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In reply to the discussion: Trump didn't "lose" a billion dollars over 10 years, he laundered it [View all]StickWithLove
(3 posts)Doesnt 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 Trumps 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