re: #264 Dr Lizardo

More than a few of my students burst into laughter when I told them Trump crashed a few casinos back in the day. I honestly can’t say what it’s like to actually run a casino as I’ve never done it, but the general consensus, at least here, is owning a casino is like having an ATM machine that spits out free money 24/7.

Trump made a classic blunder in opening a business: he opened two casinos in a small city that was barely able to support four existing casinos. Atlantic City is not like Vegas. It’s a small town, which did not have especially good transportation. To sell his investors on his casino projects, Trump said he would use Trump Air to fly people in from NYC and elsewhere. He didn’t. Only high-rollers and celebrities came in by helicopter. Everyone else came in by coach, like plebes.

To build his casinos, Trump borrowed a lot of money. They were over-leveraged, and the market in AC was already saturated. Plus, there were two Trump casinos competing against each other, and against four other “name-brand” casinos, which had been there for a few years already.

So, you had a recipe for disaster. Much of the proceeds had to service debt. Traffic was low, because of competition, poor accessibility and a weak economy. As I understand, the Trump casinos were not all that special — so there was no particular reason to gamble there, as opposed to the others.

That’s how you lose money running a casino. By being stupid.