Commission Denies License to Tropicana Casino

On December 13th, 2007, New Jersey's refusal to renew a gambling license held by Northern Kentucky businessman Bill Yung could force Tropicana Entertainment LLC into bankruptcy. In a four-to-one vote, the New Jersey Casino Control Commission placed the establishment under the control of a trustee, ex-New Jersey Supreme Court Justice Gary Stein.

Under the New Jersey gambling rules, Stein will manage the casino until a brand new owner can be found. The commissioners said that Yung's inability to form an independent audit committee to manage casino operations and a clear evidence of financial integrity as one of the factor why the commission denied the casino a license. The commission also imposed a $750,000 fine on the casino. Tropicana said that they will appeal the decision.

Aside from that, it is also pursuing the sale of the Tropicana Atlantic City and is studying the potential effect of the license denial on their other gambling licenses in other states. The company also stated a potential default that could allow creditors to advance payments unless Tropicana Casino can change the New Jersey Decision by December 19th, 2007. But it is still unclear on what will be the effect of a possible Tropicana Bankruptcy to Columbia Sussex Corporation; a hotel organization that is connected to Yung's gambling organization.

Yung bought the Tropicana Atlantic City when it won the bidding for Aztar Corporation. It produces most of the income for the gaming organizations and money needed by Yung in order to pay off the company owed from the acquisition of the property. Yung has been severely criticized for cutting back 900 jobs at the Atlantic City Casino.

Union officials said that the move of Yung affected the services inside the casino. But the regulators said that was not the reason for the license rejection. The regulators said that Yung failed to cooperate with the regulators on how to improve things in the casino and they believe that Yung's decision making process is flawed. Commissioner Michael Fedorko was the only one to vote against the license denial.

24 December 2007
News Submitted by:
Jack Silverman

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