Inside Gaming: Caesars' Bankruptcy Plan Approved, Trump Taj Mahal Price Tag Revealed
This week's installment of Inside Gaming shares the latest regarding Caesars' efforts to get its largest operating division out of bankruptcy, passes along the price tag (much lower than reported) for the recent Trump Taj Mahal sale, shares increased revenue numbers from Maryland's casinos and tells of the Sands Bethlehem's decision to halt expansion plans amid sale talks.
Caesars' Bankruptcy Reorganization Plan Receives NJ Regulators' Approval
The efforts of Caesars Entertainment Operating Company to emerge from bankruptcy continue. As part of those efforts, this week the CEOC received approval from New Jersey regulators to lease operation of two its Atlantic City casinos to a newly formed subsidiary company, reports The Press of Atlantic City.
The reorganization plan is designed to help the CEOC — the largest operating division of Caesars Entertainment Corporation — emerge from Chapter 11 bankruptcy for which it filed in early 2015.
On Wednesday, the New Jersey Casino Control Commission approved Caesars' plan to split the company into a real estate trust and an operating company, with the real estate trust now free to lease operations of both Bally's Atlantic City and Caesars Atlantic City to a new, separate company.
"It is my hope that when the reorganization process is complete, Caesars and Bally's will be able to focus on growing their business just like other operators in New Jersey," said Matthew B. Levinson, chairman and CEO of the Casino Control Commission.
Before it can be implemented, the New Jersey Division of Gaming Enforcement will also need to sign off on the reorganization plan.
The approval represents another small step along a lengthy road to recovery for Caesars. It comes after a U.S. Bankruptcy Court in Chicago approved a bankruptcy reorganization plan for CEOC back in January of this year, thereby paving the way for Caesars to rid itself of $10 million worth of debt.
Trump Taj Mahal Purchase Price Just $50 Million
Staying in Atlantic City, documents made public on Tuesday shed some light on the details surrounding the sale of the now-shuttered Trump Taj Mahal to Hard Rock International in March.
According to NJ.com, the property was purchased from Carl Icahn for $50 million, the total revealed in Icahn's filings with the Securities and Exchange Commission.
Initial reports at the time of the sale alleged a much larger purchase price of $300 million.
That purchase price represents a little more than four cents on the dollar when compared to the $1.2 billion cost to build the casino then described as the "eighth wonder of the world" by Donald Trump upon its opening in 1990.
By the late 2000s the current U.S. President's casino company "was going through its fifth bankruptcy filing," explains NJ.com.
Trump relinquished his last 10 percent ownership stake in the Taj Mahal in February 2016 when Icahn helped Trump Entertainment Resorts out of bankruptcy by making the company a subsidiary of his Icahn Enterprises. The casino closed for good in October 2016.
Maryland Casinos Continue to Thrive With Big April
In happier casino news from the east coast, last week Maryland Lottery and Gaming announced another revenue increase in April for the state's six casinos.
As reported by the Baltimore Business Journal, revenue totaled $135.7 million for the month, up 30.6 percent over the almost $103.9 million from April 2016.
The new MGM National Harbor — just opened in December 2016 — has claimed a large share of the state's market already, bringing in just under $50 million from its table games and slot machines.
Maryland Live! Casino was the next biggest earner with $45.3 million for the month, down 21.6 percent from the $57.8 million Maryland Live! took in a year ago.
Horseshoe Casino Baltimore and Hollywood Casino Perryville were both also down year-over-year, while the Casino at Ocean Downs and the Rocky Gap Casino Resort were up.
The $135.7 million revenue total represents the second-highest month ever for the state's casinos, exceeded only by the $141.2 million total in March.
Sands Bethlehem Expansion on Hold Amid Sale Talks
Finally, in March we shared the news here that MGM Resorts International had reached an agreement in principle to purchase the Sands Casino Resort Bethlehem in Pennsylvania from Las Vegas Sands for a reported $1.3 billion.
As talks continue regarding that transaction, this week came news that the Sands Bethlehem would not be pursuing an already initiated $90 million expansion to the property, reports Lehigh Valley's Business Cycle.
Bethlehem Mayor Robert Donchez confirmed the expansion plan had been set aside after initial construction to add restaurants and increase the gaming space had been halted in January.
"It is my understanding that the expansion is on hold," said Donchez, who added that he hopes the plans will go forward once the sale of the property to MGM has been completed.
The plan includes a 100,000 square-foot addition on the casino's north side, enabling the addition of two restaurants, 81 additional gaming tables and 380 slot machines.
While neither side has commented specifically on the deal's progress, reports are it could take up to six months to be finalized.
According to the Business Cycle, the news that the expansion had been set aside for now was "disappointing to poker players who for years have complained about their spot being in the middle of the casino floor."
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