“The house always wins” is one of the truest statements in all of online gambling. Except it wasn’t true for the 45th (and soon to be 47th) President of the United States.
One of Donald Trump’s many business ventures before he decided to become a politician was a chain of casino and resort locations all around the US. In this piece, we will take a look at these properties and why they ultimately failed.
The Rise and Fall of Trump Hotels and Casino Resorts
It’s hard to imagine now, but in 1982, Donald Trump was not famous. Not as famous as he was today at least.
The future president was just six years removed from starting his first major property development, the Grand Hyatt Hotel. Despite the relative success of this deal, to many, he was still just “Fred Trump’s son.”
This is why it was such a bold move in 1982 when Trump hatched the idea to build a brand-new Atlantic City casino empire. In 1984, he put these plans into action by purchasing the Harrah’s Boardwalk Casino from the Holiday Inn corporation and renaming it the Trump Plaza Hotel and Casino.
Just a year later, in 1985, Trump spent $325 million on the brand-new Atlantic City Hilton hotel and casino, which later became the Trump Marina.
In 1988, he bought out another existing project, the Resorts International Taj Mahal, for $230. The final cost of that project ballooned to over $1 billion. Due to the high cost of the Trump Taj Mahal, Trump Hotels & Casino Resorts filed for bankruptcy in 1991.
The company went public in 1995 and opened up multiple other locations around the US–including Trump Casino in Gary, Indiana–but it was functionally dead after that first bankruptcy.
If you need any more proof of that, Trump began offloading his casino properties to the Trump Hotels and Casino Resorts company. The business itself filed for bankruptcy three more times after 1991 before going bust officially in 2016.
Why were Trump’s casino ventures a failure?
No one disputes that Trump didn’t know much about running casinos. His and his father’s wealth came from renting apartment buildings, commercial real estate, and hotels in New York, not Atlantic City Casinos.
It’s also undisputed that Trump paid himself millions of dollars in the 80s via Trump Hotels and Casino Resorts while his casino properties were failing. There are also credible reports of him purposefully not paying contractors for work on his casinos.
However, none of these factors were as important as the fact that the Atlantic City casino market was not as strong in the 1980s and 90s as it once was. In 1990, Atlantic City casino revenue was growing by just 1.35%, below the rate of inflation.
As leading casino investment analyst Marvin B. Roffman said just days before the Trump Taj Mahal, “The market just isn’t there.”
To make matters worse, the country was entering a recession and Trump’s casinos were cannibalizing each other. Trump’s properties in Manhattan were losing value and his existing Trump Marina and the Trump Plaza casinos lost almost $60 million in annual revenue after the Taj Mahal opened in 1990.
Given the circumstances, Trump’s casinos could not sustain themselves. The company filed for bankruptcy in 1991 and suffered a slow death until finally going under in 2016.
Hard Lessons: What Can We Learn from Trump's Failures?
Trump’s casino failures were a mix of his own personal business decisions and the market collapsing. Ultimately though, this is a story of over-expansion. Trump invested too much too fast into his casino properties and it came to bite him.
We see this story play out every year with new online casinos who enter the market with big plans that they don’t have the capital to deliver on. In the end, it’s always the players who suffer.
If you want to keep all your money, you should stick with the best online casinos that you can trust, such as Cashed, MyChance, and Spinsy.
