Tropicana Entertainment assigns casino lease to former owner

Tropicana Entertainment is assigning the lease of one of the two casinos it operates in Lake Tahoe to the casino company's former owner, Columbia Sussex.

Hotelier Bill Yung III will take over the lease for the Horizon Tahoe Hotel and Casino, while Tropicana Entertainment will operate the MontBleu Resort a half-mile away.

The move will allow Tropicana Entertainment to focus on a single property in the area, which has been hit hard by the economic slowdown and the increase in American Indian casinos in California, the company said Tuesday.

"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 Chief Executive Officer Scott C. Butera said in a statement. "This new arrangement will allow us to operate a highly successful, first-class operation at MontBleu during the term of our lease."

Both properties are leased from third-party owners. Tropicana Entertainment has negotiated new terms for MontBleu, which has 437 hotel rooms, 631 slots and 36 table games, which takes the lease through 2028.

The Horizon's lease expires March 31, 2011 with three one-year extension options.

The terms of the lease assignment stipulates that the Horizon no longer offer table games, and the property may downsize its slot operations from its current level of 600 machines.

Columbia Sussex will take over management of the 319-room hotel and other nongaming amenities by early June.

The casino will continue to be operated by Tropicana Entertainment pending approval of Columbia Sussex or a third-party operator by gaming regulators to run the casino.

Columbia Sussex is currently licensed through its operations of the Westin Casuarina on East Flamingo Road east of the Strip. Yung lost his ownership in Tropicana Entertainment through the Chapter 11 bankruptcy restructuring approved Tuesday in Delaware.