Trump didn't "lose" a billion dollars over 10 years, he laundered it

[Recursion]

The press are completely missing the point here. Sure, it's kind of funny for a Very Stable Genius to lose a billion dollars on a casino. Why is that funny? Because it can't actually be done; casinos can't lose money. The machines don't even have a setting for that.

What they can do is "lose" money by sending it to the person who was the actual beneficiary of the loan, but who needs to be off the record for legal reasons.

[The Velveteen Ocelot]

1. I have no doubt that he was up to his shriveled orange gonads

in laundered money. Casinos and real estate are the best vehicles for money laundering and he was into both.

[Liberty Belle]

2. Your premise is inaccurate.

Last edited Sun May 12, 2019, 02:06 AM - Edit history (1)

Casinos can lose money. Two in our area closed due lack of profitability.

One was in a remote area and didn't adequately market, so didn't get enough traffic.

The other was too close to another casino across the freeway and had an embezzlement issue. Both were tribal owned in an a area with lots of tribal casinos.

It is of course possible that Trump did launder money through his casinos, which would be perfectly in character for him, but not every casino is a winner in the end.

[The Velveteen Ocelot]

4. Trump's casinos were in major cities and were heavily marketed.

They should have been profitable, but all of them ended up bankrupt. They were either completely mismanaged or used for money laundering or most likely both.

[Xolodno]

11. Stupidity in reading the market and mismanagement. That's how Trump lost...

...He didn't see the writing on the wall of Indian Casino's of becoming regional draws. He saw it as only two places of legal gambling, Las Vegas and Atlantic City....and invested at the peak of the market.

He thought he would cash in on the traditional mob scene...when a lot of it left when it became corporate. Some casino's saw the writing on the wall, they brought in the shows...at top dollar, raised the cost of buffets, dispelled the myth of cheap hotel rooms, etc. In other words, they stopped relying on gambling as their source of revenue...whereas he, doubled down on a bad hand...while other corporate casino's decided to merge.

I'm going to Vegas nest month, Trump Tower is "Off the Strip"...nor is there any draw to visit it. I don't gamble, but I like going for the atmosphere. We're going to see WOW at the Rio, an off strip casino...Trump's tower has no shows. We are going to go to Carlos and Charlies for four hours due to a groupon....Trump doesn't have this. We are also using groupon and other discounts for a couple of buffets and museums...and of course, Trump doesn't offer anything.

In fact, his tower doesn't offer anything to visit it...nor do they have the proper area for entertainment.

So...hence, no one spends significant money there. His tweets are simplistic, so is his economics and marketing. He can't think in the long term.

[dumbcat]

14. Trump International Hotel Las Vegas has never had a casino

What you called Trump Tower Las Vegas was never intended to have a casino or shows. It is a hotel and condo unit. It was always marketed as such. Construction was completed just in time for the 2008 recession and many of the prospective buyers couldn't come up with mortgage money. So yeah, bad market timing and mismanagement. It lost money big time, but it was in sales and hotel stays, not in gambling and entertainment.

[Xolodno]

15. Learned something new.

I believe City Center has a similar concept. But no gambling? What a dumb ass. Smart not to make it your main source of revenue...but not smart to exclude it. Should have kept the Frontier running.

[jmowreader]

20. I'm not really up on the Las Vegas hotel market...

...but it seems to me that a Vegas property is almost required to have a gaming floor and an entertainment complex if it wants to draw in the travel crowd.

[dumbcat]

23. Me either, but I don't think Trump is all that concerned

with the travel crowd. His hotels target the high end customers. They can afford to go elsewhere for entertainment, and probably like the Trump Hotel for it's opulence. And I don't know the ratio of hotel rooms to condos and time shares, but they also probably don't care that much about gambling and entertainment.

When I grow up and become a Las Vegas Real Estate Developer, I'll have a better handle on it.

[dem4decades]

26. We did groupon for the Mob Museum. While there I thought of Trump because the mobsters called

informants "rats". Just like our boy Trump. I wish I had watched the movie Casino before I went, didn't realize the mob was still there in the 1970's. The guy taking the tickets was some old mobster from that era.

Also got tickets for the Eiffel Tower, went at night and watched the Bellagio light show.

[TheFarseer]

18. But

They were leveraged so much the interest payments killed the profits. Also his casinos cannibalized each other. Also he spent the money on luxuries for himself instead of the business. Although I must say I totally think he was laundering money.

[Roland99]

19. He was borrowing at very high interest rates and had borrowed a LOT

He couldn’t pay the debt

[Recursion]

3. "and had an embezzlement issue"

That's what I'm saying.

Even the one that was "too remote" is sketchy -- people will drive for days to these things

[wellst0nev0ter]

5. The money lost was net operating loss

meaning it's the money lost directly from his core business operations. They don't involve one-time payouts, depreciations, losses or windfalls or whatever.

