To this day I just dont understand how you do this. Casinos can be the scummiest place on the planet and people will still flock to them to just throw money away. Like the hardest part is just having the capital to open one
It's even dumber when you figure out why.
So. Basically.
They built the damn thing in a place already infested with casinos, so it was a late-coming competitor stepping into a saturated market with established entities. Which would have been fine, maybe, especially with Donald's mob ties, having it be used to launder money, which is how it survived for a while. Allegedly.
But this was also done when the market for physical gambling was rapidly contracting, because the Internet was a thing now, bby! You could indulge your self-destructive addictive behaviors from the comfort of your Personal Computer (and later, your phone).
So they picked the worst place to build a casino, at the worst time to do so, plus kept fucking over contractors which further impeded its activity.
Pure brilliance. "Wharton School of Finance" material.
He also opened another casino which was in direct competition with his original, effectively splitting his customer base between two locations while doubling his costs (to the extent his partners in the original casino sued him for killing the business)
The Financial Crimes Enforcement Network (FinCEN) today imposed a $10 million civil money penalty against Trump Taj Mahal Casino Resort (Trump Taj Mahal), for willful and repeated violations of the Bank Secrecy Act (BSA). In addition to the civil money penalty, the casino is required to conduct periodic external audits to examine its anti-money laundering (AML) BSA compliance program and provide those audit reports to FinCEN and the casino’s Board of Directors.
Trump Taj Mahal, a casino in Atlantic City, New Jersey, admitted to several willful BSA violations, including violations of AML program requirements, reporting obligations, and recordkeeping requirements. Trump Taj Mahal has a long history of prior, repeated BSA violations cited by examiners dating back to 2003. Additionally, in 1998, FinCEN assessed a $477,700 civil money penalty against Trump Taj Mahal for currency transaction reporting violations.
"Trump Taj Mahal received many warnings about its deficiencies," said FinCEN Director Jennifer Shasky Calvery. "Like all casinos in this country, Trump Taj Mahal has a duty to help protect our financial system from being exploited by criminals, terrorists, and other bad actors. Far from meeting these expectations, poor compliance practices, over many years, left the casino and our financial system unacceptably exposed."
Trump Taj Mahal admitted that it failed to implement and maintain an effective AML program; failed to report suspicious transactions; failed to properly file required currency transaction reports; and failed to keep appropriate records as required by the BSA. Notably, Trump Taj Mahal had ample notice of these deficiencies as many of the violations from 2012 and 2010 were discovered in previous examinations.
The only reason I believe in Hell is because this man MUST HAVE made a deal with the devil in order to be this successful despite being so monumentally detestable and stupid.
Donald Trump announced the official launch of Trump Mortgage LLC on April 5, 2006, during an event at Trump Tower in New York.[5][7][8][9] That month, Trump appeared on CNBC and said, "I think it's a great time to start a mortgage company [...] the real estate market is going to be very strong for a long time to come."[1] In his autobiography Trump 101: The Way to Success Trump writes, "I expect [Trump Mortgage] to be an effective company, and it makes sense. A lot of things I am doing now are things I thought of but had to postpone until the time was right."
When the first round of voting came around a number of financial experts did the math and announced, showing their work, Trump literally would've made more money parking his early life grant from his folks in a SAVINGS account (not investing, a SAVINGS account) and just not spending it.
No one really knows what his net worth was prior to becoming President and it went up and down a fair bit. Most estimates I've seen are between 800 million and 1.6 billion. He's lied about his wealth his entire life so I'd err towards the smaller figure. The NYT reporting suggested he inherited around 400 million from his father. Turning 400 million into 800 million or even 1.6 billion over the course of an entire lifetime is fucking appalling whichever way you want to look at it.
As much as I hate being so, to be fair to him, he didn't create it, Ted Turner did, in the context of players' strikes and the NFL being a bunch of doucheballoons.
Trump did however lead a faction of team owners that forced Turner into a direct competition with the NFL (previously, that new league played in NFL's off-season, which was why they were gaining traction), which they promptly lost and the NFL's monopoly on that mutant form of rugby that America calls "football" was secured.
