New Jersey gaming regulators last week gave Columbia Sussex Corp. interim approval to own and operate the Tropicana Casino and Resort, a key step in the company’s efforts to become a big player in the casino industry.
Columbia Sussex, a privately owned hotel and casino operator based in Fort Mitchell, Kentucky, plans to refurbish and expand Tropicana to capitalize on the success of the gaming hall’s Cuban-themed retail complex, The Quarter.
Columbia President William J. Yung III and his top aides said the company wants to add 1,000 rooms to Tropicana and speed up the previously planned renovation of the casino’s aging casino floor and two existing hotel towers.
"If we could get the land, I don’t think it would be a problem doing a thousand more rooms," Yung said of the possibility of building a new hotel tower.
Columbia wants to re-theme the casino floor to make it compatible with The Quarter, the $280 million retail and entertainment complex that has boosted Tropicana’s revenues by double-digit margins since opening in late 2004. The Quarter’s colorful architecture is modeled after Old Havana, Cuba.
Little known in Atlantic City, Columbia is buying the Tropicana and three other casinos in Nevada and Indiana from Phoenix-based Aztar Corp. Columbia expects to close the $2.75 billion deal early next month, pending regulatory approvals in Indiana and Louisiana.
New Jersey has joined Nevada and Mississippi regulators in granting approvals. In a 5-0 vote, the New Jersey Casino Control Commission cleared the way for Columbia’s affiliate, Wimar Tahoe Corp., to take control of Tropicana on an interim basis.
A final vote by the commission on Wimar’s full gaming license will come after the New Jersey Division of Gaming Enforcement completes its background investigation of the company.
"We welcome Wimar, which, by all indications, is poised to be a vibrant and successful competitor in this market," Commission Chair Linda M. Kassekert said.
Columbia is a mid-tier gaming operator that has eight riverboat and land-based casinos in Nevada, Louisiana and Mississippi. It plans to build a nationwide gambling network by adding the Aztar casinos to its portfolio.
Aztar’s premier assets are the Tropicana and 34 acres of prime property along the Las Vegas Strip ready for development into a megaresort.
Tropicana gives Columbia access to Atlantic City’s $5 billion-a-year gambling market. However, the company will face intense competition from the industry-leading Borgata Hotel Casino & Spa, the four Harrah’s properties and Tropicana’s other rivals on the Boardwalk.
"I think the Atlantic City market is a very vibrant market," Yung said in testimony before the Casino Control Commission. "It just seems to me that Atlantic City has so much going for it, where it didn’t before. I think it will continue to grow."
In taking control of Tropicana, Columbia is already planning changes in the casino’s top management. Tropicana President Pam Popielarski and other senior executives will be leaving, Yung said. Columbia marketing executive Fred A. Buro, a former president of Trump Plaza Hotel and Casino, will take over the top job at Tropicana.
Additional cuts are expected in Tropicana’s 4,000-member work force, Yung said, although he did not divulge a number or pinpoint the areas that would be affected.