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Atlantic City Report: Casinos set for another dismal December

Dec 2, 2008 5:08 PM

Staff & Wire Reports |

It’s not shaping up to be a happy holiday season for Atlantic City casinos. December is always a tough month as casinos must compete with shopping malls for customers’ dollars.

It’s even worse this year because of the slumping economy and fierce competition from slot parlors in Pennsylvania and New York. Last December, casino revenues fell 10.6 percent, and that was before the bottom dropped out of the national economy.

If facing the second straight year of declining revenues isn’t enough, Atlantic City has other issues to deal with:

Yung loses bid to regain Trop

New Jersey’s highest court upheld a decision by casino regulators to revoke the license of the former owner of the Tropicana, removing a major obstacle in the way of the casino’s sale.

The New Jersey Supreme Court issued no opinion, but affirmed the decision of the Appellate Division when it ruled in favor of the Casino Control Commission, which took the unusual step last December of voting, 4-1, to deny a casino license to Kentucky businessman William Yung.

Tropicana lawyers had argued in part that a letter sent to the commission from State Senator Richard Codey on behalf of a large Atlantic City union improperly influenced the commission.

But commission chairwoman Linda Kassekert said the court’s ruling "reinforces our position the decision was clearly based on the record developed before us and not any external factors."

Kassekert said the decision also "clears the way to reactivate the process of finding a new owner for the casino hotel."

Yung, a hotelier, came out of nowhere three years ago when he embarked in a bidding war with Dan Lee, Pinnacle Entertainment’s chief executive, for control of Aztar, which owned the Tropicana casinos in Las Vegas and A.C., its flagship, along with a handful of small gambling parlors and a prime piece of land on the Las Vegas Strip. Yung borrowed heavily for the $2.8 billion he paid for the company.

Trump Atlantic City misses bond payment

Trump Entertainment Resorts missed a $53.1 million bond payment on Monday. "During this period, the company and the issuers intend to pursue discussions with their lenders to restructure the company’s capital structure," Trump Entertainment said in a statement, though there’s no guarantee that a restructuring deal will be reached with lenders.

The company now has 30 days to either make the payment or restructure the debt.

Trump is the second Atlantic City casino operator to reveal that it is falling behind on its debt payments.

Resorts Atlantic City said last week that it was unable to make a monthly interest payment because of the impact of the slumping economy.