New management, layoffs at Horizon Casino Resort
May 6, 2009
LAKE TAHOE ” One by one, the latest victims of a global recession filed out of the human resources office at Horizon Casino Resort on Tuesday.
Some carried personal belongings in 13-gallon plastic trash bags, some were visibly shaken by the news that they had lost their jobs, and at least one former employee said he was glad to leave.
Almost all said they were surprised by Tropicana Entertainment’s announcement on Tuesday that the company would lay off about 75 people at the struggling casino as part of a change in operators that includes the removal of table games.
Although there was some gallows humor from employees during the meetings where casino officials announced the layoffs, the mood was “pretty somber,” said Gary Hill, who has worked as a card dealer at the South Shore for 36 years, including the last 6 1?2 at Horizon.
Hill ” who was laid off Tuesday ” said he would still travel for a vacation that was scheduled to start Monday, but added he wasn’t sure what he would do after that.
“I’ll come back, take a breath, and see what’s out there,” Hill said, noting he wasn’t particularly optimistic about his prospects.
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Benji Hammett, 25, a dealer at Horizon for 4 1?2 years, said he would use his severance pay for a month-long vacation.
Hammett said he wouldn’t miss the work.
“I hated dealing,” Hammett said. “These grown-ups are children when they drink.”
But most of those who were laid off on Tuesday didn’t share Hammett’s sentiment.
One woman, who said she had dealt cards at the casino for more than 30 years, broke down into tears before leaving the Horizon parking lot in a white truck.
Several Douglas County Sheriff’s patrol vehicles were parked outside the casino on Tuesday to discourage laid-off employees from lashing out against their former employer. But no incidents were reported as of Tuesday evening.
“They’re just there to keep the peace,” said Douglas County Sheriff’s Sgt. Jim Halsey. “They are there on behalf of the management.”
Inside the casino on Tuesday afternoon, a handful of people pumped quarters into slot machines, while employees removed chips from cases on each of the casino’s now-defunct blackjack tables.
“Horizon will no longer offer table games and, depending on business levels, may also downsize slot operations from its current level of 600,” stated a release from Tropicana Entertainment, which owns the Horizon.
In the next 30 days, Lake Tahoe Realty I, a new company owned by an affiliate of Columbia Sussex Corp., will take over management of the Horizon Hotel and will assume responsibility for employees, staffing and payrolls.
That includes food and beverage operations and the parking garage.
Casino operations will be limited to no more than 200 gaming positions. Tropicana Entertainment will continue to operate the casino on a limited basis under a lease with the Edgewood Companies until Lake Tahoe Realty I has been licensed by the Nevada Gaming Commission, or if a third party is hired to run the floor.
Tropicana spokesman Hud Englehart said he did not know how long the interim gaming management position would last.
“We believe that the Tahoe market offers significant long-term opportunities, though it is currently challenged by added supply from cross-border competitors,” Tropicana Entertainment CEO Scott C. Butera said in the company’s statement. “This new arrangement will allow us to operate a highly successful, first-class operation at MontBleu during the term of our lease.”
Tropicana and Edgewood Companies also agreed to new lease terms for MontBleu Resort Casino & Spa, the companies said in separate statements. Butera said the company will build its customer base at MontBleu, where the lease was extended 10 years to 2028.
Because of the downturn in the market, Tropicana didn’t think it was beneficial to have two casinos competing against each other, when it could focus all its resources into one casino, Englehart said.
Tropicana Entertainment filed for Chapter 11 bankruptcy protection in May 2008.
Tropicana and Columbia Sussex were affiliated, but Tropicana’s bankruptcy reorganization canceled all the equity interests of former owner William J. Yung III, and no relation now exists, Englehart said. The affiliation was terminated in principle about nine months ago when Yung stepped down from the company.
Columbia Sussex was interested in regaining the property, and Lake Tahoe Realty I stepped in to take over the lease, Englehart said.
In April 2008, a settlement agreement was reached in Douglas County District Court after Park Cattle Co., the owner of the property on which the Horizon Casino Resort sits, sued casino subsidiaries of Tropicana and Columbia Sussex. The settlement agreement was for $165 million.
Edgewood Companies, which includes Park Cattle Co., claimed the Tahoe property was not properly maintained.
Under the settlement, the Horizon’s lease will end on March 31, 2011.