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May 26, 2019

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Carl Icahn group gets licensing to run 3 Nevada casinos

Company official mum on plans for Fontainebleau

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Carl Icahn

The Nevada Gaming Commission today approved 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.

But company officials didn’t disclose how Icahn’s Tropicana holdings would be managed in conjunction with his expected acquisition of the Fontainebleau resort on the Strip.

Queried by Gaming Commission Chairman Peter Bernhard about the status of the Fontainebleau deal, Dominick Ragone, chief financial officer of Icahn Enterprises, said he couldn’t reveal any plans.

Ragone said the company expects to be the only qualified bidder for the unfinished 3,815-room Strip property, being purchased out of bankruptcy, and that the deal is expected to close on Feb. 9.

In an interview after his appearance before the commission, Ragone said there is no timetable for announcing details of plans for Fontainebleau.

The Fontainebleau acquisition was unrelated to today’s regulatory approval.

In a unanimous vote, commissioners agreed to license Tropicana Entertainment to operate the Tropicana Express and River Palms casinos in Laughlin and the MontBleu in Stateline.

The Tropicana on the Strip is under a different ownership group and officers there were approved for licensing last year. Tropicana Entertainment President and CEO Scott Butera told commissioners his company is still in the midst of a licensing dispute with the owners the Tropicana and a suit has been filed over the continued use of the Tropicana name.

The licensing is expected to lead to closing the books on Tropicana Entertainment’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 this month.

Bernhard and Commissioner Tony Alamo said they appreciated that no properties were closed in the bankruptcy process, that most of the employees kept their jobs and that the properties continued to generate tax revenue. But they also noted that there were several losers in the deal, including the unsecured debt holders who were left with nothing.

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, Butera, Tropicana director Michael Corrigan and longtime former Station Casinos Chief Financial Officer Glenn Christenson.

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 Louisiana, Indiana and Mississippi are expected to consider licensing matters this month, while New Jersey officials plan to review it in February.

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

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.

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