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Arnold M. Knightly

Tropicana Las Vegas reports $9.9 million loss

4 June 2010

LAS VEGAS, Nevada -- Construction disruptions at the Tropicana Las Vegas and the economic downturn drove one of the Strip's oldest properties to a significant loss in the first quarter, property officials said.

The 53-year-old hotel-casino posted a $9.9 million loss in the first quarter ended March 31, according to a filing with the Securities and Exchange Commission. The loss is more than double the $4.5 million loss experienced for the same quarter last year.

The loss was driven by a 44.1 percent decrease in revenues to $13.1 million, down from $23.3 million in revenues last year, the filing shows. Casino revenues dropped 35.4 percent to $6.5 million, food and beverage revenues fell 52.9 percent to $2.3 million and hotel revenues dropped 33.7 percent to $4.4 million.

The property is undergoing a $165 million renovation scheduled to be completed in April. It recently took out $60 million in new debt to help finance the work.

The casino floor's slot count will remain at about 1,000 machines, but table games will increase from 25 to 40, President Thomas McCartney said.

In food and beverage, the property will rebrand the steakhouse, expand the Italian restaurant and add three new restaurants by December.

Approximately 400 of the hotel's 1,658 rooms have been renovated, with nearly 1,100 rooms kept in rotation while renovations continue.

A new race and sports book and poker room will open in November.

The property was acquired in bankruptcy July 1 by an investment group led by Canadian private equity firm Onex Corp. and former MGM Grand Inc. executive Alex Yemenidjian.

Onex and its partners purchased another $45 million of Tropicana's preferred shares last April, raising its ownership stake from 64.4 percent to 73 percent.