Trump casinos down on luck, miss interest payment
Posted
Dec 01 2008, 04:46 PM
by
Kim Peterson
Rating:
It's a bad time to give your lenders a "can we talk?" call, but that's what Trump Entertainment is doing after skipping a $53 million interest payment it was supposed to make Monday.
The casino operator doesn't have enough money, and wants to speak to lenders about reworking its loans. But after Trump casinos have gone into bankruptcy twice, is any lender willing to give it another chance? Investors are guessing no, and Trump shares dived 19% Monday to 25 cents each. It's a hairy situation for Donald Trump, the non-executive chairman of the company and its largest shareholder.
Customers are spending less at casinos than before, the company said. A ban on smoking is also hurting business. And finally, Atlantic City is seeing competition from casinos in Pennsylvania, according to MarketWatch.
"The gaming industry and all sectors of our economy dependent on
consumer spending have been hit hard in recent months by the economic
challenges occurring across the country," said chief executive Mark Juliano last month. Trump is offloading one of its three casinos, although the deal isn't final yet.
The Atlantic City gambling industry is in a second straight year of declining revenues. Desperate to keep the money flowing, they're trying all kinds of gimmicks to bring out customers. At the Tropicana, Santas are running around chasing Hooters girls. Other casinos are having big-money blackjack challenges.
Perhaps the casinos should charge people who want to hear Donald Trump begging lenders for money. That would be the biggest spectacle of all.
Image credit: Jamie Adams, Creative Commons license
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