Did Trump Really Make Billions In Atlantic City?Estimates Vary Widely From His Past In Gambling Town |
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It’s difficult to tell between fact and fiction when it comes to Donald Trump’s results in Atlantic City. The one-time Atlantic City boss boasted in 2013 that he “never went bankrupt” and that he was “plus $10 billion” from his dealings in Atlantic City.
He first got involved with Atlantic City in the early 1980s and remained a presence until just a few years ago. He once owned three casinos there—Trump Plaza, Trump Castle and Trump Taj Mahal. He reportedly didn’t invest much of his own cash, perhaps as little as $55 million.
Technically it’s true that he personally never went bankrupt, but his casino business did five separate times. Through complex processes of financing, bankruptcy and corporate restructuring, it’s unclear how much capital he was able to accumulate there and move to other investments.
“Atlantic City fueled a lot of growth for me,” Trump said of how the seaside town bankrolled him. “The money I took out of there was incredible.”
According to a recent report from CNNMoney, Trump made $39 million in salary, bonuses, options and other compensation from his time in Atlantic City, which could be all the cash he was able to gain directly from his years there, because, as an in-depth look at his former Atlantic City empire by PhillyMag.com points out, Trump didn’t sell off his holdings in Atlantic City before they tanked. He lost it all in the former gambling Mecca of the Northeast.
The last casino there that bears his name will close in October, despite being rescued from Chapter 11 bankruptcy by Trump supporter Carl Icahn, a billionaire businessman with an already existing interest in the city’s gambling industry.
There were financial problems for Trump while developing the Taj, as $500 million was spent on the casino and it wasn’t even close to opening. It took another $500 million to finish the project, which brought the total debt on the casino to $820 million.
It eventually opened in April of 1990, but the financial problems had left Trump deep in debt and the Taj filed for Chapter 11 a year after opening.
According to The New York Times, in August of 1990, New Jersey regulators noted the “sheer volume of debt” on Trump’s holdings. The total debt was $3.4 billion, which included $1.3 billion on three casinos and $832.5 million in loans personally guaranteed by Trump. Regulators said there was “the possibility of a complete financial collapse of the Trump Organization.”
The result at the time was Trump losing half his interest in his casino business. He also had to sell a private yacht and plane to help cover the losses.
Trump’s casino company itself, Trump Hotels and Casino Resorts Inc., filed for bankruptcy in 2004 with $1.8 billion in debt. This time Trump’s ownership was cut to 28 percent. The company posted a loss every year it was public between 1995 and 2004.
It had become a penny stock.
After emerging from bankruptcy, the company was called Trump Entertainment Resorts. Trump’s stake was later reduced to just 10 percent when the company filed for bankruptcy again in 2009 after losing $2 billion since the last bankruptcy.
Despite the failures, two brick-and-mortar casinos still have his name (Trump Castle is now the Golden Nugget). However, Trump Plaza, the first casino he opened in Atlantic City, closed in 2014 and the Taj Mahal went through bankruptcy again and is now in Icahn’s portfolio, which finally completely wiped out Trump’s stake in the casino.
He no longer had any control over the property he once called “the eighth wonder of the world.” Still, it was clear that his brand was still worth quite a lot in Atlantic City.
The real estate tycoon’s net worth is a topic of much debate. He claims it’s “in excess $10 billion,” while Forbes, widely recognized as a leader in net worth calculations, pegged it at $4.5 billion. Bloomberg estimated it at $2.9 billion.
An investor who once had $500,000 worth of stock in Trump’s Atlantic City casino business, told the NYT that “people underestimated Donald Trump’s ability to pillage the company.” Perhaps no one will ever know for sure how much overall wealth he was able to squeeze out of Atlantic City and invest elsewhere, such as nearby Manhattan.
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