The Rise and Fall of the Trump Owned Casinos

Trump and Trump Plaza
Over the last 40 years, Donald Trump has been everything from an icon to a demagogue. There’s little doubt that he built a massive empire in the 1980s. He also became a media darling, first in the tri-state area of New York, New Jersey, and Connecticut, then nationally, and then internationally.

He’s amassed an empire of over 500 companies under the umbrella of The Trump Organization and the main focus of the company was real estate, more specifically hotels, and where possible, casinos.

The first major step in his journey for stardom, or infamy as some might think, was the purchase of the then 60-year-old Commodore Hotel.

Trump sealed the deal with a $400 million tax abatement from New York City and spent $100 million gutting the hotel to the steel frame in some areas.

To meet all the demands of the purchase, Trump entered into a partnership with the Hyatt hotel group.

The hotel reopened on September 25th, 1980 as the Grand Hyatt New York. The partnership became acrimonious in the mid-1990s and led to several lawsuits on both sides. Hyatt bought out the Trump Organization’s portion of the property in October 1996.

In February 2019, Hyatt announced that the now century-old building was to be demolished in favor of a smaller hotel and office space pending approval from the city.

Following his purchase of the Commodore, Trump would build other properties in New York including Trump Tower and Trump Plaza (New York).

Trump then set his sights on the flailing Atlantic City real estate market. Trump pursued and received gambling licenses to operate in Atlantic City and soon opened his first of 3 casino resorts.

Through the end of the 1980s, Trump’s organization would expand beyond real estate to include an airline called the Trump Shuttle, Trump: the Game (a board game), a series of books penned by Trump, a television game show called Trump Card filmed at Trump Castle, and a bike race in the Mid-Atlantic States called the Tour de Trump.

But as the 1990s hit, Trump experienced some financial troubles and had to cure them via bankruptcy and negotiations.

The Trump Plaza Hotel and Casino

On this one, I suppose I need to be a bit more specific. Trump was a fan of the name Trump Plaza to the point where he named at least 5 of his properties Trump Plaza. They were:

  • Trump Plaza (New York, New York)
  • Trump Plaza (New Rochelle, New York)
  • Trump Plaza (Jersey City, New Jersey)
  • Trump Plaza (West Palm Beach, Florida)
  • Trump Plaza Hotel and Casino (Atlantic City, New Jersey)

But I’m discussing casinos today, so the Trump Plaza that I’m referring to is the Trump Plaza Hotel and Casino in Atlantic City.

In 1982, the Trump Organization began construction of its first hotel and casino in Atlantic City. The casino, jointly owned by Trump and Harrah’s opened as Harrah’s at Trump Plaza on May 14, 1984.

During the lifetime of the casino, it featured 91,200 square feet of space on the gambling floor. It had 100 table games and over 1,600 slot and electronic gaming machines.

The hotel featured 906 rooms, a 750-foot showroom, 7 restaurants, and a health club.

Shortly after the casino opened, people were confusing it with Harrah’s Marina. Harrah’s Marina was known as a place for low-budget gamblers. As a result, the name was changed to the Trump Plaza Hotel and Casino.

The image of low-budget gamblers didn’t disappear with the name change. Trump Plaza had 85 suites that were reserved for high-rollers but were rarely occupied. After a year, the property was barely breaking even.

This led to the Trump Organization buying out Harrah’s half of the venture for $70 million the next year.

Despite the lack of profit, Trump looked towards growth and expansion and he spent $62 million to buy the adjacent property which was housing the troubled and unfinished Penthouse Boardwalk Hotel and Casino and he spent another $63 million to buy the Atlantis Casino Hotel, which was near the Trump Plaza, but was separated from the property by the Atlantic City Convention Hall.

Trump would tear down most of the Penthouse property and use part of the building as the east tower of Trump Plaza.

The Atlantis would bet was a prepackaged bankruptcy, which means that the terms were negotiated before the filing.

After emerging from bankruptcy, Trump began a $42 million expansion plan for the Trump Plaza. This involved razing the remnants of the Penthouse property and adding 30,000 feet of gaming space and over 350 rooms.

Construction on the expansion continued through 1996. A corridor was built over the Atlantic City Convention Hall to connect the Trump Tower to the newly renovated Trump Regency, which was renamed Trump World’s Fair Hotel and Casino.

In 2011, the Trump Organization decided that they would either sell or renovated the property. In 2013, the Meruelo Group was the leading interested party in buying the property, however, the company that held Trump’s loans rejected the offer.

Trump Plaza closed in September 2014. The building, after numerous delays, is still pending demolition as of March 2019.

The Trump Plaza was known for the events that Trump brought to Atlantic City. These included concerts, boxing, and most notably, WWF/WWE WrestleMania IV and WrestleMania V in 1988 and 1989. These 2 events were among the reasons that Trump was selected to be inducted into the WWE Hall of Fame Celebrity Wing in 2013.

The Trump 29 Casino

trump 29 casino

In 2001, The Trump Organization ventured west to California to team up with the Twenty-Nine Palms Band of Mission Indians.

