Question of the Day - 30 March 2021

Well, it's impossible to keep politics out of this answer, but we'll try to be as non-controversial as possible, as is our wont. 

First, the back story. Former President Donald Trump's son Eric floated the idea a few weeks ago that the Trump National Doral golf club would be a good place for a casino. That's the extent of it. No bill has been introduced in the Florida Legislature and no other visible signs point to any movement in that direction. However, the Washington Post reported that "behind-the-scenes discussions have included a measure that could allow gambling" at Doral. 

How likely is it to happen? Things can always change, but as of this writing, we'd lay 8-5 against. It's true that the Trumps can exercise considerable political muscle in Florida, where the governor, Ron DeSantis, is a close ally of the former president and Republicans control the legislature. 

On the other hand, it would be a pretty bold move by the legislature. The proposal, as reported by the Post, "would allow gambling licenses to be transferred to properties where betting isn’t presently allowed and prohibit local governments from intervening."

In order for that to happen, legislators would have to repudiate a number of interest groups. First, gambling in Florida is limited to tribal casinos and pari-mutuels (which include horse tracks and jai-alai frontons), and Florida residents haven't shown any inclination to change that. Also, the existing gambling interests, primarily the powerful and deep-pocketed Seminoles Tribe, have been fighting an expansion of gambling for many years and via many millions of dollars; the Seminoles operate six of the state’s seven tribal casinos. Another fierce opponent has been Disney, which has also spent untold sums on keeping commercial casinos out of the Sunshine State.

We should note, though, that since Disney bought ESPN in 1996 for $19 billion, it has been less vocal about opposing gambling, especially sports betting. That said, only a few years ago in 2018, Disney and the Seminoles bankrolled the passage of Amendment 3, which changed the state constitution. Casino-style gambling cannot be expanded outside tribal lands unless it is approved by 60% or more of the state's voters.

Finally, prohibiting local jurisdictions from intervening would be sure to initiate more lawsuits than Cleopatra launched sailing ships. Indeed, as reported by the Fort Lauderdale Sun-Sentinel, "Miami Beach is gearing up for a fight. The City Commission is taking up a proposal to hire an outside lawyer to challenge any effort by the Florida Legislature to permit casino gambling in its city or Miami-Dade County."

As for the financing, this part of the answer is a little more sensitive, but we will say this. From what we can gather via mainstream sources, we believe that the Trump Organization would be hard-pressed to fund any such project out of its own cash flow. That's not Donald Trump's style anyway. And given the Trumps' reportedly precarious debt situation, it seems likely it would be difficult for their company to arrange for large enough loans from the credit markets.

Of course, private capital is always a possibility. The problem with that would be Donald Trump's history with casino gambling. His Trump Entertainment Resorts, owner of the Trump casinos in Atlantic City, filed for Chapter 11 bankruptcy reorganization four times between 1991 and 2014 (Carl Icahn now controls it). 

Forgive us for ending this QoD with the following quote, but we consider it a pretty good benchmark for the possibility of a new Trump commercial casino in Florida. It was written in a commentary by CDC Gaming Reports' executive editor and long-time gambling business reporter Howard Stutz.

"Based on Trump’s gaming-industry track record, the only group excited by news reports that he may be eyeing a casino for his struggling Trump National Doral golf club near Miami could be bankruptcy lawyers."