Trump Taj Mahal Casino: Competition, Decline & Failure Analysis
This paper examines the Trump Taj Mahal Casino in Atlantic City following its acquisition by STHM Management. It provides a market analysis of local, regional, and national competition—including the dominance of Borgata in Atlantic City and the broader competitive threat posed by Las Vegas. The paper then reviews the casino's deteriorating financial performance, noting revenue declines from $216 million in 2014 to $180 million in 2015. Finally, it identifies the root causes of the casino's failure: unsustainable debt accumulated at opening, poor reinvestment in facilities, loss of competitive advantage after Borgata's 2003 launch, and the collapse of the online gaming partnership. Strategic recommendations are offered for the new ownership to avoid repeating these mistakes.
- Introduction: Frames STHM acquisition and paper's three goals
- Market Analysis of Local, Regional, and National Competition: Atlantic City, regional, and Las Vegas competitive landscape
- Past Performance: Revenue decline from 2014 to 2015
- Issues That Caused Past Failure: Debt, mismanagement, facility decay, and lost advantage
- Recommendations for New Ownership: Debt management, differentiation, and facility renewal
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What makes this paper effective
- Clearly organized into three analytical pillars—competitive environment, past performance, and causes of failure—giving the argument a logical, consultancy-style structure.
- Uses specific revenue figures (e.g., $229 million total Atlantic City winnings, $216 million declining to $180 million) to ground claims in concrete evidence rather than vague assertions.
- Connects strategic theory (competitive advantage, differentiation) to real business outcomes, showing how the loss of a unique value proposition drove the casino's decline.
Key academic technique demonstrated
The paper demonstrates applied business analysis by synthesizing industry data, company financial history, and management decision-making into a coherent causal narrative. Rather than simply describing what happened, the author uses the concept of competitive advantage to explain why the casino failed and to derive forward-looking recommendations—a hallmark of applied strategic management writing.
Structure breakdown
The paper opens with a brief framing introduction, then moves through three substantive sections: a market analysis covering local (Atlantic City), regional (Philadelphia, Baltimore), and national (Las Vegas) competition; a short financial performance review; and a detailed causal analysis of the casino's failure covering debt structure, management conduct, facility decay, competitive entry, and online gaming collapse. It closes with brief strategic recommendations for the new owners.
Introduction
The Trump Taj Mahal Casino has been acquired by STHM Management. However, for STHM to succeed where former owners failed, it must understand the competitive environment, review the casino's past performance, and identify the reasons for its collapse in order to avoid repeating the same mistakes. This paper addresses each of those three issues in turn.
Market Analysis of Local, Regional, and National Competition
The Trump Taj Mahal Casino is located in Atlantic City, where there are currently eight casinos, including the Taj Mahal (Atlantic City, 2016). The size of the industry is substantial; in August 2016 total winnings across Atlantic City reached $229,787,082, with the largest competitor being Borgata, where winnings totaled $65,566,500 (Playnj, 2016). Despite this level of activity, the local industry has been struggling: four casinos closed in 2014, and in 2015 total revenues were down 48% compared to 2006, which was the sector's peak year (Johnson, 2015).
Nationally, there were 510 casinos operating across the United States in 2014. Regional competition includes several casinos in Philadelphia, Baltimore, and Washington, D.C., though these do not offer the same differentiated resort experience as Atlantic City (Anonymous, 2016). The most significant competitive threat comes from Las Vegas, which offers a more established leisure destination with 25 casinos on and off the Strip, a highly developed hospitality infrastructure, and superior national and international transportation links. These factors give Las Vegas a clear competitive advantage over Atlantic City in terms of both reputation and the breadth of hospitality services available (Barsky & Maier, 2015).
Past Performance
The Trump Taj Mahal Casino was once the highest-performing casino in Atlantic City, but began losing business when the Borgata opened in 2003 (Playnj, 2016). The financial decline has been consistent: revenues stood at $216 million in 2014 and fell further to $180 million in 2015 (Playnj, 2016).
References
Anonymous. (2016). Casinos by state. Retrieved from http://www.americancasinoguide.com/casinos-by-state.html
Atlantic City. (2016). Choose from our casino resorts in Atlantic City. Retrieved from http://www.atlanticcitynj.com/explore/casinos/
Barsky, J., & Maier, T. (2015). Win or lose, it's the casino experience that gambling hotel guests value the most. International Journal of Business, Marketing, & Decision Science, 8(1), 100–108.
Buettner, R., & Bagli, C. V. (2016, June 11). How Donald Trump bankrupted his Atlantic City casinos, but still earned millions. The New York Times. Retrieved from http://www.nytimes.com/2016/06/12/nyregion/donald-trump-atlantic-city.html
Johnson, B. (2015). Which Atlantic City casinos have closed and which are still open? Retrieved from http://www.nj.com/politics/index.ssf/2015/06/which_atlantic_city_casinos_have_closed_and_which_are_still_open.html
Nuzzi, O. (2014, December 8). I watched a casino kill itself: The awful last nights of Atlantic City's Taj Mahal. The Daily Beast. Retrieved from http://www.thedailybeast.com/articles/2014/12/08/i-watched-a-casino-kill-itself-the-awful-last-nights-of-atlantic-city-s-taj-mahal.html
Playnj. (2016). Atlantic City gambling revenue, August 2016. Retrieved from https://www.playnj.com/atlantic-city/revenue/
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