In 1995, the Twenty-Nine Palms Band of Mission Indians opened the Spotlight 29 Casino. This was the first casino for the tribe. The tribe, having lacked the management experience in the industry, saw profits fluctuate over the 1st few years.

Seeing value in a partnership, the tribe sought out The Trump Organization to assist with the management of the casino.

Upon the start of the relationship, the casino was rebranded the Trump 29 Casino.

The casino at the time has 100,000 square feet of gaming space. It had approximately 1,000 slot machines and a dozen table games.

In 2006, the Twenty-Nine Palms Band of Mission Indians ended their relationship. Although no official reason was given, it was believed that the Twenty-Nine Palms Band wanted to expand the casino and Trump’s group was not willing to finance the expansion.

After the end of the relationship, Twenty-Nine Palms Band renovated the property and expanded to 250,000 square feet, added another 600 slot machines and 10 table games. They also added 2 restaurants, a food court, 2 bars, and the 2,200 seat Spotlight Showroom,

Upon the end of the relationship, the Trump 29 Casino reverted to the previous name, the Spotlight 29 Casino and is still operating under that name today.

The Trump Casino

trump casino indiana

In 1993, Indiana started issuing licenses for riverboat gambling. The Trump Organization was among the 1st in line to apply.

Trump’s initial attempts were rejected by the city of Gary, so Trump headed to the state gambling commission with a grand proposal.

The details included:

  • The boat would be approximately 350 feet long
  • It would contain 1,500 slot machines
  • Enough parking for 3,000 cars
  • With estimated revenue of over $200 million, the city of Gary would receive 1% of the gambling revenue and various taxes totaling $19 million each year
  • 2/3rds of the staff would be minorities from the surrounding cities
  • The Trump Organization would create a new charitable foundation receiving a 7½% share of the new venture, estimated to be over $10 million each year
  • A local area derelict hotel would be renovated near city hall and made part of the package

These details led to the gaming commission issuing a license to Trump in 1996.

In 1996, Trump signed a deal with a developer memorializing these points, although the language regarding minorities was changed from a definite statement to the less binding statement stating that they would “endeavor” to reach that goal.

The deal also called for a partnership with 8 area business partners to own 7½% of the new venture. However, the partners couldn’t afford the $1 million buy-in for the venture. A negotiation was made for the group to join with no money up front, but the Trump Organization eventually pulled the deal once the license was issued.

Trump pushed through with the construction of the docks and getting the casino opened. A few weeks before the opening, a lawsuit was filed by the investors. Six of the 8 settled out of court, the other 2 pressed on.

The case went to trial in 1999 and Trump stated: “I have never even seen them until this morning.  I never had a contract. I never even met any of these people. I was shocked by this whole case. I had no idea who these people were.”

One of the investors admitted that all contact was via Trump’s legal team.

Despite the testimony, The 2 investors were awarded $1.3 million by the jury. However, Trump appealed and the court overturned the decision saying no contract existed.

Trump ran the operation until 2004 when the parent company of the casino declared Chapter 11 bankruptcy. As part of the restructuring, a neighboring riverboat casino bought out the Trump Casino for just over $250 million.

The casino was renamed the Majestic Star II casino.

Incidentally, the charitable foundation was never established. Trump decided to use the Trump Foundation as the method of distributing charitable contributions to the city, which consisted of a number of scholarships for local students.

The dilapidated hotel by the city hall was never renovated and was eventually torn down.

Trump World’s Fair at Trump Plaza

Trump's World Fair

When the casino boom started in Atlantic City, one of the first companies to jump on the bandwagon was Playboy Enterprises. The Hugh Hefner led organization partnered with the owner of the Four Queens Hotel and Casino in Las Vegas, Nevada to open the Playboy Hotel and Casino.

This partnership would be short-lived however, as Playboy was refused a gaming license based on issues with a casino they owned in London.

After 3 years of partnership, Playboy Enterprises sold their share to the parent company of the Four Queens and the property was renamed Atlantis Hotel and Casino.

Following the acquisition of Playboy’s half of the property, the company filed for Chapter 11 bankruptcy.

This led to New Jersey rejecting their application for license renewal in 1989. The Atlantis was placed into conservatorship and the casino portion of the property was shuttered.

In June of 1989, Trump bought the Atlantis for $63 million.

Trump renamed the property the Trump Regency and it was used as a supplement to the Trump Tower Hotel and Casino which was on the other side of the Atlantic City Convention Hall.

The financial struggles of the Trump Organization in 1991 led to the company filing Chapter 11 bankruptcy. As part of the deal to emerge from bankruptcy, Chemical Bank, a creditor of Trump’s, acquired ownership of the property, but Trump’s organization still managed the property as part of the deal.

As the Trump Organization regained financial solvency, Trump re-purchased the Trump Regency for $60 million in June 1995.

The main reason for the purchase was that Trump wanted to completely overhaul the Trump Tower and the Trump Regency.

The plan called for expansion of both properties, a connection structure that was set above the Atlantic City Convention Hall to allow patrons of both hotels to interact and used each the facilities of both properties, a resumption of gambling at the Regency, and renovation of existing structures.

