Just when gaming analysts were predicting that Atlantic City’s casino woes were witnessing a turn around, billionaire Carl Icahn has announced that he plans to shutdown the iconic Trump Taj Mahal casino after Labor Day. This closure would leave Atlantic City with just seven casinos as the Trump Plaza, Revel, Atlantic Club and the Showboat casino all gone out of business during the last couple of years.
The Trump Taj Mahal Casino which was initially opened by Donald Trump was also heading into bankruptcy before Carl Icahn put in $86 million in February. One of his biggest challenges came from the Local 54 chapter of the Unite-Here union who were demanding better benefits and healthcare plans. Icahn wasn’t willing to restore slashed benefits, including health care and retirement, stating that the Taj Mahal was still leaking money and that the workers needed to adjust in order to keep the casino open.
Local 54 has been on strike from July 1 with over 1,000 union members launching protests in front of the casino as well as Icahn’s office. Tropicana Entertainment, another casino that Icahn owns was responsible for running operations at the Trump Taj Mahal.
In a statement, Tony Rodio, CEO for Tropicana Entertainment said “Icahn Enterprises saved the Tropicana and to date has lost almost $100m trying to save the Taj when no other party including the prior equity owners who put it into its recent bankruptcy were willing to invest even one dollar to save it. Currently the Taj is losing multi-millions a month, and now with this strike, we see no path to profitability. Unfortunately, we’ve reached the point where we will have to close the Taj after Labor Day weekend.”
On August 1, a public affairs company which releases union information to the press stated in an email, “As the sole debtholder between 2010 and 2014, Icahn extracted $350 million from the property, driving it into bankruptcy and then swooping in to take control. He used the bankruptcy proceeding to strip Taj Mahal workers of health benefits and retirement security. Overall, he cut worker compensation in wages and benefits by 35%,” the company stated in an announcement that top political leaders were in support of extending unemployment benefits to striking workers.
Trump Taj Mahal casino employees will now be without a job after Labor day and may struggle to find employment in the remaining seven Atlantic City’s casinos. Local 54 president Bob McDevitt called Icahn one dimensional and petty for deciding to shutdown the Trump Taj Mahal. He also stated that if Donald Trump does decide to choose Icahn as the U.S treasury secretary, the country was doomed.
Gaming analysts believe that the closure could have minimal impact on Atlantic City’s casino industry as they expect hotel reservations and gambling revenue from the Trump Taj Mahal casino to be spread across the remaining seven Atlantic City casinos. Union workers have promised to continue their strike outside the casino as quitting now would not benefit anyone.