Deutschland Casino Games

Casino Stocks Drop

Shares of casinos fell after casino companies were forced to shut down following a New Jersey budget impasse. The East Coast landmark for gambling closed its doors to casino players for the first time in its 28-year history.

Trump Entertainment Resorts Inc., which has all three of its casinos in Atlantic City, headed for its worst drop in over a year.

Second in the U.S. gambling market only to Las Vegas, A.C.'s casinos closed in compliance to state laws. The casinos are required by law to have gaming inspectors monitoring their operations. However, in light of the budget impasse, the state has to withdraw 'unnecessary government services' including the casino gaming inspectors.

The closure of the 12 casinos will entail an estimated loss of $16 million in gambling revenue for every day that it is closed for operations during its high time in the year. Trump Entertainment Resorts Inc. may be taking a big bite of this figure, with an estimated $3.5 million to $5 million a day in gaming revenue according to Chief Operating Officer Mark Juliano.

"We are starting to get cancellations," Juliano said. "We are definitely starting to feel the impact."

Atlantic City's gambling revenue was at $5.02 billion last year, a record high for the casino city, and generated $402 million in state taxes. Atlantic City was host to 35 million tourists in 2005.

With the budget impasse still unresolved, Gov. Jon Corzine is deemed without a budget and has no authority to spend money. Corzine claims that his hands are tied and he has no choice but to shut down services including courts, motor-vehicle offices, public parks, beaches and the lottery.

Trump Entertainment shares lost $1.06, or 5.2 percent, to $19.22 in Nasdaq composite trading as of 11:27 a.m. in New York, heading for its biggest drop since May 2005. Boyd Gaming Corp., co-owner of the newly renovated Borgata Hotel Casino and Spa with MGM Mirage, fell 66 cents to $39.23 in New York Stock Exchange composite trading.

Meanwhile Harrah's Entertainment Inc., the world's largest casino company, slipped $1.53 to $68.96. Harrah's Entertainment Inc. operates four casinos in Atlantic City.

It is expected that Trump Entertainment Inc. would be the worst affected by the closure, losing 1 cent daily in per-share earnings as stated in a note to investors by Deutsche Bank July 2. Boyd on the other hand will be losing a per-share profit of 1 cent every four to five days, the bank said.