Hard Rock Hotel & Casino Atlantic City

Based on Wikipedia: Hard Rock Hotel & Casino Atlantic City

In 2015, a casino on the Atlantic City boardwalk admitted to willfully violating anti-money laundering laws for years. The fine was ten million dollars—the largest penalty the United States federal government had ever levied against a casino. Federal investigators had been tracking the place since the 1990s, when it became the preferred gambling destination for Russian mobsters living in Brooklyn. A Senate report had already linked the property to Asian organized crime syndicates involved in murder, extortion, and heroin smuggling.

The casino was called the Trump Taj Mahal.

This is the story of one of America's most troubled gambling palaces—a billion-dollar monument to excess that went bankrupt within a year of opening, attracted organized crime from multiple continents, hosted the nation's first in-casino strip club, and ultimately became a Hard Rock Hotel.

The Eighth Wonder of the World

The building that would become the Taj Mahal started construction in 1983, years before Donald Trump got involved. Resorts International, which owned the neighboring Resorts Casino Hotel, broke ground with an estimated budget of 250 million dollars. The company's head, James Crosby, floated the idea of naming it the United States Hotel, after Atlantic City's first major hotel from a bygone era.

Crosby died in April 1986.

His heirs found themselves owners of an unfinished construction project they had no idea how to complete. The Taj Mahal had already encountered serious problems, and the family doubted their ability to see it through. The property became a takeover target.

Donald Trump, who already owned two Atlantic City casinos, outbid several competitors to purchase a controlling stake in Resorts International for 79 million dollars in July 1987. He was appointed chairman of the company and announced he would finish the Taj Mahal in about a year.

There was a problem. New Jersey law prohibited anyone from owning more than three casinos. Trump's solution was to close the original Resorts casino and convert it into a hotel annex for the Taj Mahal—essentially a workaround that kept him technically within the law while consolidating his gambling empire.

But the budget had exploded. What started as a 250 million dollar project had ballooned to 930 million. Resorts needed to raise 550 million dollars just to finish construction, and struggled to find anyone willing to provide the financing. By early 1988, the company was claiming to be near bankruptcy.

Trump made his move. He offered to buy all outstanding stock for 22 dollars a share, stating he was willing to personally finance the construction—but only if he owned the entire company.

Then Merv Griffin showed up.

The television producer—host of his own talk show and creator of both Jeopardy! and Wheel of Fortune—made an unexpected offer to purchase Resorts International for 35 dollars a share. What followed was a highly publicized takeover battle, with Trump and Griffin filing lawsuits against each other. The spectacle played out in newspapers and on television, two larger-than-life personalities fighting over a half-built casino shaped like an Indian palace.

They eventually settled in November 1988. Griffin purchased Resorts International. Trump purchased just the Taj Mahal for 273 million dollars.

To finance the purchase and completion of the casino, Trump raised 675 million dollars, primarily through junk bonds carrying a 14 percent interest rate. Junk bonds, for those unfamiliar with the term, are high-yield bonds rated below investment grade—they offer attractive returns precisely because they're risky. The companies issuing them are more likely to default. Investors accept this risk in exchange for higher interest payments.

The Taj Mahal opened on April 2, 1990, with 120,000 square feet of gaming space. It claimed to be the largest casino in the world, though the Riviera in Las Vegas disputed this. Trump billed it as "the eighth wonder of the world." An elaborate grand opening ceremony was held three days later.

Within eighteen months, it was on the verge of bankruptcy.

The House Always Wins (Except When It Doesn't)

In 1991—barely a year after opening—the Taj Mahal went through what's called a prepackaged bankruptcy. This is a type of bankruptcy where the debtor and creditors negotiate the terms before filing, making the process faster and less chaotic. Trump gave up a 50 percent stake in the business to bondholders in exchange for lowered interest rates and a longer payoff schedule.

The fourteen percent interest on those junk bonds had proven unsustainable. The eighth wonder of the world couldn't generate enough money to service its debt.

Despite this rocky start, the Taj Mahal continued operating throughout the 1990s as the world's largest, most flamboyant casino. Trump took on an enormous amount of debt to keep it running. In 1996, his new publicly traded company, Trump Hotels and Casino Resorts, purchased the Taj Mahal in a transaction that valued the property at 890 million dollars.

The casino was a draw for high rollers, which is a polite way of saying rich gamblers. Among these high rollers were some concerning characters.

Organized Crime and Money Laundering

Federal investigators who tracked organized crime in New York City noted something interesting in the early 1990s: the Trump Taj Mahal had become the preferred gambling spot for Russian mobsters living in Brooklyn. This wasn't a casual observation. It was documented by law enforcement agencies monitoring organized crime activity.

Meanwhile, a 218-page Senate subcommittee report released in 1992, titled "Asian Organized Crime: The New International Criminal," linked Trump's businesses to Asian organized crime networks. The report named Danny Sau Keung Leung, who served as the Trump Taj Mahal's vice president of foreign marketing, as an associate of 14K Triad—a Hong Kong-based organized crime group connected to murders, extortions, and heroin smuggling.

