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Gaming Guru

Joe Weinert
 

Atlantic City Roundup

10 November 2003

ATLANTIC CITY -- Business began returning to normal at Tropicana Casino and Resort in Atlantic City a week after a parking garage under construction collapsed and killed four workers.

Demolition crews painstakingly cut down a wobbly, unsupported 100-foot concrete wall left standing after the collapse, allowing the casino to reopen its adjacent 604-room West Tower hotel and half of its existing parking garage.

The garage and West Tower had temporarily opened two days after the crash, allowing employees and guests to scatter through the buildings for 24 hours to retrieve their belongings and cars. Both buildings had been evacuated after the collapse, leaving 800 cars and loads of clothes and personal items unavailable.

"Our guests have been completely understanding and supportive and have offered their condolences to the families (of the construction workers killed)," Tropicana spokeswoman Maureen Siman said.

All of Tropicana's 1,625 hotel rooms are permanently now open, although guests have to walk across Pacific Avenue to access the West Tower instead of using the elevated walkway. Authorities are unsure when the walkway and the other half of Tropicana's garage will reopen.

Investigators from the Occupational Safety & Health Administration officials have not determined why the garage collapsed and have no timeline for filing their report. Neither Tropicana parent Aztar Corp. nor construction officials can say whether the garage collapse damaged the integrated 502-room hotel tower and retail area also under construction.

Tropicana's $245 million expansion was scheduled to open in March. Aztar officials said they are unable to determine a new timetable.

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Gov. James McGreevey's Democratic party took control of both houses of the New Jersey Legislature in midterm elections, an situation analysts say should be worrisome for Atlantic City casino bosses.

"Democratic control may be negative for the casinos, given Gov. McGreevey's attempts to raise taxes and expand gaming," Banc of America Securities analyst Andrew Susser said in a note to clients.

McGreevey surprised the industry last February with his call for $135 million in new gaming taxes and a push to allow racetrack slots. In the end, the Legislature approved $90 million in new taxes and the racino idea went nowhere.

But with a projected $4 billion deficit next year the casinos' chief political ally, Republican state Sen. Bill Gormley, now in the minority, the casinos are already working hard to avoid a tax redux.

"We have to create relationships with people we've never had to before, and from an industry standpoint, and specifically from a Harrah's standpoint, we're doing that right now," said David Jonas, who oversees Harrah's Atlantic City and Showboat Casino-Hotel for Harrah's Entertainment.

Casinos will rely less on Gormley and are attempting to forge new ties with Democratic leaders, Jonas said. Casinos also need to emphasize their charitable contributions in the powerful northern half of the state and emphasize their Casino Reinvestment Development Authority funding up there, he said.

McGreevey's chief of staff, Jamie Fox, said the governor wants to avoid taxing the industry but can offer no guarantees at this point.

"The treasurer is looking at the budget. . We want to avoid any type of new taxes, but it's too premature," Fox said. As for reviving the racino idea, Fox said: "VLTs are not on the table. There are a number of different legal opinions (about whether allowing them would require a popular vote), but quite frankly, it's not under discussion."

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Poor third-quarter results prompted Standard & Poor's to downgrade the ratings outlook from "stable" to "negative" for $1.8 billion of junk-bond debt carried by Donald Trump's casino company.

The revision affects the $1.3 billion Trump Atlantic City Associates notes backed by Trump Taj Mahal and Trump Plaza and the $490 million Trump Casino Holdings notes backed by Trump Marina and Trump Indiana.

Standard & Poor's reaffirmed its rating of CCC-plus (poor to default) for the Trump Atlantic City notes and B-minus (speculative or low grade) for the Trump Casino Holdings notes.

S&P analyst Michael Scerbo said upgrades are unlikely given the impact of the new Borgata Hotel Casino & Spa on the Trump casinos' and because the seasonally slower winter season is approaching.

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Sands Casino Hotel is offering business executives something they won't find at any other casino: dinner with a multibillionaire.

Executives can buy their way into the "Million Dollar Deal: Showdown at the Sands" poker tournament for $10,700, which includes the unusual perk of having dinner with Carl Icahn, the renowned financier and Sands' principal owner.

The "Business Persons' Package" includes a $10,200 buy-in to Sands' poker tournament, round-trip limo from Philadelphia, three nights in the casino's hotel, private poker instruction and the gala dinner with Icahn.

Legend has it that Icahn began his investment career with $4,000 in poker winnings in the early 1960s. He's now worth $7.3 billion and is the 26th richest American, according to Forbes magazine. His holdings include the Stratosphere and Arizona Charlie's casinos in Las Vegas.

(Joe Weinert covers the gaming industry for The Press of Atlantic City. He can be reached at jweinert@pressofac.com.)