If Justice Gary Stein, the state-appointed trustee for the Atlantic City Tropicana Casino & Resort, isn’t the most inept public servant in America, it’s not for lack of effort. Add nepotism to his string of failings, as his ever-less-credible pronouncements now emerge from the mouth of his son, Martin Stein, a lawyer who has apparently joined Dear Old Dad at the public trough.
The Steins’ latest bit of boobery involves not re-starting the bidding process for the Trop until sometime (as yet unspecified) after Labor Day and then having it wrapped up on Oct. 16, six weeks later. Their excuse for this foreshortened timetable is that advisers Moelis & Co. are “just beginning their work,” even though they’ve been on the payroll for over a month and a half. I’m not necessarily saying the Stein-supervised process is slow, but I’ve seen glaciers that moved faster.
The Steins also continue to evince boundless optimism that they’re going to get better offers the second time through the process. Considering that Atlantic City’s revenue numbers have continued to weaken and the economy has not improved, I’d sure like a sniff of whatever “happy dust” they’ve been inhaling. Of course, the blame ultimately redounds to the New Jersey Casino Control Commission for appointing Justice Stein to perform a task for which he has proven, by all outward appearances, manifestly ill-equipped.
On other Trop-related fronts, the prospect that Tropicana Entertainment may renege on its sale of Casino Aztar is stirring up alarm in Evansville, Ind. As revenues predictably plummeted under the slash-and-burn regime of Columbia Sussex (TropEnt’s parent), so did Evansville’s revenue share: -27% the first year, with incremental decreases projected through 2009.
There’s no guarantee Eldorado Resorts will reverse the slide, but this may be one case where the devil you don’t know is distinctly preferable to the one you do. ColSux is playing with fire, too, because a nixed sale could (and probably would) re-start Indiana’s investigation into its operation of Casino Aztar, an investigation that was forestalled only by the Eldorado deal.
Would you buy a used casino from this man?
What do you call a casino exec who loses $1 billion in a single year? Columbia Sussex CEO William J. Yung III, that’s what. (Also “sucker”.) Yung’s also suffered the public indignity of having himself and his properties dissed by rival CEOs Gary Loveman, Penn National‘s Peter Carlino and Pinnacle Entertainment‘s Dan Lee, not to mention the private one of having other Atlantic City casino operators quietly encourage Unite-HERE in its get-Yung-out-of-town campaign. Clearly, the man had a facility for making enemies in the industry.
In today’s Las Vegas Sun, Liz Benston takes a look back at Yung’s Aztar Corp. acquisition, a deal so expensive and so elaborately collateralized (not to mention one that put a walloping financial burden on a grab-bag of second- and third-tier casinos) it was all but predestined to fail. Unfortunately, Benston buys into some of Tropicana President Scott Butera‘s revisionist history, particularly his fish story to the effect that: “When the economic decline began to hurt earnings, Yung was forced to make cuts that eventually proved counterproductive.”
That’s a face-saving spin Butera has been shopping around since he took the Trop job but the fact is Yung’s Aztar purchase was in some respects predicated on making those cuts. They were part of his “road show” presentation to would-be financiers (despite representations to the contrary to New Jersey regulators) and he even hinted broadly at what was coming in a Casino Enterprise Management interview where he talked about making hotel maids do double-duty on the casino floor. The ColSux supremo had to promise savage payroll and personnel reductions if he was to persuade investors he could make this turkey fly — and now he’s got a slew of age-discrimination suits to show for it.
And let’s not forget that while Yung no longer has a title or a board seat at Tropicana Entertainment, he’s its sole shareholder, the power behind Butera’s throne. Until this spectacularly maladroit casino operator liquidates the last of his TropEnt shares, presumably in a debt-for-equity swap, his bad karma will continue to dog the Tropicana and Aztar brands.
Casino CEO disses own games. “They’re boring.” Yes, that’s really what Trump Entertainment Resorts CEO Mark Juliano said about the very sort of electronic table games he installed at Trump Plaza. Combine this with the imminent demise of live dealers at Excalibur‘s poker room and you’ve got the beginnings of a trend in the major resorts that appears both inevitable and discouraging.
