Atlantic City’s Tropicana Casino and Resort was taken over by the Kentucky-based Columbia Sussex Corp at the beginning of January this year. Since then there seem to have been nothing but problems for the new owners, ranging from union battles over staff reductions to accusations of unhygienic conditions. The Tropicana is now fighting to retain its New Jersey licence.

Columbia Sussex, which suffered a 9% decline in revenue in the three months to 30 September, filed a lawsuit against union leaders in New Jersey stating that their interference had cost the company millions of dollars in operating losses. The company has also revealed that it will not meet end of quarter bank debt covenants and is now facing higher interest costs on outstanding debt.

Over a third of Columbia Sussex’s casino revenue and operating profit comes from its Atlantic City Tropicana operation. A two week licence renewal hearing opened at the New Jersey Casino Control Commission on 20 November and the hotel workers union is pushing for a rejection. Since taking over the Tropicana, CEO Bill Young has cut around 900 jobs. The Commission will make a decision by 12 December.

The New Jersey Division of Gaming Enforcement has recommended that the Tropicana be granted a one-year licence rather than the usual five-year one. The agency argues that so far Columbia Sussex has not proved it is capable of running a first class facility. The company says it may have made mistakes but that it has learned from them. The Division of Gaming Enforcement has also asked for a substantial penalty to be paid by Columbia Sussex for ignoring a state law that requires casinos to have an independent audit committee. (E-12.05.07)

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