Triads are Chinese transnational organized crime syndicates. The 14K Triad, specifically, was founded in 1945 and became one of the largest criminal organizations in the world, with tens of thousands of members across Asia, Europe, and the Americas. Being identified as an associate of such a group is not a casual accusation.

Canadian police had identified Leung as a major player in Toronto organized crime back in 1984. Yet in 1989, the New Jersey Casino Control Commission granted him a "key license"—a credential reserved for casino executives. He began working for the Trump Taj Mahal when it opened in 1990.

At a Casino Control Commission hearing in 1994, Trump sent the Taj's president, Dennis Gomes, to testify on Leung's behalf. Despite objections from the Division of Gaming Enforcement and testimony from Canadian police about Leung's criminal associations, his casino key license was renewed. His lawyer called the criminal allegations "absolutely untrue."

Leung worked at the Taj Mahal from 1990 to 1995, then returned in 2000 and stayed until 2013, when he requested to be placed on the Casino Key Employee Inactive List rather than go through the license resubmission process.

The Senate report documented other connections too. Crime bosses who ran the Chinatown bus system organized trips to Trump businesses in Atlantic City. People with links to organized crime booked shows at Trump venues. In 1987, one was indicted for providing kickbacks to executives at Trump Castle, another Trump-owned Atlantic City casino.

The Bank Secrecy Act Violations

Casinos are required by federal law to report certain transactions. The Bank Secrecy Act, passed in 1970, requires financial institutions—including casinos—to maintain records and file reports on transactions that might be useful for investigating money laundering, tax evasion, and other financial crimes. If someone walks into a casino with a suitcase full of cash, there are forms that need to be filled out.

The Trump Taj Mahal had problems with these requirements.

In 1998, the Treasury Department's Financial Crimes Enforcement Network—usually called FinCEN—announced that Trump Taj Mahal Associates had paid a civil penalty of $477,000 for failing to file required reports under the Bank Secrecy Act.

This did not solve the problem.

There were violations again in 2003. And in 2010. And in 2012. The company was, according to Treasury records, "repeatedly warned."

In February 2015, FinCEN settled another investigation with the assessment of a ten million dollar civil fine—the largest penalty ever levied against a casino by the federal government. The violations were described as "significant and long-standing," "willful and repeated." The casino admitted to multiple violations as part of its settlement and agreed to periodic external audits.

The Treasury's press release stated that the Trump Taj Mahal was "far from meeting" the standards required to protect the United States financial system "from exploitation from criminals, terrorists, and other bad actors."

According to National Public Radio's business correspondent Jim Zarroli, over its years of operation from 1990 to 2016, the Trump Taj Mahal was "repeatedly cited for having inadequate money-laundering controls." He noted this was "not an unusual charge in the gaming business"—but the scale and persistence of the Taj Mahal's violations were exceptional.

The Slow Collapse

The Taj Mahal was the highest-grossing casino in Atlantic City until 2003, when the Borgata opened and took that crown. In 2008, the Chairman Tower opened, bringing the complex to over 2,000 rooms. In 2013, the Taj opened the nation's first in-casino strip club, featuring scantily clad dancers—a venue called Scores, which would operate until January 2020.

But Atlantic City was struggling. The regional monopoly on East Coast gambling that had made the city profitable was eroding as neighboring states legalized casinos. Competition from Pennsylvania, New York, and elsewhere was bleeding revenue from the boardwalk.

Trump Entertainment Resorts filed for bankruptcy on September 10, 2014, and announced plans to close the Taj Mahal on November 13 if the casino couldn't get concessions from its unions. A sister property, Trump Plaza, did close in 2014. At that point, four of twelve Atlantic City casinos had already shut down. The Taj Mahal would have been the fifth.

Workers marched to Mayor Don Guardian's office on November 3, 2014, asking him to reconsider granting concessions. About a thousand employees signed a petition calling on officials "to do everything possible" to keep the casino open.

In bankruptcy court filings, Trump Entertainment Resorts announced a shutdown date of December 12, 2014, later pushed back to December 20. On December 18—two days before the scheduled closure—the labor union UNITE HERE reached a deal with the company that saved the Taj from closing. The same day, billionaire Carl Icahn committed 20 million dollars in financing.

Icahn, for context, is one of Wall Street's most famous corporate raiders. He built his fortune through hostile takeovers, buying stakes in companies he considered undervalued or poorly managed, then pressuring them to change. His involvement in the Taj Mahal was part of a pattern of investments in distressed assets.

In February 2016, Trump Entertainment Resorts exited bankruptcy and became a subsidiary of Icahn Enterprises. The casino kept the name "Trump Taj Mahal," though Donald Trump no longer held any ownership stake. Another Icahn affiliate, Tropicana Entertainment, took over management.

