Tropicana wants Atlantic City casino back

Nov 4, 2008 5:06 PM

Staff & Wire Reports |

The company that lost control of the Tropicana in Atlantic City is seeking to regain operating authority.

In a petition filed with the New Jersey Casino Control Commission (CCC) last week, Tropicana Entertainment asserted that a new management team would "have a better chance" of reversing the property’s 48 percent decline in operating profits.

"We have assembled a strong, highly competent new management team that is experienced in the Atlantic City market," said Scott Butera, Tropicana Entertainment’s CEO. "We want to immediately deploy our managerial and financial resources to serve the gaming public and provide tax and employment benefits to the community."

Tropicana Entertainment lost control last December when the CCC denied co-owner Columbia Sussex Corporation and its president William Yung a casino license, based on reports the property was mismanaged.

Because Columbia Sussex was unable to use casino income to pay for loans used to purchase the property, it filed Chapter 11 bankruptcy and the CCC appointed a conservator to handle the sale of the resort and casino.

Butera said that all ties between Yung and Columbia Sussex have been severed and that Tropicana Entertainment would provide "well-financed, professional casino management."

Tropicana’s petition asks the CCC to appoint a co-conservator and give him the authority to bring the casino under the company’s corporate umbrella. Further, Tropicana would make investments to improve the casino’s operations so it can be either sold at a fair price or realize its longer term value as a profitable business.

If the CCC grants the petition, Tropicana will move to file the appropriate applications for a gaming license and ask the commission to convene hearings on the issue "as soon as practicable."

Butera, who already holds a New Jersey casino key casino employee license, said a new operating team has already taken positive steps that would benefit the Atlantic City property. They include establishment of headquarters in Las Vegas, arranging debtor in possession financing, and obtaining approval of the Nevada Gaming Commission to operate the company’s five casinos in Nevada.

"The issue here obviously involves maximizing value for our constituents," Butera said. "But New Jersey and Atlantic City have a lot at stake, too. Selling the casino at today’s depressed prices could have the unintended consequence of lowering assessed values and drastically cutting city tax revenue."

In addition to filing the petition with the CCC, Tropicana Entertainment last month asked the New Jersey Supreme Court to hear its appeal of the Commission’s decision not to renew its gaming license.

The Supreme Court agreed to hear the appeal, but hasn’t yet issued a ruling.

"We are certainly gratified by the Supreme Court’s decision and we are eager to have our day in court," Butera said, adding that any timetable for the sale of the property would have to be extended until the Court makes a ruling.

Although the state Supreme Court hasn’t set a date for hearing the appeal, the Casino Control Commission is scheduled to meet next week (Nov. 12), at which time it is expected to respond to Tropicana’s petition.