[brush]

6. He lost plenty, most of it the banks money, which is why he had to turn to the Russians.

Last edited Sun May 12, 2019, 10:08 AM - Edit history (1)

The banks wouldn't loan him anymore after not getting their investments back. It cost big money to build casinos, buy an airline and all the other failed business he left in his loser tracks.

Hell, in Atlantic City he was so stupid he had multiple casinos competing against each other. He/the banks lost money on all of them.

No doubt money was laundered through them but he always over spent on his deals. He bought the Plaza Hotel, a crown jewel in NYC, but he paid way too much for it. It was reported that if the hotel had been booked full every night of the month at prime rates it still wasn't enough to pay the mortgage.

Oh yeah. He lost plenty of other peoples money because he was a piss pour businessman who didn't know what the fuck he was doing. He was all image, no substance.

[Rollo]

7. Well put!

[Lucky Luciano]

8. You can definitely lose with a casino if you borrowed too much money to run the business. nt

[jmowreader]

9. If anyone could go broke running a casino, it's Trump

Please remember that this is the same asshole who went broke selling bottled water, vodka and meat.

The reality of the situation is Trump sucks at business. Girl Scouts selling cookies for their first time ever have a better grasp on the business world than Donald Trump does.

No, I figure what really happened is Trump overspent on things like decor and comps in an attempt to lure whales to his casinos, and they didn't come. Trump would do that shit.

I find it slightly hard to believe Trump would choose to launder money through his casino operation (and risk getting caught by the Casino Control Commission) rather than the comparatively-unregulated real estate business.

[hughee99]

16. Casinos going bankrupt isn't really that uncommon, especially

When it’s the person who built it. The construction for some of these lavish structures causes a debt that can be very difficult to overcome.

https://vegasclick.com/casinos/profits

[StickWithLove]

10. The real story

Doesn’t make Trump look good. But embezzlement is not what took place. The casinos failed because the model Trump used was heavily debt based. AC casinos were all hit with huge losses when neighboring states legalized slot machines and some table gaming. Because Trump’s model for the casinos was to make them “wonders of the world” they were very expensive to build and maintain compared to other less opulent casinos in AC. When all of casinos took a 50% hit because of cross state competition, Trumps were the most vulnerable because of the expense required but most mainly because his model was to borrow the money to build the casinos rather than build them using his own capital. So when you borrow money, you need to pay back the principal and the interest. The interest payments are what sunk the casinos. If Trump had invested more of his own capital in the casinos rather than going so debt heavy they may have been able to survive the gigantic hit all casinos on the boardwalk took when nearby states legalized forms of gambling. The casino made money in that the house always wins - but not enough to keep up with the interest payments due to the debt heavy model

[no_hypocrisy]

12. Not to forget that Trump was competing against himself in AC. Not a monopoly.

Trump had Trump Palace, Trump Castle, and the Taj Mahal, each casino competing for a finite pool of gamblers. He diluted his customer base.

[StickWithLove]

13. That too!

Yes, indeed, that wasn’t too savvy of a move

[Efilroft Sul]

17. Welcome to Democratic Underground, SWL.

Good first post above.

[StickWithLove]

22. Thank you

For the welcome and kind words

[PatrickforO]

24. Interesting post. Thank you.

And welcome to DU.

[miyazaki]

21. Ceasars Group was in debt for over twenty billion

After bankruptcy court, maybe only ten or twelve billion now.

[Kid Berwyn]

25. Excellent avenue for investigation in Congress.

Congress awaits his tax forms from Mnuchin.

By Friday or it’s impeachment.

[spooky3]

28. I hope it's fines and jail for Mnuchin. Nt

[happybird]

27. Back in 2016

I remember reading about how his father/father's associates would "loan" him money by purchasing a million or two in chips and never cashing them in. This supposedly happened several times.

Wish I could find the article. IIRC, it was in a long piece detailing the fall of the casino and all the contractors he ripped off.

[lindysalsagal]

29. Revealing taxes will reveal his laundering scam

It's the proof. He'll do anything to avoid that.

[customerserviceguy]

30. Real estate depreciation

probably made up for most of Trump's "losses". You depreciate a building over a 15 or 18 year "life", then when you sell it, you pay only capital gains tax on the part that corresponds to straight-line depreciation, only paying a full recapture tax on the part of the depreciation in excess of that straight-line amount. Buy a big, fat-ass building on credit, and your depreciation losses vastly exceed the amount of principal you're paying on the loan. And all the interest is tax-deductible, too, as well as taxes and operating expenses.

When I took tax classes back in 1980, I realized that this was one of the biggest loopholes in the world. To the best of my knowledge, it still exists.

[Initech]

31. Maybe this is why he's so afraid of getting caught?