Irked by massive layoffs, cleanliness problems, customer complaints and a regulatory violation at the Tropicana Casino and Resort, New Jersey's Casino Control Commission refused to grant its new owner a license.
Wednesday's decision marked only the second time in New Jersey's 29-year history of legalized gambling that the commission has denied a license renewal and forces Columbia Sussex Corp. to sell the property unless it is blocked by an appeals court. A company lawyer said an appeal would be filed.
The casino, which includes New Jersey's largest hotel, will stay open under the supervision of a retired state Supreme Court justice, Gary S. Stein. The commission also fined Columbia Sussex $750,000 for not having an independent audit committee for nearly six months _ a crucial requirement under state law.
"This in no way interrupts casino operations," said commission Chairwoman Linda Kassekert. "The casino and hotel remain open. The employees will be on the job and will be paid, and customers will be able to gamble and enjoy all the amenities that the Tropicana has to offer."
Immediately after taking control of the Tropicana from Aztar Corp. on Jan. 3, Columbia Sussex began slashing payroll, eliminating cocktail servers, security guards, hotel room cleaners, even locksmiths. Its largest union howled in protest and said the cuts left the Tropicana understaffed and filthy _ concerns echoed by patrons.
"Staffing was slashed in pursuit of profit," Kassekert said. "Cleanliness was disregarded in order to meet a predetermined bottom line. Customer service was dismissed.
"Simply put, I do not believe this applicant has the business ability to operate a facility of this size and magnitude given the decisions that were made."
The hearing room, which was packed with Tropicana workers, erupted into cheers when the commission voted 4-1 to deny Columbia Sussex a new license.
"They're happy that this company has now been shown in the light of truth," said Robert McDevitt, president of UNITE-HERE Local 54. "They've been suffering under this company since January, and now the whole world knows it."
He called the ruling "a victory for our industry."
"The element that was taking us in the wrong direction is being taken out of the picture," he said.
The decision took some by surprise because the state Division of Gaming Enforcement had recommended that the company be granted a one-year license renewal with a slew of conditions rather than an outright denial. The division acts as a prosecutor in licensing cases.
Since taking over the Tropicana, Crestview Hills, Ky.-based Columbia Sussex has eliminated nearly 900 jobs _ about a quarter of the casino's work force.
Paul O'Gara, a lawyer for Columbia Sussex, said Chief Executive William Yung III was disappointed with the decision but took it calmly. Yung was present in the meeting room when the hearing was scheduled to start at 2 p.m. but left soon afterward. By the time the decision was announced just before 5 p.m., he was already in Cincinnati, O'Gara said.
In a statement Wednesday evening, Mark Giannantonio, president and chief operating officer of the Tropicana, said the casino will work "closely and diligently with the appointed trustee."
"I want the public to know that the Tropicana will remain fully open for business in Atlantic City. We have a very dedicated and hardworking staff here who will remain committed, as always, to provide our guests with a quality experience throughout their stay," he said.
The last time the commission denied a license was in 1989, when the owners of the former Atlantis Casino Hotel were deemed to be too financially shaky, to the point where regulators worried the casino did not have enough cash on hand to pay jackpots to winning gamblers.
Stein, the retired justice, was selected to serve as a trustee a year ago when the Tropicana was sold until the new owner could be qualified and relicensed _ a common step under New Jersey law. The denial of the license triggered activation of the trusteeship, and Stein was expected to begin overseeing the Tropicana's operations Thursday.
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