Regulators recommend Carl Icahn’s plans for Nevada properties

By Richard N. Velotta

Wednesday, Jan. 6, 2010 | 12:03 p.m.

The state Gaming Control Board today recommended approval of the licensing of Carl Icahn’s Tropicana Entertainment LLC to control three Nevada properties and position the company to oversee nine casinos in four states.

The board unanimously recommended the licensing of Tropicana Entertainment to control the MontBleu casino in Stateline and the Tropicana Express and River Palms casinos in Laughlin.

The recommendation goes to the Nevada Gaming Commission, which is expected to consider final approval on Jan. 21.

The licensing is expected to lead to closing the books on the company’s May 2008 bankruptcy protection filing under previous owners. The U.S. Bankruptcy Court in Delaware has approved Tropicana’s request to register as a publicly traded company later this month.

Regulators waived an appearance by Icahn, who was given a limited individual license while investigators continue to review his extensive portfolio. Icahn is a 47.5 percent owner of Tropicana Entertainment and no other investor has more than a 5 percent interest.

The company’s board of directors includes Icahn, Tropicana President and CEO Scott Butera, Tropicana director Michael Corrigan and longtime former Station Casinos Chief Financial Officer Glenn Christenson.

The Tropicana in Las Vegas is under a different management group and officers were approved for licensing last year.

The licensing of Tropicana Entertainment positions Icahn to bring all his casino entities under one umbrella company, just as he did when he held the Stratosphere, two Arizona Charlies’ properties in Las Vegas and the Aquarius in Laughlin.

Icahn also controls two casinos in Louisiana, one in Indiana, one in Mississippi and was the successful bidder to acquire the Tropicana in Atlantic City for $200 million. Regulators in those states are expected to consider licensing matters this month.

The company now has 4,200 employees in five states with cash flow of $700 million a year.

Butera told board members that the restructuring of the ownership enabled Tropicana to increase its cash flow despite lower revenue in the down economy. The company now operates with minimal debt loads and had $150 million to invest in capital improvement projects, which included the refurbishment of the slot floor and room facilities.

Icahn is also a stalking-horse bidder for the Fontainebleau property on the north end of the Strip, but company officials gave no indication whether Icahn’s plans include bringing that property under the Tropicana umbrella if he is the successful bidder for the 3,815-room development that has yet to open.

Icahn has a track record for identifying and acquiring distressed properties in multiple industries, tinkering with management and facilities and then selling the improved version of the company at a profit.