An Internet casino operator said it is offering Donald Trump $400 million for a stake in his ailing casino company.
Casino Fortune, a Trinidad-based company, said Tuesday it has approached Trump about replacing DLJ Merchant Banking Partners, whose plans for a bailout of Trump Hotels & Casino Resorts Inc. fell through last week.
Trump didn't return calls seeking comment Tuesday. Executive vice president Scott Butera said the company had been contacted by Casino Fortune but would not say whether the offer was being considered.
"We've received a correspondence, but I don't have any comment about Casino Fortune," Butera said.
Officials at Casino Fortune, which bills itself as the world's oldest online gambling company, acknowledged Tuesday that they had never spoken to Trump officials about the offer, which they said was made in hand-delivered letters over the weekend.
But the bid, which Casino Fortune estimates would give it a 31 percent share in Trump Hotels, is legitimate, said vice president Dennis Rose.
"We find the guy so vibrant, such an exciting character. If there's a rescue possible, we'd like to be part of it," he said in a telephone interview from Port of Spain, Trinidad.
Trump's troubles
The Indiana Gaming Commission has told Trump executives to appear before the panel on Oct. 1 in Indianapolis to answer questions about the company's financing. The company was awarded the bid to build a casino in French Lick, and it runs a riverboat in Gary.
Commission members said they need more information to determine if they want Trump to continue as the French Lick casino operator.
The commission voted 4-2 in July to give the casino contract to Trump, but it remains unsigned. Negotiations were expected to finish in October. But state law gives the commission the option of choosing another developer if it cannot come to terms with Trump.
In separate letters to Trump and Trump Hotels chief financial officer Francis X. McCarthy, Rose said Casino Fortune was "prepared to immediately enter into a dialogue regarding financial relief for Trump Hotels & Casino Resorts."
Trump, who runs the Trump Taj Mahal, Trump Plaza and Trump Marina casinos in Atlantic City, has fallen on hard times even as his public persona soars on the wings of "The Apprentice," his reality TV show.
Trump Hotels holds $1.8 billion in debt and spends so much money on interest payments it has not been able to invest in improving its casino properties, which face stiff competition.
DLJ Merchant Banking Partners, a private equity arm of investment bank Credit Suisse First Boston, had been negotiating for a stake in Trump Hotels, offering $400 million in exchange for a controlling interest. Under the deal, Trump would have given up his majority stake and his title as CEO.
Bid may be a publicity stunt
Casino Fortune, which runs eight casinos in the Caribbean, Africa and Europe, is making the bid because it wants a land-based casino in the United States to add to its credibility, Rose said.
The company is privately held; officials would not give financial information about revenues, holdings or assets.
Internet gambling, playing blackjack, poker and other games on a computer, using a credit card, is currently illegal in the United States. In 2001, New Jersey casino regulators filed suit against 10 alleged Internet gambling operators it said had been taking bets from state residents.
Thomas Auriemma, director of the New Jersey Division of Gaming Enforcement, said any company acquiring 5 percent of more of a public casino company operating in New Jersey would have to submit to licensure investigation.
"I have no idea if the thing is sincere or not," he said of Casino Fortune's offer. "If it is, we'll have to look at it. But certainly, the activities of that company in soliciting bets from Americans and New Jerseyans would be highly relevant," said Auriemma, whose agency enforces casino laws in New Jersey and presents findings to the state Casino Control Commission.
The company may just be out for publicity, said one industry observer.
"A lot of these Internet gaming companies go to extraordinary lengths to get publicity, whether it's putting a tattoo on a streaker at the Super Bowl or buying advertising space on Danny Bonaduce's back in celebrity boxing," said Joe Weinert, vice president of Spectrum Gaming Group, a casino consultancy. "They're very innovative that way."