Atlantic City is grappling with another casino closure as it scrambles to avoid a state takeover.
The Trump Taj Mahal announced plans last week to shut down after Labor Day amid a strike that began July 1.
The closing will mark Atlantic City's fifth casino lost since 2014 and leave the Jersey Shore gambling hub with only seven remaining. Atlantic City faces an early November deadline to deliver an acceptable five-year financial turnaround plan to avoid a state intervention that would empower New Jersey's Local Finance Board to alter debt and municipal contracts.
"It's unfortunate and disappointing that no resolution was found to keep the Taj Mahal open with the hopes of making it profitable again," said Atlantic Beach Mayor Donald Guardian in a statement. "Although these are still tough economic times, Atlantic City has been resilient for over 160 years and we will continue to do so, as we rise to meet any challenge ahead of us."
The Taj Mahal, previously owned by Republican presidential nominee Donald Trump, is now operated by Tropicana Entertainment on behalf of billionaire investor Carl Icahn.
Tony Rodio, Tropicana's president and CEO, said the company has lost over $100 million trying to save the casino since it emerged from its latest bankruptcy in February 2016.
"Currently the Taj is losing multi-millions a month, and now with this strike, we see no path to probability," said Rodio in a statement.
An Aug. 4 report from Moody's Investors Service noted that the Taj Mahal closing is a short-term credit positive event for existing casinos with new business now up for grabs. The Taj Mahal reported $180 million of gambling revenue in 2015, according to Moody's.
A June report from Fitch Ratings said if New Jersey voters approve a referendum in November authorizing expanded gambling into the northern part of the state that it could lead to as many as four Atlantic City casino closings.
State Sen Paul Sarlo, D-Wood Ridge argued last week that the Taj Mahal closing highlights that casino expansion would help Atlantic City since an estimated $200 million in annual revenue from the new facilities would be earmarked for the struggling municipality to diversity beyond gaming.
"The pending closure of the Trump Taj Mahal should serve as a wake-up call for Atlantic City officials to take advantage of the benefits of casino expansion," said Sarlo in a statement. "Expanding New Jersey's gaming sector to North Jersey will provide financial resources so that Atlantic City can invest in economic expansion. The city has the opportunity and the ability to become a destination resort that doesn't rely on casinos alone."
