The American Gaming Association last week continued its attempt to education presidential candidates on the facts of the casino industry. AGA President & CEO Geoff Freeman visited Ohio last week to participate in a roundtable discussion at Hollywood Casino Columbus with Reps. Joyce Beatty and Steve Stivers from the Ohio Congressional delegation.
“Gaming in no longer a niche, novel industry but an economic driver in Ohio that is providing a path to the middle class in Columbus, Cleveland, Cincinnati and beyond,” said Freeman. “We encourage presidential candidates to get to know the gaming industry as they seek votes from thousands of Ohioans whose jobs depend on casinos.”
Ironically, the casino industry was front and center at the Republican debate the next day held in Simi Valley, California. But the attention probably wasn’t what the AGA had in mind. And not surprisingly, former casino owner Donald Trump was the focus.
Jeb Bush accused Trump of making political donations to grease the skids for casino gaming in Florida during the time Bush was governor. Donald Trump denied it, saying, “”I promise, if I wanted it, I would have gotten it.”
But the facts say something different. John Trasher, speaker of the Florida House at the time, confirmed Bush’s claims.
“The bottom line is Donald Trump was interested in casino gambling in Florida, I can tell you that for a fact,” he said. Thasher says he met with Trump twice and each time they discussed a bill that would have permitted the Seminole tribe to have a casino. Trump was working with the tribe on a deal to manage the tribe’s casinos, which eventually fell through. The casino is now one of several including the Seminole Hard Rock properties in Tampa and Hollywood.
Trump spokeswoman Hope Hicks equivocated a bit, saying, “Mr. Trump never asked Jeb Bush personally to approve casino gambling.”
Lobbyist Fred Baggett the Bush meeting didn’t happen, but it wasn’t for a lack of trying. Baggett says he tried repeatedly to line up a meeting between the two.
“He wanted to meet Jeb directly to discuss casino gambling,” said Bobby Martinez, who led Bush’s transition team. “I knew that Jeb had no interest in introducing casino gambling in Florida and I politely told Fred that I could not and would not arrange a meeting with Jeb.”
Later, after Trump criticized the business career of Carly Fiorina, she blasted Trump for going into bankruptcy four different times for his casino company and its Atlantic City properties. While Trump defended those proceedings as just business, he denied, correctly, ever declaring personal bankruptcy.
However his claims that he got out of Atlantic City intact before things got bad don’t hold water. His first corporate bankruptcy was in 1991, just months after his Trump Taj Mahal opened (as famously forecasted by Janney Montgomery Scott gaming analyst Marvin Roffman, who was fired by his company, sued to regain his position and got a huge settlement from Trump). He personally was said to have lost $900 million in this settlement, gave up half equity in the Taj, and was forced to see his plane and yacht.
Bankruptcy number two occurred just a year later over Trump Plaza, which had lost $500 million. He again gave up half equity and was removed from day-to-day responsibility for the hotel. But he didn’t take a huge personal hit on this failure.
The third bankruptcy occurred a little more than 10 years later. Trump Hotels and Casino Resorts, which at the time included three properties in Atlantic City, was $1.5 billion in debt (one media report claimed that Trump had to pump more than $70 million of his own money into the company to keep it afloat). The resolution included the lost of much of Trump’s equity in the company, to about 25 percent. And Atlantic City was still booming during this time, revenues rising every year until 2007.
And finally the bottom fell out in 2009 after the Great Recession hit. After missing a bond payment of $54 million, he was removed from any managerial oversight, and his equity stake was reduced to 5 percent (with an option to repurchase another 5 percent). He said at the time that his investment was “worthless.” The only remaining casino, Trump Taj Mahal, without any role by Trump, again declared bankruptcy. Plans are in place to emerge from bankruptcy and turn it over to new owner, Carl Icahn, who ironically has been cited by Trump as a great candidate for his secretary of the Treasury.
So political pressure and financial distress. Probably not the message the AGA had in mind last week.
