. It is more likely that the governor wanted more tax incentives in the bill for the seaside casinos. So it appears that the governor has put the ball in the legislature court again. More tax incentives in the economic plan, just could help the casinos.
In order for the businesses to be eligible for Christies proposed credits, the businesses must be profitable and meet certain employment benchmarks. Therefore, if Trump Entertainment Resorts can get the labor union to reconsider its decision about aborting health insurance and pensions, they might just be eligible for big bucks from Christie’s economic development bill.
Whether or not the seaside gaming casinos add a “credit positive” to the economic state of the seaside is also in question. State Sen. Ray Lesniak has always been a supporter of New Jersey’s s gaming casinos. He plans to issue his new sporting bill on Monday, September 15th. He is submitting a bill that will help the chances of the seaside casinos, along with US District Court Judge Michael Shipp. There isn’t much support however for this bill. Analyst Vito Galluccio issued a report saying that even this bill doesn’t look that promising for the sports betting seaside. He feels that the fresh stream of revenue from the bill would have a “modest” effort on casino revenue as a whole. Sports Betting only accounts for 2% of casino revenue. Such a report could hinder the passing of State Sen. Ray Lesniak’s bill, who strongly believes that allowing the seaside casinos to offer “sports betting” will significantly increase casino revenues.
One may ask what sparked Governor Christie to become allies with the casinos, especially since he raised a ruckus and objection in August of this year when the casinos wanted to offer sports betting. Politically speaking, the governor may have had a change of heart, simply to show that he is true to New Jersey and trying to improve its economic state. A safer bet however, would be to say that Christie simply realized that he was not enforcing his state’s own anti-betting laws. There was never anything in the 1992 federal PASPA (The Professional and Amateur Sports Protection Act) that prevented casinos offering sports betting.