The Real Deal New York

Trump Entertainment could sell its Atlantic City casinos

April 08, 2008 03:47PM
By David Jones

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Trump Entertainment Resorts, whose shares have slumped since it failed to find a buyer in 2007, said it remains open to a possible sale of its Atlantic City casinos.

The company has clarified statements made earlier this month by company chairman Donald Trump, who told AP that he was no longer interested in selling the three casinos.

“There’s no current transaction that we’re talking about, we’re pursuing our operating strategies,” John Burke, Trump Entertainment’s interim chief financial officer, told The Real Deal. “If a transaction made sense to our shareholders and made sense to our directors, then certainly we would entertain it.”

Burke’s comments echoed a statement released by the company on April 4.

Last July, Trump ended negotiations to sell Trump Entertainment to former Trump Taj Mahal President Dennis Gomes and Morris Bailey, the co-principal at Manhattan-based JEMB Realty. Gomes was not immediately available for comment.

After failing to buy the Trump Taj Mahal, Gomes in March made a joint bid with Baltimore-based Cordish Cos. to buy the rival Tropicana Casino & Resort, which was put into receivership by New Jersey gaming authorities. New York developer Joseph Palladino has made a $950 million bid for the property.

Trump Entertainment shares have fallen sharply since the deal fell apart, and the company has been under pressure to pursue a new deal.

McSam Hotel Group Chairman Sam Chang has steadily increased his stake in Trump Entertainment to about 7.5 percent, according to regulatory filings.   
Trump plans to open the first 400 rooms of its new $255 million tower at Trump Taj Mahal Casino Resort by September 2008. When completed, the 39-story tower will have 786 rooms.  

The resort is one of Trump’s three Atlantic City properties, including Trump Marina Hotel Casino and Trump Plaza Hotel and Casino.

Atlantic City has struggled to generate gaming revenue amid a partial ban on smoking inside New Jersey casinos, and fierce competition from slot machines and video poker in Pennsylvania and New York state. Gaming revenue fell 5.7 percent in 2007, the first annual gaming revenue decrease in 30 years.

Meanwhile, several hotels, including the rival Borgata Hotel Casino & Spa, have spent millions to expand the number of available rooms, restaurants and entertainment venues, in order to create a year-round destination that can compete against Las Vegas.

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