Analysts Doubt Rule Will Slow Trump’s Plans
At least one casino industry observer believes that Donald J. Trump was unfairly condemned when state regulators restricted his future investments in competing gaming companies.
But other gaming analysts predicted Tuesday that Trump will not be frustrated by the restriction, part of a stipulation imposed Monday at Trump’s casino re-licensing hearing.
In the stipulation, Trump agreed that neither he nor his affiliates would acquire directly or indirectly any securities of any holding or intermediary company with a New Jersey casino without the prior approval of the commission.
The stipulation affects future acquisitions and does not affect Trump’s proposed purchase of Elsinore’s Atlantis Casino Hotel, which the billionaire developer has proposed converting into a luxury hotel.
“He’s making a nice cash flow on his investments in Atlantic City. I don’t see why he would ever want to leave,” said Harold Vogel, an analyst with Merrill Lynch in New York.
Vogel said, however, that the state Casino Control Commission’s restriction might frustrate Trump’s interest in developing gaming halls in Nevada.
“If he wanted to make a run at Caesars World out there, for instance, and he’s not permitted to buy stock here, it might affect his future in Las Vegas,” he said.
Marvin Roffman, a gaming analyst with the Philadelphia investment firm of Janney Montgomery Scott Inc., said Trump probably already has as much as he wants in Atlantic City. He already owns Trump Plaza and Trump Castle casino hotels, and once he completes the massive Taj Mahal casino project, he will control 31.4% of the resort’s gaming space, he said. Under state law, no one can own more than three casinos.
Called a ‘Disgrace’
But Roffman said the commission’s restrictions on Trump’s investments in other casino companies “was a disgrace. It was a closed-door kind of thing where the commissioners said, ‘We think you’re dominating the Atlantic City skyline and we won’t license you unless you make the following pledge.’
“This should have been subject to a formal hearing and aired in public,” Roffman said. “You just don’t condemn a guy without an open hearing.”
Saul Leonard, a gaming analyst for Laventhol & Horwath of Philadelphia, said Trump knows he must bare his soul when appearing before the commission for his casino license renewal.
“The casino license is a privilege, not a right,” Leonard said.