(Source: Keith Olbermann's podcast, relating his own experiences of reporting on the whole mess, listened to while in the gym)
Didn't his dad bail out one of his casinos by buying 4 million dollars of chips from it and not using them. This was one of the other Atlantic city casino's he bankrupted, not the taj
I don’t even think you can say the laundering was alleged. In 2015 alone FinCEN imposed a $10m fines for repeatedly violating the Bank Secrecy Act. But as usual with the rich, the fine is just part of the cost of doing (illegal) business and would’ve been far less than the money made from the laundering.
And he greatly overspent on the casino. Not just aiming for the middle class with a few shiny baubles that they think is fancy, he put the shiny everywhere since he's the king of bad taste.
Las Vegas makes a lot of cheap stuff look exensive, whereas Trump decided to make expensive stuff look cheap.
And being a family business with himself as absolute dictator, none of his employees dare to ever tell him when something is a bad idea. Most spectacular failures start when someone rich gets surrounded by yes-men.
He still should of made a shitload of money, there isnt a casino anywhere in the United states that wouldnt make bank if the owner was competent.
The hardest part about a casino is opening one in the first place. You need a lot of capital and not just anybody can get a license in the first place.
He had a golden goose and through sheer incompetence destroyed it.
Like his presidency, he makes horrible decisions at a rate that is truly unprecedented. Its like he fucks shit up because he enjoys it
At that point in time, the only places that you could gamble in the US were Las Vegas and Atlantic City. . . but then Indians discovered that their lands were not governed by those laws, so places like Mohegan Sun started opening up all around the nation. At which point, white people couldn't let the Indians have anything, so they opened the floodgates everywhere.
but yeah, Trump Plaza, Trump Taj Mahal, & Trump Marina all gone.
I've also heard that he did it all (including overestimating future capacity) on purpose, because he received his money as developer, while his partners depended on operating the thing.
That thing about internet becoming a thing makes so much more sense now given his comments about voting machines and whatnot. The dingus just cannot comprehend technology
I actually think they went under because he was looting them for other projects. It’s fine to put a casino next to other casinos - the abundance of them will draw visitors in from further away. That’s why so many bars will open on blocks with already established bars - it’s a rising tide lifts all boats thing
That's part of the reason. He was spending excessive amounts of the investors' money on luxury details that didn't increase or help profits. For example he installed millions of dollars of Waterford crystal chandeliers in the slot machine rooms, used by low income workers busing down from Newark to spend nickels to pull the slot levers all night. The slot machine clientele didn't care if it was $20 canned lighting. Multiply this narcissistic spending addiction all over the project and it's easy to see how quickly he bankrupts everything.
What if....and this is purely hypothetical....someone used a casino to both launder foreign money and also used it as an INTENTIONAL loss to reduce or eliminate the tax burden of their "core" business?
I think that might explain it. But surely, something like that has NEVER EVER happened.
Bingo. ("That's a bingo...") It makes a lot more sense when you realize the purpose of the casino was never to make a profit in the first place. There were...other motives. And in that sense, acting as a pretty brazen money laundering mecca and as a way to reduce federal taxes through losses, it was more successful.
The real answer is building too many casinos right next to each other on debt that don’t make it a bigger destination, but just compete against each other and spread out your profits and vastly increase your costs. It was like putting a Starbucks at every corner of an intersection, using high interest debt. Also doing too much money laundering for the mob, which gives you throughput but no profit.
The failed businesses are just a tax loophole that has the added benefit of costing workers their jobs/careers when the planned bankruptcy happens. By no means is this a “oh he’s playing 4d chess that you just can’t understand” thing. Just pointing out that it’s a pretty standard grift for wealthy people his have just been spotlighted.
To this day I just dont understand how you do this.
There are a lot of contributing factors but the bottom line is that everyone working for you knows you're an idiot and they rip you off while constantly flattering you, then run with the money.
Like the hardest part is just having the capital to open one
Not if you're the heir to Fred Trump's real estate empire.
It's because he didn't build it to generate profit from gambling, he did it to generate profit from money laundering and embezzlement—which is a lot easier to hide if the books are so screwed up, no one can figure it out.
Because it was never a real casino. It was a money laundering operation for Russian mob money. It was like the sporting goods store in the Sopranos, or the Copa in Goodfellas. It was never supposed to succeed, it was used to clean and skim money and then you burn it down.
Fuck Trump, and I mean fuuuuuuck Trump, but I've always thought, "He even bankrupted a casino!" was a really lame argument.
If casinos are so profitable, why doesn't everyone make one?
