Russ Buettner and Charles V. Bagli, How Donald Trump Bankrupted His Atlantic City Casinos, but Still Earned Millions. The New York Times, 11 June 2016. “[Trump’s] audacious personality and opulent properties brought attention — and countless players — to Atlantic City as it sought to overtake Las Vegas as the country’s gambling capital. But a close examination of regulatory reviews, court records and security filings by The New York Times leaves little doubt that Mr. Trump’s casino business was a protracted failure. Though he now says his casinos were overtaken by the same tidal wave that eventually slammed this seaside city’s gambling industry, in reality he was failing in Atlantic City long before Atlantic City itself was failing.”
But even as his companies did poorly, Mr. Trump did well. He put up little of his own money, shifted personal debts to the casinos and collected millions of dollars in salary, bonuses and other payments. The burden of his failures fell on investors and others who had bet on his business acumen.
In three interviews with The Times since late April, Mr. Trump acknowledged in general terms that high debt and lagging revenues had plagued his casinos. He did not recall details about some issues, but did not question The Times’s findings. He repeatedly emphasized that what really mattered about his time in Atlantic City was that he had made a lot of money there.
Mr. Trump assembled his casino empire by borrowing money at such high interest rates — after telling regulators he would not — that the businesses had almost no chance to succeed….
During a decade when other casinos here thrived, Mr. Trump’s lagged, posting huge losses year after year. Stock and bondholders lost more than $1.5 billion.
All the while, Mr. Trump received copious amounts for himself, with the help of a compliant board….
Mr. Trump now says that he left Atlantic City at the perfect time. The record, however, shows that he struggled to hang on to his casinos years after the city had peaked, and failed only because his investors no longer wanted him in a management role….
[Trump] put a number of local contractors and suppliers out of business when he didn’t pay them,” said Steven P. Perskie, who was New Jersey’s top casino regulator in the early 1990s. “So when he left Atlantic City, it wasn’t, ‘Sorry to see you go.’ It was, ‘How fast can you get the hell out of here?’”…
Less than two weeks before the casino [the Taj Mahal] opened, Marvin B. Roffman, a casino analyst at Janney Montgomery Scott, an investment firm based in Philadelphia, told The Wall Street Journal that the Taj would need to reap $1.3 million a day just to make its interest payments, a sum no casino had ever achieved.
“The market just isn’t there,” Mr. Roffman told The Journal.
Mr. Trump retaliated, demanding that Janney Montgomery Scott fire Mr. Roffman. It did….
As all of his ventures neared collapse [in 1990], Mr. Trump’s lenders insisted that he submit a business plan, appoint a chief financial officer for the Trump Organization and sell, among other things, the Trump Shuttle airline, his yacht and his stake in New York City’s Plaza Hotel, which also filed for bankruptcy protection. They also put him on a $450,000-a-month budget for personal and household expenses.
Just over a year after it opened, the Taj Mahal was in bankruptcy court, followed in 1992 by both the Plaza and the Castle. In the plan that was worked out, Mr. Trump ceded to the lenders a 50 percent stake in the businesses in return for lower interest rates. The lenders agreed to defer certain principal and interest payments and hold off on personal claims against Mr. Trump for five years. But there was little or no reduction in the enormous debts that would plague his gambling empire far into the future.
Mr. Trump now says he looks back on the period as his golden era in the casino business.
“Early on, I took a lot of money out of the casinos with the financings and the things we do,” he said in a recent interview. “Atlantic City was a very good cash cow for me for a long time.”
Others were hurt….
In reality, the revenue at Mr. Trump’s casinos had consistently lagged behind their competitors’ for a decade before larger forces ravaged the industry. Beginning in 1997, his share of the Atlantic City gambling market began to slip from its peak of 30 percent.
Revenues at other Atlantic City casinos rose 18 percent from 1997 through 2002; Mr. Trump’s fell by 1 percent….
Had Mr. Trump’s revenues grown at the rate of other Atlantic City casinos, his company could have made its interest payments and possibly registered a profit. But with sagging revenues and high costs, his casinos had too little money for renovations and improvements, which are vital for hotels to attract guests. The public company [Trump Hotels and Casino Resorts] never logged a profitable year.
Additional resource: Democracy Now!, “How Donald Trump Bankrupted His Casinos, Left Contractors Unpaid, Ruined Investors & Made Millions.” 16 June 2016.