Trump by Donald Trump

Author:Donald Trump [Trump, Donald J.]
Language: eng
Format: epub
Publisher: Random House
Published: 2016-11-17T00:00:00+00:00

8

GAMING

The Building on the Boardwalk

THE FIRST TIME the economics of the casino gaming business really came home to me was one day late in 1975. I was driving along in my car, to yet another meeting about the Commodore Hotel deal, when a news report came on the radio. Hotel employees in Las Vegas, Nevada, the announcer reported, had just voted to strike. Among other consequences, the stock price of Hilton Hotels, which owned two casinos in Las Vegas, had dropped tremendously. By this time I knew something about the hotel business, but I was still stunned. How was it possible that the stock of a company that owned at least a hundred hotels worldwide could be hurt so badly by a strike against just two of them?

When I got back to my office, it took only a small amount of research to find out the answer. Hilton, it turned out, owned more than 150 hotels worldwide, but its two casino hotels in Las Vegas accounted for nearly 40 percent of the company’s net profits. By comparison, a hotel such as the New York Hilton—one of the biggest in Manhattan and one I’d always assumed was a huge success—accounted for less than 1 percent of overall Hilton profits. It was a sobering thought. For nearly two years, I’d been working day and night to try to build my own huge hotel on 42nd Street. I wasn’t getting my approvals, I wasn’t getting my financing, and it seemed highly likely that the whole deal was going to fall through. Now, for the first time, it occurred to me that even if I finally got the hotel built and it became a major success in the greatest city in the world, it still wouldn’t be nearly as profitable as a moderately successful casino hotel in a small desert town in the Southwest.

By this point I had invested a great deal of time in the Commodore deal, and I tend not to give up on something I’ve started. But what I did, shortly after I heard that radio report, was take a trip down to Atlantic City. A year earlier, a referendum to legalize gambling throughout the state of New Jersey had been badly defeated. Now a new initiative was on the 1976 ballot, to legalize gambling solely in Atlantic City.

It certainly seemed worth checking out. I’ve never had any great moral problems with gambling because most of the objections seem hypocritical to me. The New York Stock Exchange happens to be the biggest casino in the world. The only thing that makes it different from the average casino is that the players dress in blue pinstripe suits and carry leather briefcases. If you allow people to gamble in the stock market, where more money is made and lost than in all the casinos of the world put together, I see nothing terribly different about permitting people to bet on blackjack or craps or roulette.

To me, the key questions about legalizing gambling in Atlantic City were economic.

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