Tropicana Entertainment, the group that runs the Trump Taj Mahal in Atlantic City, once the largest and most expensive casino in the world, announced the casino would close its doors at the end of the summer.
“Currently the Taj is losing multi-millions a month, and now with this strike we see no path to profitability,” President of Tropicana Entertainment Tony Rodio said in a press conference. “Unfortunately, we’ve reached the point where we have will to have to close the Taj after Labor Day weekend and intend to send WARN notices to before this weekend.”
The Taj Mahal’s over 1,000 employees decided to go on strike starting in July, and continued for 34 days. The closure will result in the loss of 3,000 jobs, according to a local CBS affiliate.
The workers were reportedly striking for better health insurance. Ownership offered to reinstate health insurance, but at a level of coverage less than workers receive at other casinos. Unions turned down the offer.
Republican nominee Donald Trump built and opened the casino in 1990. Since Trump already owned two other casinos in Atlantic City at the time, he had to convince the gaming commission that he had the ability to build the casino at a much cheaper price than anyone else, promising to get low-interest loans from large banks and investors in order to keep costs down.
Trump instead issued junk bonds to fund the building of the casino, with an interest rate of 15.5 percent. The casino needed to earn $1.3 million in net revenue per day, just to keep up with interest payments.
Previously, no casino in the world ever made that much per diem. Trump refused to pay interest charges when they came due, and also demanded local contractors eat a certain portion of the agreed upon price for materials and work used in building the Taj Majal, according to the New York Times.
At the height of its glory, the Trump Taj Mahal employed 8,000 people, but earned $3.4 billion in debt. Surrounding casinos saw an 18 percent increase in revenues from 1997 through 2002, but the Taj Mahal’s revenues actually fell by 1 percent during that time according to the New York Times.
In order to wash away his personal debt, Trump created a publicly traded corporation, Trump Hotels and Casino Resorts. In June of 1995, Trump sold off the Trump Taj Mahal to his publicly traded company, with the company absorbing the loans Trump personally guaranteed.
The Company posted $66 million in losses in 1996, $42 million in 1997, and $40 million in 1998, all years that Trump paid himself a salary of $1 million, with a yearly $5 million bonus, according to the New York Times. The company filed for bankruptcy in 2004.
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