I’m guessing it solved the cash flow problems; the chips are carried as a liability, and technically they are like cash because they can be cashed at any time. So yes, it was an interest-free loan in essence.
But the tax authorities would have to be in the unenviable position of arguing something that every visitor did on a regular basis, converting cash to chips, suddenly is illegal for one big spender.
There have been six elected American Presidents who did not previously serve as a state governor or a member of Congress.
Washington, Taylor, and Eisenhower were high-ranking generals who were primarily known for their military careers (and, of course, being a high-ranking general is as much a political position as any other).
Taft and Hoover were members of the Cabinet, and Taft was a governor, but an appointed one of the territory of the Philippines.
The sixth, John Adams was a delegate to the Continental Congress, an ambassador, and the Vice-President.
For someone to become a Presidential nominee without having ever held a political office before would be much more “surprising” than any prior candidate.
First of all, it was only 3 million, not 30 million. In any case, NJ has some very strict regulations about casino investors and about the source of their funds. The purpose of these regulations is to keep the mob from getting mixed up in casinos. The casino needed these funds immediately and couldn’t wait for the state to vet the source of his funds. So his father tried to skirt the regulations by buying chips instead.
Also, in case of a bankruptcy filing, the court generally allows the casino to continue operating and honor its old chips. This is similar to when Sears, for example, went bankrupt, but the stores were allowed to operate and Sears gift cards were still honored. Or like just about every major airline has gone bankrupt at least once, but still honored tickets previously issued. So, if the business blew up despite his efforts, ordinary creditors would be screwed, but Trump could still cash in his chips just like any regular gambler.
Which is funny, because he looks and acts a lot like an alcoholic.
Here’s an article summarizing what happened when Trump’s father sent an attorney to buy $3.5 million worth of chips at the Trump Castle Casino Resort in December 1990. The casino was fined $30,000 for doing this. There are laws about who can have a financial interest in a casino, so someone who makes a loan to one must be approved before the loan. Buying chips was an illegal way around this:
http://articles.philly.com/1991-04-09/news/25780577_1_casino-control-act-donald-trump-casino-owners
One definition of luck is ‘when preparation meets opportunity.’
Malcolm Gladwell’s Outliers is an interesting look at how successful people are predispositioned to be successful by virtue of initial conditions. He starts out by noting that a disproportionate number of pro hockey players are born at a certain time of the year, giving them an advantage in youth hockey leagues growing up. I don’t happen to buy his whole theory; for example, he claims that Bill Gates’s success was due to a unique opportunity to access computers at a young age, and some very fortuitous dealings with IBM regarding MS-DOS. But as many of you have said, not everyone recognizes the unique opportunities they have nor knows how to capitalize on them if they did.
However, when one’s success is due to financial dealings, much of that success can often be attributed to random factors that are out of anyone’s control. The book The Drunkard’s Walk: How Randomness Rules Our Lives looks at success of investment fund managers, for example. The apparent success of many don’t hold up to analysis over the long term; claims of success tend to cherry pick short-term victories. I have not studied Trump’s record in any detail but when your net worth is that volatile it doesn’t indicate a winner, IMHO.
That doesn’t really explain why it was judged illegal. As noted upthread, the transaction was of a type that most every casino customer makes every time they walk in.
An otherwise legitimate transaction can be illegal if its purpose was to further a nefarious scheme. New Jersey argued that Fred Trump’s purchase of casino chips was not for gambling but for making a loan to the casino while getting around NJ’s gaming regulations. Apparently they prevailed.
And it’s hard to classify him as a “nutcase”, instead of a jerkish egotist.
If you want an example of someone who truly appeared to be a loon in his later years but didn’t do badly from the standpoint of amassing vast wealth, there’s this guy named Howard Hughes.
Gladwell has been criticised, early and often, for glossing over details to make fact fit theory. The 10,000 hour rule, for example, is only part of the story.
Bill Gates may have had 10,000 hours of programming experience by college, but there’s only a few companies even close to Microsoft, and even fewer emerging today. Despite what we say about Billy he did write MS Basic from scratch, made it fit in 8K, compiled the assembler code by hand because he did not have a computer, punched it by hand on teletype paper tape, and took it to a computer show where it actually ran first time. There’s some serious talent involved, practice just makes perfect.
Similarly, Paul McCartney seems to have had a serious talent for writing songs and melodies, not everyone with a decade of intensive practice can compose that well. (The movie “Amadeus” comes to mind here)
There is a component called “talent” which not everyone has. There’s also a component called luck, or timing. That talent fits exactly what is needed at the time.
As I posted earlier, there’s a knack or talent called “salesmanship” which is a typical route to getting rich. It seems to me it’s a bit of empathy, to understand the customer, a bit of ego to believe some of your own hype (since nothing succeeds like confidence), and a bit of sociopathy, to push onto them what satisfies your agenda rather than the customer’s and not be bothered doing it. Trump has this talent, and he also had the practice - having daddy’s millions to help him get started and avoid certain potholes in the road.
True, too, it was timing. The original Trump towers were a bit of genius. He finished with mostly the cheapest fixtures and materials, since the first thing a multimillionaire does with a condo is gut it and rebuild the interior. (Hopefully somewhat tastefully, not in gaudy tacky noveaux-riche fake baroque gilding like Trump’s penthouse on Apprentice)
The other ventures he has participated in, the way he sells his name, he is a pretty good salesman. However, like his tacky penthouse, it’s all superficial bluster, not a deep and lasting understanding of long term strategy to build value.