Donald Trump Left His CEO Position from Trump Entertainment in 2009, Amidst His Third Bankruptcy
Donald Trump tweeted a cryptic remark this week which suggested he has plans to rescue the failing Trump Plaza and Trump Taj Mahal. Trump Plaza closed on September 16, the day that the Donald Trump sent out his message. Court records from a bankruptcy filing show that Trump Taj Mahal is likely to close by mid-November.
In his tweet, Donald Trump said, “I left Atlantic City years ago, good timing. Now I may buy back in, at much lower price, to save Plaza & Taj. They were run badly by funds!”
Donald Trump in Atlantic City
Donald Trump’s history in Atlantic City has been a roller coaster ride. When he built the Trump Plaza in the early 1984, Atlantic City appeared to be on the rise and many people saw the city as an east coast rival to Las Vegas.
Yet Trump entered bankruptcy three times over the years. The third time was in 2009, in the wake of the real estate market crash and the Global Recession. At the time, investors forced Donald Trump from his position as CEO of Trump Entertainment Resorts. They gave him 5% interest in the company in order to continue to use his name in perpetuity, along with another 5% interest for his long time spent with the company.
Since then, Trump Plaza and Trump Taj Mahal have been controlled by hedge funds. They operated the casinos like they might any other business, cutting costs where they could, but people have complained that the properties have appeared shabby and rundown, especially in the case of Trump Plaza. Few people claimed to be surprised that the Plaza closed.
Can Donald Trump Save His Old Casinos?
Alan R. Woinski, a casino gaming analyst, says that Trump is right about the company managing the properties at present. That does not mean Donald Trump is the man to rescue those properties, though.
Woinski told CBS News, “He seems to think that everyone has forgotten that the first three bankruptcies were his…What is he going to bring to the table that these guys don’t have? He is much better at TV shows and real estate than he was at managing casinos.”
To do anything, Trump would need the blessing of Carl Icahn, the activist investor who presides over Trump Entertainment. Icahn is one of the men who forced Trump out in the first place, and Donald Trump is currently suing the company in order to take his name off their gaming company and its properties.
Atlantic City’s Rise and Fall
Woinski isn’t likely to be the only one to wonder whether the reality TV star and real estate mogul is the man for the job. The history of Donald Trump’s own troubles with bankruptcy are well known. While he was synonymous with Atlantic City in its glory days in the 1980s, by the time Donald Trump added the Trump Taj Mahal in 1990, the city’s resorts had become the site championship boxing matches and concert tours. Already, though, the seeds were being sown for the gaming industry’s demise. A decision by New Jersey politicians to allow a deadline to sign up for the 1992 PASPA legislation proved fateful, as the state’s one opportunity to legalize sports betting was lost.
Such a missed opportunity did not appear important at the time. In 1989, New Jersey was one of two U.S. states with legalized casino gambling. The Internet was not accessible to mainstream Americans.
America’s Changing Casino Industry
A court case involving Native American reservation sovereignty rights before the U.S. Supreme Court changed the map for casino gambling in the United States. Due to tribal gaming casinos, laws that allows racetracks to host casino-style gambling, and even private-funded casino operations, 40 U.S. states now have land casinos.
Online gambling has created a whole new class of gamblers who never played in Las Vegas or Atlantic City, but it also took away customers from the brick-and-mortar operations, too. Meanwhile, non-tribal gaming venues were filling up most states, including Pennsylvania, which is
Of course, Donald Trump has made more comebacks than , so one shouldn’t completely dismiss his suggestion he’ll reverse the waning fortunes of the Atlantic City casinos. Israel Posner, director of the The Lloyd D. Levenson Institute of Gaming, Hospitality & Tourism at Stockton State College, told CBS, “Certainly, I can’t predict what Donald Trump has in mind. Whether or not this makes good business sense is something that only Donald Trump knows.“
