Carl Icahn to the Rescue of the Taj Mahal, Betfair to Remain in NJ
Carl Icahn, who already has interests in one Atlantic City casino, is looking to possibly infuse money into the troubled Trump Taj Mahal, but only under certain conditions.
Icahn wants to pump some $100 million into the Taj Mahal but only if unions make major concessions. And Icahn pretty much holds all the cards as a secured lender owed $285 million plus interest by Trump Entertainment Resorts Inc.
The famed corporate raider maintains ownership in the Tropicana Casino, which to date does not appear to have been negatively affected by the downturn in Atlantic City's economy.
From the Wall Street Journal:
Union chief Bob McDevitt said the Taj Mahal negotiating committee looks forward to talking to the new owners, but voted a unanimous “no” to cuts asked by current management.
Mr. Icahn isn’t saying, but Boardwalk observers and industry analysts believe there’s a chance Trump Taj Majal is worth saving. Minus the need to pay $38 million in annual debt service, minus the corporate overhead of Trump Entertainment Resorts Inc. and without the drag of ailing Atlantic City sister Trump Plaza, the Taj Mahal could turn a profit.
Trump Entertainment attorney Kristopher Hansen pointed out that there’s also the matter of the secured debt to be resolved, even if the union does an about-face. Carrying costs on the debt are about $38 million annually. That’s money that has been going into Mr. Icahn’s pocket, until recently, when distress on the Boardwalk mounted and Trump Entertainment found itself without more extra stuff to sell.
If an agreement is not reached by Oct. 3, Taj executives will tell New Jersey authorities it is planning to close the casino — a move that will result in the loss of more than 4,000 jobs, a source close to the situation said.
“A decision has to be made in the next two weeks,” the source said. The closure would likely come in early November.
Another Trump-licensed property, the Trump Plaza, shut down earlier this month. As a result, online casino partner Ultimate Gaming exited the state last week.
The Taj Mahal is partnered with Europe’s largest betting exchange, Betfair.com, which has confirmed to BettingNewJersey.com it will continue operations in the Garden State.
- Aaron Goldstein, Gambling911.com
