Trump's Co. Backs out of Indiana Casino Plan

FRENCH LICK, Ind. - Donald Trump's casino company has dropped plans to build and operate a casino in southern Indiana, saying the state imposed heavy tax burdens and that there were other plans made for gaming in the state since it won the casino bid.

Ernest Yelton, executive director of the Indiana Gaming Commission, said Wednesday that negotiations had ended with Trump Hotels and Casino Resorts Inc. amid a review that began after Gov. Mitch Daniels took office in January.

Yelton said Trump officials told him Monday that the company had decided against continuing with the project in French Lick, about 40 miles south of Bloomington. He said he had recently given the company conditions to meet in order to continue with the project.

Trump officials cited a recent state tax court decision that the company owed $18 million in back taxes for its casino along Lake Michigan in Gary, and the potential expansion of gambling elsewhere in the state.

"The financial prospects for a casino in French Lick have changed since the time we were awarded the project," company President Scott Butera said in a statement. "The tax burdens have become more onerous, and the proposition for additional gaming facilities in Indiana appears eminent."

The state Gaming Commission in July selected Trump's company over two others groups that bid for the rights to the license for the Indiana's 11th casino, which the Legislature authorized in 2003.

A contract between Trump and the state, however, had not been finalized and doubts about whether the company could carry out its $108 million development plan had been raised since it filed for bankruptcy protection in November. A Trump attorney had said at the time of the bankruptcy filing that the company planned for the casino to open in early 2006.

Representatives of the two other bidders for the casino license said Tuesday they were still interested in the project.

Yelton said no decisions had been made on a timeline or whether new groups would be allowed to submit bids.

"My goal is to have an executing operating agreement before the date the Trump representatives would have ever made up their mind whether or not to precede," he said.

Lu Meis, managing partner of bidder Orange County Development, said Indiana Pacers President and French Lick native Larry Bird, a minority partner in the group, was still interested in the project.

"We are definitely interested," Meis said. "We are interviewing new partners."