Fall 2016 issue of Horizons
settle on terms with the Atlantic City union, providing a boost to the union’s efforts. A similar trend in data was also noted for Carl Icahn’s two Atlantic City casinos. While Icahn’s group did not own the Trump Taj Mahal (the “Taj”) until February 2016, the Taj and the Tropicana were both owned by Icahn on June 30, 2016. Through the first six months of 2016, the two casinos collectively generated 7.4% less revenue than they generated in the same six month period in 2014. Unlike Caesar’s Entertainment, Icahn’s group did not reach an agreement with the local union. Icahn reached an agreement with the union for the Tropicana’s employees, and the Tropicana has seen a 4.8% lift in revenues since 2014. However, Icahn and the union could not reach an agreement for the Trump Taj Mahal employees. announced the Taj would close. Icahn cited the failure to reach an agreement with the union as blocking a path to profitability. The Taj has reported a 22.2% decline in revenues since 2014. If the closure does occur, Atlantic City will lose another estimated 1,100 jobs, having already lost 8,000 jobs during the casino closures of 2014. To date, the union appears to have ultimately lost their effort, as Icahn
While New Jersey celebrates a return of revenue growth, the ongoing politics surrounding the pending closure of the Taj Mahal are a strong reminder of the underlying weakness that exists in the regional gaming markets. Looking Forward Growth in gaming continues during 2016; however, the second quarter provided reminders to the industry of some of the underlying weaknesses that continue to exist. Looking forward, gaming revenues will continue to increase as the United States labor force continues to add jobs and consumer sentiment continues to improve. Most notably, hotel occupancy and travel continues to increase, providing greater strength to the casino resort destinations. However, as gaming continues to grow, the industry must remain cautious. Regulators, operators and labor unions must continue to focus on stabilizing regulations, financial positions and employee benefits in a manner that promote the continued growth of the overall industry.
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