Even though there have been several major casino bankruptcies this past year, including such high-profile examples as Station Casinos and Trump Entertainment, most operations continued with business as normal on the gaming floor. But the Resorts Casino Hotel, the first casino to open in Atlantic City when New Jersey legalized casinos, not only may go bankrupt, but actually close down.Other casino operations still return earbnings, and only need to rid themselves of onerous debt to recover their viability. This means that Trump and Stations casino gambling continues apace, even while lenders and owners negotiate settlement against credit covenants.
But Resorts is in worse condition than others. The casino has not made a mortgage payment in almost a year. The casino's operators have filed a request with regulators to give the company's lenders control and ownership of the historic gaming venue.
"Resorts has experienced the same downdraft in their cash flows as all other Atlantic City operators," analyst Andrew Zarnett told the Philadelphia Inquirer. "However, by being one of the smaller operators in the market, instead of reduced profit, they've experienced absolute losses ."
Regulators are expected to decide this week whether to allow the transfer of ownership, something that has never happened in Atlantic City. The Cosmopolitan Casino in Las Vegas was taken over by Deutsche Bank, but the resort was still in the process of construction and still has not opened.
If the gaming board denies the transfer, owners may not be able to keep the doors open at Resorts much longer, causing the closure of a landmark in the Atlantic City gaming business.
Published on September 12, 2009 by MattMiller
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