What's better for Atlantic City? Privately held or Publicly traded casinos, that is the question?

Trump Taj Mahal Casino

The Private Trend of Casino Ownership in Atlantic City: Good? Bad? Who cares?

With the recent news that the Trump Casino empire in Atlantic City is up for bid, it comes as no shock that a private entity is at the top of the list of potential suitors. Should any private company, be it that of ex-Trop boss Dennis Gomes, or anyone else, gain control of Trump Taj Mahal, Trump Marina, and Trump Plaza, that will leave The Borgata as the sole public casino in town. That statement will only remain true if legendary billionaire Kirk Kerkorian does not get his way and buy himself MGM, as has also been recently talked about. See the list below, grouped appropriately:

• Hilton Atlantic City and Resorts Casinos: Colony Capital, LLC
• Tropicana Atlantic City Casino home of the Quarter: Columbia Entertainment (subsidiary, Columbia Sussex)
• Trump Plaza, Trump Taj Mahal, Trump Marina: Let’s assume for the moment that it does get bought and go private, as most gaming sector analysts have been saying for a good part of this year. Trump Entertainment Casinos
• Harrah’s Atlantic City, Caesars, Bally’s, and Showboat: The deal that makes these houses private (Texas Pacific Group in a joint venture with Apollo Management) is just awaiting regulatory approval, which is to say that it’s one step shy of completion.
• Borgata Casino Hotel & Spa: Still publicly owned, in its original configuration of 50/50 between Boyd Gaming and MGM MIRAGE.
• Future Atlantic City Casino projects: The proposed Revel Entertainment project north of Showboat is a private venture, as is the Barr-Bashaw boutique project. What admittedly little stock market knowledge that I do have leads me also to believe that no board of directors of a public company would condone the spending of the expected $1 billion price tag that is currently affixed to the Bader Field land. Whether or not Mayor Levy gets that price is another discussion altogether, but that’s the number floating around.

I’m not into economics, nor do I pretend to be. The most I’ve ever touched economics was my reading of Freakonomics. What I do know about casinos is that the consistent and comfortable profits that they create thanks to the house always winning in the long run will now go to a much smaller group of people, instead of the proverbial Joe Shareholder. As the title suggests, I’m not taking one side or another in the discussion, since I’m a few zillion frequent-flier miles short of CEO territory. I’ve also been told that I’m a couple of sandwiches short of a picnic, but that’s another matter. I am, however, naturally curious. And I’m lucky to have a place (here) that is capable of starting discussion. And ever since Borgata opened in 2003 and created a new era in Atlantic City’s history, the bar has been set higher and higher by some of the construction projects going on in Atlantic City. It really makes one wonder if the huge sums being laid out for development are an indication that the people laying out those sums see this town as being that much of an economic shooting star. After all, no one deliberately makes an investment that doesn’t have an expectation of return. Even large charitable and philanthropic donors have an expectation that their gift will get put to good use for the given cause, thereby creating the feeling of a return on investment, even if that return is not a financial one.

And so we come back to the title: is this private trend good? If so, why? Is it a bad thing, and if so, why? Or, does anyone other than brokerage analysts, TV pundits, and people whose last name happens to be Gomes or Trump really care?

Mike Holovacs, the AC Mole, is a concierge at one of the larger casino properties in town. Feel free to leave comments or questions.