Tuesday, September
28, 2004 BY BETH FITZGERALD
Star-Ledger Staff
An obscure
offshore Internet gambling company yesterday proposed spending $400 million
for a 31 percent stake in Donald Trump's casino company, which is regrouping
following the collapse last week of an unrelated bailout deal.
Trump, the
chairman and chief executive of Trump Hotels and Casino Resorts, said
yesterday he hadn't seen the offer from Casino Fortune, a private company
that claims 2 million online gambling customers in the United States as
well as land-based casinos in the Caribbean, Europe, Asia and Africa.
"I have
not seen anything from them. I know nothing about it, and so obviously,
we can't comment," Trump said.
Trump's casino
company, which owns three of the 12 casinos in Atlantic City, is struggling
to keep up the interest payments on $1.8 billion in debt. In August, Trump
announced a plan to restructure the company with fresh investment from
DLJ Merchant Banking, a private equity group affiliated with Credit Suisse
First Boston. The casino company agreed to enter Chapter 11 bankruptcy
protection in order to complete the restructuring.
Last week,
however, Trump and DLJ issued a statement saying the deal had been canceled.
Casino Fortune,
based in Trinidad, said yesterday it hopes to open negotiations with the
Trump organization, and figures its offer of a $400 million investment
for a 31 percent stake should be attractive. DLJ had proposed investing
$400 million for a 55 percent stake.
"Right
now, we are just declaring our interest," said Dennis Rose, senior
vice president and general manager of Casino Fortune. "This is a
preliminary contact we are making, and I hope we will be able to put some
meat on the bones of a deal."
But Casino
Fortune faces a critical legal hurdle, since Internet gambling is illegal
in the United States, said Tom Auriemma, director of the state Division
of Gaming Enforcement.
"Offshore
companies are taking bets illegally from U.S. citizens," Auriemma
said.
Casino Fortune
would need to be investigated and licensed before buying a piece of Trump's
casino company. "Any online company that operated in what we would
think was an unlawful situation certainly would be subjected to intense
scrutiny if they applied for licensure in New Jersey," Auriemma said.
Casino Fortunes'
spokesperson said the company might be willing to give up its
online gambling operations in order to do a deal with Trump.
"This
is a matter of government regulation not keeping pace with technology;
sooner rather than later, online gaming will be sanctioned by state and
local governments," he said. "But if we have to sell off our
Internet gaming business in order to work with the Trump organization,
then it would be worthwhile to take a small step backward in order to
take a giant step forward."
Casino Fortune
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