Atlantic City Casinos Are In Trouble

Gas prices are through the roof in the United States. It's a known fact. And it's threatening to kill the casino and the gaming industry. We’ve been reporting slowing gaming trends and issues for casinos over the last few months and this trend continues in August. The recent quarter reports that came out in early August have some grim news for many casinos in Las Vegas and Atlantic City. One man in particular that we all know, Donald Trump, is especially in danger considering that his many casinos in Atlantic City are on the verge of crumbling. The reason for the turmoil? - It's very simple. Consumers simply don't want to travel and even if they do, they don't want to throw their hard earned money away on gambling. It's something that they could save for gas or food.

This trend has caused big-time casino operators like Trump to experience huge losses in his gambling business. Donald Trump's chief executive officer, Mark Juliano issued a statement in response to this quarter's heavy losses, "The weakened economy, driven by tight credit markets, declines in consumer confidence and rising oil prices, has had a significant impact on the gaming industry across America." The second quarter losses totalled to a whopping $29.4 million dollar or $.94 per share, quite a significant number for many gaming investors. This loss is compared of a loss of $13.4 million the previous year.

This loss was further perpetuated due to the devaluing of the Trump Marina Casino which was recently sold. The value was negotiated down $18.6 million. The company is still contemplating what is will do with the proceeds from the sale. It has two options, either the pay of its company debts or to invest it in the further development of their Atlantic City assets. With such a loss in casino interest big-time casino owners like Trump may have to find other places to make money. Trump was in the news recently for building a large golf-resort in the middle of nowhere in Northern Europe. For those that aren’t so aware of Trump, his foresight in Real Estate investments is a legend in the US, though he is famous for his media antics just as much as his business success. It will be interesting to see whether his investments in Las Vegas and elsewhere are able to salvage Trump’s Atlantic City future.