But the drama wasn't over.

The Strike and the Shutdown

The company announced in November 2014 that the casino would shut down unless its main union dropped an appeal of a court-ordered cost-savings package. This package had effectively cancelled workers' health insurance and pension coverage. However, it was later revealed that the real reason for the threatened closure was that the company hadn't received the state and local tax breaks it was seeking.

UNITE HERE, the union representing casino workers, went on strike. Workers walked picket lines on the boardwalk, demanding restoration of their benefits.

On Monday, October 10, 2016, the Trump Taj Mahal Hotel and Casino shut down amidst the chaos of striking workers. The Hard Rock Cafe restaurant inside the property remained open—a curious detail that would prove significant.

After the closing, a UNITE HERE leader raised the possibility that the casino would remain closed over the winter but reopen in spring 2017 as a non-union facility—an attempt, he said, that would prompt a union boycott.

That's not what happened.

Hard Rock Rising

On March 1, 2017, the Seminole Tribe of Florida—through its Hard Rock International brand—along with the Morris and Jingoli families, announced the purchase of the facility for conversion to the Hard Rock Hotel and Casino brand.

This was a remarkable turn. The Seminole Tribe of Florida had purchased Hard Rock International back in 2007 for 965 million dollars, making it the first Native American tribe to acquire a major international company. The tribe operates casinos on its Florida reservations and, through Hard Rock, owns hotels, casinos, and cafes around the world.

Hard Rock announced plans to spend 300 million dollars purchasing and renovating the resort.

The Hard Rock Hotel and Casino Atlantic City opened on June 27, 2018—a day earlier than planned. The Mark Grossinger Etess Arena, a performance venue at the resort, retained its name. It honors a Trump Organization executive who was responsible for conducting boxing matches in Atlantic City and was killed in an October 1989 helicopter crash, before the original casino even opened.

The rechristened casino has had its own union tensions. In June 2022, UNITE HERE members voted overwhelmingly in favor of a strike if their demands weren't met by July 3. They wanted wage increases to cover financial setbacks from the pandemic and rising living costs.

Violence on the Property

The Taj Mahal's history includes several violent incidents that underscore the sometimes dangerous atmosphere of casino culture.

On May 27, 2009, Ray Kot, a casino supervisor, was shot and killed while working. His killer was Mark Magee of Norristown, Pennsylvania, who claimed he killed Kot because "all casinos cheat gamblers." Magee was sentenced to 30 years without parole. A memorial park was dedicated in Kot's honor.

On September 18, 2011, a man was shot dead and a woman wounded during an apparent carjacking in the casino's parking garage. The victims, 28-year-old Sunil Rattu and 24-year-old Radha Ghetia, were held up as they left the casino and forced to drive to a nearby alley. Rattu was killed. Ghetia was shot in the upper body but survived. Three Camden men were arrested days later; two admitted to the crime and received sentences of 40 and 47 years respectively.

On March 24, 2016, three teenagers attending a party in a hotel room on the forty-seventh floor were shot. Seven suspects were arrested. The incident was described as gang-related.

What the Taj Mahal Tells Us

The Trump Taj Mahal story contains multitudes: the excesses of 1980s finance, the vulnerability of casinos to organized crime, the boom and bust cycles of Atlantic City, the tensions between labor and capital, and the strange afterlives of branded properties.

It opened claiming to be the eighth wonder of the world and went bankrupt within eighteen months. It attracted mobsters from Brooklyn and crime syndicates from Hong Kong. It violated federal money laundering laws for years, paid millions in fines, and violated them again. It employed a vice president of foreign marketing whom Canadian police had identified as a major organized crime figure, and when law enforcement objected, the casino's president testified on his behalf.

When it finally closed in 2016, it wasn't because of any of these scandals. It was because the workers wanted health insurance, and the company wanted tax breaks, and neither side would give in.

Now it's a Hard Rock Hotel, owned by the Seminole Tribe of Florida, which bought the Hard Rock brand from its British founders and turned an international restaurant chain into a global gaming empire. The building still stands on the Atlantic City boardwalk, its shape still vaguely reminiscent of the Taj Mahal in Agra, India—the seventeenth-century mausoleum that Shah Jahan built for his favorite wife.

That original Taj Mahal, the real one, took twenty years to build and employed twenty thousand workers. It's considered one of the finest examples of Mughal architecture, combining elements from Islamic, Persian, and Indian styles. It's a UNESCO World Heritage Site, visited by millions of tourists each year.

The Atlantic City version, with its onion domes and minarets, was always a copy of a copy—a casino themed after a tomb, built on junk bonds and operated by a succession of owners who couldn't quite make the numbers work. Its most lasting legacy might be the ten-million-dollar fine that proved casinos could be held accountable for looking the other way while dirty money flowed through their slot machines and across their gaming tables.

The house doesn't always win. But someone usually does.