This article is an excerpt from the Shortform book guide to "The Art of the Deal" by Donald J. Trump. Shortform has the world's best summaries and analyses of books you should be reading.
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How did Donald Trump start his casino business? Where was the first casino Trump opened? What made it a success?
Trump’s casino business started off with buying off the boardwalk site in Atlantic City, New Jersey. He already had the Trump Plaza on his resume and he used it to show his credibility and convince the landowners that he could give them a fair price and finish the project.
Keep reading for the story of Trump’s first casino.
Donald Trump’s Casino Business: How It All Started
Trump realized that no success he could achieve in hotels would compare with the profits a casino could bring in. So he visited Atlantic City.
At the time, New Jersey was preparing to vote on whether to legalize gaming in Atlantic City. Before the initiative had even passed, Atlantic City real estate values shot up.
Trump wasn’t willing to risk buying property in Atlantic City while the prices were hot and legalized gambling wasn’t a sure thing. If the gaming initiative failed, he’d lose his entire investment.
If the initiative did pass, Trump preferred to pay more with that certainty.—and he figured the cost would still be a drop in the bucket compared to his inevitable casino profits.
The referendum ultimately passed, but prices rose so high that Trump decided to continue holding out for a good deal. After about three years, he heard about a Boardwalk property that might be for sale.
By the time Trump considered buying, several factors caused the casino construction rush to cool off:
- Other casino projects had hit major obstacles, including building delays and rejected gaming licenses
- An FBI sting had revealed corruption among Atlantic City politicians and the state Casino Control Commission
- It appeared that gaming in Atlantic City might turn out to be more seasonal than expected, and that there might only be enough business to support a few casinos
In Trump’s view, Atlantic City’s struggles could help him secure a great deal.
Others had already attempted to develop the boardwalk site Trump was eyeing, so he’d have to deal with:
- Multiple parcels with different owners, including investment groups and families who owned homes on the land
- Disputes over purchase options
- Lawsuits about past agreements for multiple landowners to jointly lease or sell the land
Real estate professionals advised him to avoid such a convoluted project, but again, he felt the property’s issues would help him secure a better deal.
With Trump Tower on his resume, he played off his credibility. He assured the owners that he could give them a fair offer and that he’d finish the casino. Trump also leveraged the fact that the owners might not get any other offers because no developer wanted to take on this project. After a long negotiation, Trump secured all the pieces of the Boardwalk site.
Trump’s Bargaining Chip
The fact that casino construction had stalled in Atlantic City worked in Trump’s favor, since state officials would be eager to have a successful casino up and running. However, that was still no guarantee that Trump’s gaming application would be approved, or that he’d get the decision anytime soon (it was a notoriously slow process).
Trump met with New Jersey’s attorney general and pointed out that he’d already invested millions in the Boardwalk site and made it clear that, while Trump was excited by the prospect of building in Atlantic City, he was prepared to walk away. Specifically, Trump told the attorney general he refused to start building until his license was approved, and he wasn’t willing to wait more than six months for the decision.
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Here's what you'll find in our full The Art of the Deal summary :
- What Donald Trump says about his early life before the White House
- The 11 principles Trump says guided his business decisions
- How the West Side rail yards project proved to be a challenge for Trump