Once the expansion was complete in 1996, Trump renamed the Regency the Trump World’s Fair at Trump Plaza.

Despite the renovations, there were too many structural problems with the World’s Fair that couldn’t be resolved including an issue with a roof pool that leaked into lower floors.

The property was closed in late 1999 and torn down the next year. The property was then sold at auction.

Trump Marina

Trump Marina

Much like other casinos that Trump owned, Trump Marina had issues from its inception.

The trouble started near the completion of the building in 1985. The property was owned by Hilton Hotels. When they applied for the gambling license, the state rejected the application because of alleged ties of the company with organized crime.

Hilton had to find a buyer in quick fashion and Donald Trump stepped in to acquire the property.

Trump opened the casino on June 19th, 1985 as the Trump Castle.

The 1st few years of the casino resort were very successful. So much so that the television games shows Yahtzee and Trump Card were filmed on the property.

However, when Trump opened his Taj Mahal in 1990, revenue at the Castle dropped dramatically.

This combined with a slumping economy and issues with other Trump properties led Trump to miss a required bond payment to investors of over $300 million in 1991.

Trump’s organization declared Chapter 11 bankruptcy to restructure the debt.

As part of the deal, Trump gave away 50% of Trump Castle to creditors and in exchange, they forgave $25 million of the debt and gave Trump lowered rates on the interest owed.

By the end of 1993, Trump had repurchased the property form the creditors.

Trump wanted to change the theme of the casino, as he stated he never liked the castle idea, but he was stuck with it when it opened due to the way Hilton had built the resort.

His first attempt at rebranding the property came when he tried to sell 50% of the interest to a company known as the Rank Organization. The idea was for Rank to come in and they would re-christen the property as a Hard Rock Hotel and Casino. However, by the end of 1996, the deal fell through.

He next attempted to sell a 51% stake in the property to Colony Capital, who would then remodel the hotel and add a new tower to the property. The plan was to create a new theme and rename the property, Trump Marina. This deal fell through in March of 1997.

Despite the deal falling through, Trump moved forward with the new theme, renaming the property Trump Marina in June 1997.

Another attempt to sell the property was made 11 years later in May 2008. A company called Coastal Development wanted to buy the property and rename it Margaritaville and partner with singer Jimmy Buffett.

During the negotiations, the Great Recession hit and attempts by Coastal to secure the $316 million needed to buy the property failed. Negotiations didn’t break down however, as Trump’s bondholders wanted to unload the property. A reduced price of $270 million was offered to Coastal.

As time went on, property values were crashing (as was the case across the country). Coast made a final offer at $75 million in 2010, but it was rejected and negotiations fell through.

In 2011, Landry’s Inc., the company that owned such restaurants as Joe’s Crab Shack, Rainforest Café, and Saltgrass Steak House offered to buy the property for just $38 million.

After $150 million in renovations, Landry’s reopened the property as the Golden Nugget Atlantic City.

Trump Taj Mahal

Trump's Taj Mahal Casino

The Trump Taj Mahal story was similar to others in Trump’s portfolio. He acquired the property due to issues with the original owners not being able to complete construction. This time due to the death of the original owner.

Trump purchased a controlling interest in the company that owned the property, Resorts International for $79 million in 1987.

Construction costs for the project had already exceeded the original estimate of $250 million when the project started and by the time Trump came along, the cost skyrocketed to nearly $1 billion.

Trump then offered to personally finance the construction if all outstanding shares were sold to him for $22 a share.

An unexpected contender then appeared in the form of former talk show host Merv Griffin. He offered to buy shares for $35 each.

This lead to the 2 suing each other and eventually settling out of court. Griffin would buy Resorts International and Resorts International would sell Trump the Taj Mahal for $273 million.

The casino opened on April 2, 1990, and had 120,000 square feet of gaming space, which Trump claimed made it the largest casino in the world.

A year later, Trump’s bankruptcy would lead to creditors to be given 50% of the property in exchange for debt relief.

By 1996, Trump had re-acquired control of the property.

The casino would be the highest grossing casino in the city until 2003. At that time a new casino called the Borgata opened which was bigger than the Taj Mahal.

In 2008, a renovation to the property was done and the hotel was expanded to over 2000 rooms (the same number as the Borgata).

In February 2016, Trump Entertainment Resorts, the shell parent company for the Trump Taj Mahal, exited bankruptcy and became a subsidiary of Icahn Enterprises. The casino kept the “Trump Taj Mahal” name, even though Donald Trump no longer held any ownership stake.

October 10, 2016, the Trump Taj Mahal Hotel and Casino shuttered due to labor disputed with the unions. The following March, the hotel was sold to Hard Rock International and renamed Hard Rock Hotel & Casino Atlantic City.

Conclusion

A 40-year ride in the casino world ended with Donald Trump being elected the 45th President of the United States.

While other ventured in real estate would prove more successful for “The Donald” his foray into the casino world was not a complete failure, as he tended to make profits on the sales, it couldn’t be considered successful either as most ventures ended within a decade of the start of his ownership.

Even so, he was largely responsible for the positioning of Atlantic City as the number 2 gambling destination in the United States and the boom they experience in the 1980s.

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