N.J. agency pushes to restrict Tropicana

ATLANTIC CITY — New Jersey’s casino enforcement agency recommended Tuesday that the state grant the Tropicana a one-year license instead of a standard five-year one, arguing that new ownership has thus far proven itself incapable of running a first-class facility.

The recommendation by the state Division of Gaming Enforcement will be considered by the state Casino Control Commission, which will issue the final decision on Dec. 12, commission chairwoman Linda Kassekert said.

Yvonne Maher, acting director of the gaming division, said Kentucky-based Columbia Sussex Corp. and owner William Yung III are off to a dismal start in Atlantic City.

“There’s an old saying, ‘Never bite off more than you can chew,’ ” she said. “That sums up what happened here.”

Since taking over on Jan. 3, Columbia Sussex has slashed the payroll at the Tropicana, cutting nearly 900 jobs, or about a quarter of the casino’s work force.

That touched off a bitter battle with the casino’s main union, which claims the cuts have left the Tropicana dirty and understaffed.

Management blames many of the problems on union resistance to the job cuts, accusing workers of sabotage. Tropicana executives say those problems are in the past, and that conditions are fine.

Tropicana lawyer Paul O’Gara said the company is willing and able to run a first-class facility.

“Would Bill Yung, a man who has accomplished what he accomplished, come here and intentionally take the largest hotel in his portfolio and run it into the ground? It makes no sense,” O’Gara said.

O’Gara acknowledged mistakes were made concerning staffing levels and operational decisions, but he said the Tropicana has learned from them.

“The message was received,” he said. “As we stand here today, the Tropicana has overcome whatever concerns there were for a short time, and operates as the type of facility of which this city can be proud.”

Besides the shorter license, the division asked the state to levy a “substantial six-figure penalty” against the Tropicana for ignoring a state law that requires a casino to have an independent audit committee.

O’Gara acknowledged that some fine was likely to be imposed but said good faith efforts were made to comply with the law.

Maher also asked the commission to impose 26 requirements on any new license for the Tropicana, including requiring it to provide state regulators with 10 to 15 day advance notice of any layoffs, and bi-monthly financial reports.

Before the enforcement division made its recommendation, the union, UNITE-HERE Local 54, asked the state to recommend yanking the Tropicana’s license altogether.

“If the Tropicana wants to commit suicide, so be it,” said Regina Hertzig, a union lawyer. “A filthy and understaffed facility that prompts a flood of complaints from steady customers should not be considered a first-class facility.”

Only once before in the 29-year history of casino gambling in New Jersey have state regulators refused to renew a casino license. That happened in 1989 when the owners of the former Atlantis Casino Hotel were deemed to be too financially shaky — to the point where regulators worried that the owners did not have enough cash on hand to pay off jackpots won by gamblers.

The commission has four alternatives: It can approve the license for a full five years; approve it for a shorter term with conditions; deny it altogether; or approve the Tropicana’s license but refuse to qualify Columbia Sussex as approved operators, in effect forcing a sale of the property. In that event, an outside overseer would run the Tropicana until new owners can be approved.