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Gaming Guru

Joe Weinert
 

Atlantic City Round-Up

4 February 2003

Donald Trump's casino company boosted its revenues and boosted its cash flow but still came up with another quarterly loss at the bottom line.

Trump Hotels & Casino Resorts reported a net loss of $17.3 million, or 78 cents per share, due primarily to the writeoff of $14.6 million in unused Casino Reinvestment Development Authority credits. Its net loss for the year-earlier quarter was $10.2 million, or 46 cents per share.

Its operating performance rose slightly. Cash flow improved 2 percent, to a record $64 million, on net revenue of $283.1 million, up 1 percent.

For the full year, Trump Hotels reported cash flow of $321.6 million, up 19, percent, on net revenue of $1.2 billion, up 4 percent.

"That's $51.4 million higher than last year and also makes our company one of the largest gaming companies in the United States," Trump said.

Trump Hotels lost $12 million for the year, putting its gross loss since its 1995 inception at $358 million. It has never reported an annual net profit.

Trump confirmed that his company is trying to develop a casino in suburban Chicago. "We're looking at certain markets. Not only Chicago, but in a lot of other places," he said.

Trump Hotels this week begins the crux of its road show to sell $475 million in bonds, which would be used to retire debt.

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The trade group representing Atlantic City's casinos claims that proposed equal-opportunity employment rules proposed by state regulators are unconstitutional.

Philadelphia lawyer William Brown III, representing the Casino Association of New Jersey, told the Casino Control Commission at a special hearing that its affirmative-action plan "cannot survive strict scrutiny." It's flawed, Brown said, because it does not right any past wrong, creates preferences by race and gender, and is "constitutionally overbroad."

A federal appeals court first struck down the commission's affirmative-action plan three years ago. The agency has been trying since to draft equal-opportunity rules that would pass constitutional muster.

The commission's proposal would require casino job categories to match -- within 20 percent -- the regional labor pool by gender and race or ethnicity.

Atlantic City businessman John Lyles-Belton, an official with the local National Association for the Advancement of Colored People branch, claimed the proposed rule is toothless. Casinos would get only a "slap on the wrist" if they failed to comply, he charged.

Local 54 of the Hotel Employees and Restaurant Employees International Union, which represents more than 14,000 casino workers, supports the commission's proposal. "They guarantee a measure to gauge the accuracy of the casino licensee's obligation," President Bob McDevitt said.

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New Jersey Gov. James McGreevey is again floating the possibility of installing slot machines at three racetracks in the northern part of the state, a prospect that worries Atlantic City casino operators.

McGreevey had abandoned the idea just two weeks ago but now members of his administration say "everything is on the table" to help close a $5 billion state budget gap.

McGreevey has offered no specifics. He intends to unveil his budget proposal this week.

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Wally Barr didn't have to look far -- just down the hall, in fact -- to find a new general counsel for Park Place Entertainment.

Bernie DeLury, who has worked out of Bally's Atlantic City for 13 years, replaced Kim Sinatra as the company's top lawyer. Sinatra resigned for personal reasons, Park Place said. She was hired as deputy general counsel shortly after Thomas Gallagher became CEO and leaves just 2.5 months after he was asked to resign.

DeLury, 42, is a one-time seminary student and U.S. Navy Commander who began his gaming-law career at Bally's in 1990. He has played an increasingly bigger role as Park Place has become bigger and most recently was responsible for the legal affairs of the company's Eastern casinos.

DeLury has long worked closely with Barr, who even upon becoming chief executive last fall has maintained office at Bally's Atlantic City.

"I'm really grateful to Wally and the years of friendship and support he's given me," DeLury said. "I've learned a lot from him. He's showed me a lot about the business and I look forward to continuing to work with him."

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Harry D'Ascenzo didn't seem to mind being called a mobster and a criminal of all sorts, nor did he seem to mind being barred from setting foot inside any Atlantic City casino hotel.

He was angry, however, that the Casino Control Commission made sure his exclusion also barred him from parking at the Trump Taj Mahal garage. D'Ascenzo, 77, lives in an apartment building surrounded by Taj property and pays the $2 fee to park at the casino's garage because his designated lot usually is full.

"I think they're pretty sick," he said. "I don't see no reason why they did that."

(Joe Weinert covers the gaming industry for The Press of Atlantic City. He can be reached at jweinert@pressofac.com.)