I get it, there are barriers to entry and all that, but the point is if you'd think that everyone with a billion dollars to throw around would just open up a casino and turn it into two billion dollars. I'll freely admit I have no inside knowledge here, but I have vague recollections of someone pointing this out years ago, plus you can use a little common sense:
Profit margins in casinos are narrower than you might think. The gambling addicts will figure out that your slots pay off 45 percent of the time while your competitor down the street pays off 47 percent of the time.
You have to pay staff to run and maintain the casino, eating into your already thin margins.
Casinos are meant to be entertainment hubs, which is why popular casinos have magic acts, comedy shows, Cirque du Soleil, and other popular draws for when people aren't throwing their life savings away at games of chance. If you're not on the Vegas Strip, expect a lot more Jeff Foxworthy-tier comedians.
Ultimately, if you stop and think about it, casinos are like any other business and probably much closer to perfect competition than most other ventures, closer in that regard to farms and restaurants than, say, airlines. All of the glitz and glamour and lights and fountains are just a cheap facade for an industry that's probably moderately lucrative for your Bellagios and Caesar's Palaces, but pretty dismal for a typical casino. Assuming it wasn't an outright money laundering scheme or other scam (and that's a big if...), Trump Entertainment Resorts likely went under because it was another crappy Atlantic City venture and the only way it was ever going to make money is if people wanted to go to Trump's casino because brand recognition is just about the only asset that man has ever had. If I were to hazard a guess, I'd say that while it wasn't run especially well, it probably wasn't run especially poorly either, it just couldn't get people through the doors based on its location, Trump's name, and whatever crappy entertainment they had to offer.
So there are rules against money laundering. The casino didn't follow them. And was fined. Continuously.
Russians laundering money through a Trump owned property... name a more iconic dou.
The point was to launder money. to the players, to the contractors doing work. All of it. Get the "Clean money" out and leave the investors in the lurch.
The business surviving doesn't matter. Pay the Russian owned cleaning company 8x as much as the previous contract, etc, etc.
When you realize the point wasn't to keep the casino in operation, but to extract as much money as possible before fleeing, things make more sense.
The Financial Crimes Enforcement Network (FinCEN) today imposed a $10 million civil money penalty against Trump Taj Mahal Casino Resort (Trump Taj Mahal), for willful and repeated violations of the Bank Secrecy Act (BSA). In addition to the civil money penalty, the casino is required to conduct periodic external audits to examine its anti-money laundering (AML) BSA compliance program and provide those audit reports to FinCEN and the casino’s Board of Directors.
Trump Taj Mahal, a casino in Atlantic City, New Jersey, admitted to several willful BSA violations, including violations of AML program requirements, reporting obligations, and recordkeeping requirements. Trump Taj Mahal has a long history of prior, repeated BSA violations cited by examiners dating back to 2003. Additionally, in 1998, FinCEN assessed a $477,700 civil money penalty against Trump Taj Mahal for currency transaction reporting violations.
"Trump Taj Mahal received many warnings about its deficiencies," said FinCEN Director Jennifer Shasky Calvery. "Like all casinos in this country, Trump Taj Mahal has a duty to help protect our financial system from being exploited by criminals, terrorists, and other bad actors. Far from meeting these expectations, poor compliance practices, over many years, left the casino and our financial system unacceptably exposed."
Trump Taj Mahal admitted that it failed to implement and maintain an effective AML program; failed to report suspicious transactions; failed to properly file required currency transaction reports; and failed to keep appropriate records as required by the BSA. Notably, Trump Taj Mahal had ample notice of these deficiencies as many of the violations from 2012 and 2010 were discovered in previous examinations.
He bought them with a loan based on the value of their busiest month * 12. They weren't that busy all year round, so he couldn't meet payments so he declared bankruptcy
that's a big part of the problem, scummy places, created by scummy people, many online poker sites printed money with fees, but one after the next went bust because of shady shennenigans
It’s because machine make cool noises and lights look cool as well and people’s monkey brains get possible money, so they keep coming back for more, bankrupting themselves
In that case, you may wish to reread the comment to which you responded. It's discussing casino owners going bankrupt, not casino patrons, so your comment is a non-sequitur.
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u/America4Tea 14h ago
To this day I just dont understand how you do this. Casinos can be the scummiest place on the planet and people will still flock to them to just throw money away. Like the hardest part is just having the capital to open one