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Gaming Guru

Richard N. Velotta
 

Former MGM Grand 'wizard' recommended for Tropicana license

15 June 2009

LAS VEGAS, Nevada -- A former MGM Grand executive who helped that company during its merger with Mirage Resorts and then helped turn around the fortunes of a Hollywood film studio got initial clearance from state gaming regulators for his next project: Restoring the fabled Tropicana to its prior glory.

Alex Yemenidjian knows that he will face a challenge and he took a step in that direction with a unanimous vote by the state Gaming Control Board recommending a license for him.

The recommendation June 3 in Carson City goes before the Nevada Gaming Commission on June 18.

Yemenidjian, referred to in a Forbes magazine article as "the wizard of MGM," was hand-picked by major shareholder Kirk Kerkorian to serve as president and CEO of the MGM Grand and later tapped by him to head Metro-Goldwyn-Mayer film studio.

Yemenidjian is part of the Canadian private equity Onex Corp. that has accumulated more than $200 million in principal of the senior debt of Tropicana Las Vegas Resort and Casino LLC, secured by the 1,850-room property.

Scott Butera, who has been running the nationwide Tropicana Entertainment company as CEO, said he supported the creditor-approved reorganization plan and management of the Las Vegas property by Yemenidjian and Onex executives.

Yemenidjian would take over as soon as his license is approved.

Yemenidjian helped stabilize a struggling MGM Grand, leading to its acquisition of Mirage Resorts in 2000 and becoming MGM Mirage.

The Trop's new executive said he plans to spend more than $100 million to refurbish the property's rooms, casino, restaurants and convention center. A South Beach Miami tropical theme is planned.

Yemenidjian told regulators that refurbishing the property's rooms would be the easiest part of the makeover because it could close off rooms a floor at a time without disturbing guests.

But remodeling public areas, including the casino, would be more challenging. He said the Trop also would get a new nightclub and two restaurants.

New slot machines with better bonuses and marketing tools are planned, and the company also would take a slice of race and sports book revenue from American Wagering, which operates a Leroy's there.

He said by next year he hopes to revamp and expand the entrance by lengthening the pedestrian bridges crossing Tropicana Avenue from the MGM Grand and Las Vegas Boulevard from the Excalibur.

The company also has plans for overhauling operations, and the culture and financial sides of the business, Yemenidjian said.

He promised no mass layoffs, but said positions would be evaluated. New entertainment and marketing also are planned, he said.

"In these times, we know we have to do more with less and do it better than before," Yemenidjian told the board. "We know we have a huge job ahead of us."

The Tropicana filed for Chapter 11 bankruptcy protection May 5. The local Tropicana filing was separated from sister properties in Northern Nevada, Laughlin and Atlantic City. Las Vegas' Tropicana includes 34 acres surrounding the hotel.

Yemenidjian said the biggest challenge was to analyze whether it made more sense to refurbish the core structure or to build anew, a strategy proposed by previous owners, but dismissed as financially unfeasible.

Yemenidjian's team includes Joanne Beckett, who helped in the transition of the Golden Nugget from MGM Mirage to Tim Poster and Tom Breitling and from Poster and Breitling to Landry's Restaurants Inc.

In another license request, the board recommended approval for Jon Berkley, president and CEO of Las Vegas Gaming Inc., as an officer and director of the company despite some misgivings voiced by Chairman Dennis Neilander about doing proper background checks and allowing the company's bankroll to fall below prescribed minimums.

Las Vegas Gaming recently relaunched its Nevada Numbers keno-style game, which regulators have reviewed carefully because of fears it was going to be marketed as similar to a lottery, which are illegal in Nevada.

Neilander ultimately said Berkley was suitable for licensing and that it appeared he left information off his application unintentionally. He said the company is quick to respond to mistakes — but that mistakes have been numerous.

In other business, the Control Board:

• Recommended licenses for Jerry Abbott and Christopher Trout as regional operations managers for Golden Tavern Group, parent company of PT's Pubs. Board members spent considerable time reviewing Abbott's personal financial background because of information discovered in the investigation.

• Recommended an ownership transfer and licenses for new partners of Casino Monte Lago at Lake Las Vegas. The request would transfer a one-third stake from the Finley Family Trust through Casino Monte Lago Holding LLC to investors Steven Rittvo, Stephen Szapor Jr., Scott Fisher and Ernest D'Ambrosio.

• Recommended approval of a license for Alan Hoffman, secretary-treasurer of the Stage Door Casino, as an officer of the company.

• Recommended approval of licenses for five investors in the Indian Springs Casino led by Andrew Fonfa and Todd Marshall. The property, which had $800,000 in capital improvements, is being improved to take advantage of the expansion of nearby Creech Air Force Base.