Trump To Move Into Gulf Coast Casino Market

Trump has officially singed a letter of intent to form a joint venture partnership to develop, build and operate a destination casino resort in Diamondhead, Mississippi. The new casino venture will cover a minimum of 40 acres within the existing 404-acre tract owned by Mississippi Gaming Corporation, a wholly-owned subsidiary of Diamondhead.

"We believe a partnership with Trump Entertainment Resorts for this venture adds up to an ideal combination because of their experience, the value of the Trump brand, the location of our site on Interstate 10 and the vitality of the Gulf Coast market," said Deborah A. Vitale, the Chairman, Chief Executive Officer and President of Diamondhead. "We have the land, the location and the desire to pursue a master plan for the entire tract that should not only enhance long term shareholder value, but which should significantly enhance the surrounding economy."

This could be seen as a wise move for Trump as he is one of the first developers taking advantage of a new Mississippi law permitting casinos for the first time to be built on land. Until last October, the actual casino must had to be physically located on a body of water adjacent to the river. This created a situation where casinos were placed on barges and left prey to the ravages of hurricane Katrina, which destroyed many of Mississippi’s casinos in the Gulf Coast region.

Taking advantage of this new law will allow Trump and Diamondhead to build a property up to 800 feet away from the river. The company will thereby be able to create a structure resilient to a strong weather event. Additionally, without the limitation of placing a casino on a barge, the facility can be more akin to its brethren in Atlantic City, rather than a disguised riverboat.

"As we renovate and re-brand our Atlantic City properties, we are also focused on our corporate development initiatives and expanding the Trump brand into new markets," said James B. Perry, President and Chief Executive Officer of Trump Entertainment Resorts, Inc. "We are excited about the prospect of bringing the Trump brand to the Gulf Coast, and we hope to join private and public entities in redeveloping the region. We believe that this is a great opportunity to create value for our company, our shareholders and the citizens of Mississippi."

In 2004, the Biloxi/Gulfport gaming market was the 7th largest in the United States, with gross revenue totaling about $911 million. However, the 2005 hurricane slashed that to about $600 million. Tax revenue from that area contributes to 5 percent of the state income.
Though Trump likes to talk the talk, his trio of Atlantic City casinos haven’t been the cash cows you’d expect in market pulling in $5 billion from a dozen properties. The company has been recently reorganized and is still losing money but is on its way to fiscal health. The company lost $9.7 million or $0.32per share for the first quarter 2006 compared to a loss of $46.9 million loss or $1.57 per share for the quarter of 2005.

Trump is now in the midst of a $110 million capital plan including projects at all three Atlantic City casino to improve restaurant and retail venues, the casino floors, meeting and convention space and re-themed entertainment areas, as well as completing a rooms renovation.

© Copyright 2006 Online Casino Crawler This material may not be published, broadcast, rewritten, or redistributed.