Rebecca Scholtz, of Danville, Ky., holds a ‘No Casinos’ sign at the Women Against Gambling Expansion rally in the Capitol rotunda in Frankfort, Ky., Feb. 19.AP photo
FRANKFORT, Ky. — A wealthy casino operator is defending an eye-catching $1 million contribution to a political group that worked to elect a pro-gambling governor in Kentucky.
William Yung III, who heads Crestview Hills-based Columbia Sussex Corp., has essentially placed a huge bet that newly elected Gov. Steve Beshear will be able to get the state’s long-standing prohibition against casinos lifted.
“I make no apologies for helping get Steve Beshear elected,” Yung told The Associated Press in an interview this week. “I’ve got a First Amendment right to spend my money any way I want to spend it.”
Beshear is proposing an amendment to the state constitution that would allow up to seven casinos to be built at Kentucky horse tracks and five others in communities along the state’s borders with Indiana, Ohio, Tennessee and West Virginia. That many casinos, he said, could generate $600 million a year in tax revenue for a cash-strapped state government.
The proposal is a long shot in a Bible-belt state where lawmakers have rejected numerous other casino proposals over the past decade. If it passes, Yung would open a casino on a northern Kentucky site he bought just last month for $7 million.
“Absolutely, we’re gambling on it,” Yung said. “We don’t know if it’s going to pass or not.”
Yung may have worsened his odds with the land purchase and the political contributions, including a $10,000 donation to help pay for Beshear’s inaugural party on the Capitol grounds. Casino opponents seized on his investments, claiming he is using his riches to buy his way into a new and potentially lucrative market.
Political contributions of $1 million or more are becoming common in state-level elections, said Rachel Weiss, spokeswoman for the National Institute on Money in State Politics.
Beshear, who raised and spent about $6.8 million on his campaign last year against former Gov. Ernie Fletcher, insists Yung’s contributions bought him no favors. Yung would have to apply for a casino license just like anyone else, Beshear said.
“It would be naive for anybody to believe that a $1 million contribution to a fund that helped elect a pro-casino governor is not going to position the contributor in a favorable way,” said John Mark Hack, head of the antigambling group Say No To Casinos.
After Beshear took office in December, Yung’s privately held company, Columbia Sussex, paid $7 million for a site in northern Kentucky to build a casino. Yung called the property “prime real estate” that he can easily resell if Beshear’s casino proposal flops.
Columbia Sussex owns 13 casinos and 80 hotels in the United States and beyond, pulling in revenues of some $3 billion a year.
Hack contends Columbia Sussex is looking to Kentucky to open a new casino because the company is under fire in other states. The New Jersey Casino Control Authority refused in December to grant the company a new license to operate the Tropicana Casino and Resort in Atlantic City, and regulators in Indiana are threatening to take similar action against Casino Aztar in Evansville.
Immediately after taking control of those casinos from Aztar Corp. on Jan. 3, 2007, Columbia Sussex began slashing payroll, eliminating cocktail servers, security guards, hotel room cleaners and even locksmiths. Its largest union howled in protest, and said the cuts left the Tropicana understaffed and filthy – concerns echoed by its patrons.
Yung contends the problems were the result of a work slowdown of unionized workers when the company began reducing jobs to bring staffing levels at the Tropicana in line with similar casinos.
Columbia Sussex has put both the Tropicana and Aztar casinos up for sale. Yung said he hopes to have buyers identified for both by the end of April and the sales finalized in June. More than two dozen potential buyers have expressed interest.
After the company announced the proposed sale, the Indiana Gaming Commission suspended an investigation into complaints at Casino Aztar similar to those raised in New Jersey. If ownership changes, the agency said, there would be no need for an investigation.
Nevada gambling regulators, also reacting to the New Jersey sanctions, began a probe of Columbia Sussex, which has six casino-hotels in Nevada, including the Tropicana on the Las Vegas Strip.
Yung, a Kentucky native, said none of that has anything to do with his interest in opening a casino in his home state.
Beshear had made legalizing casinos a centerpiece of his campaign against former Gov. Ernie Fletcher, a Republican who had been politically weakened by political scandal. Beshear pulled off a lopsided victory, and claimed it reflected broad-based support for legalizing casinos.
Casino opponents, however, say Beshear’s victory was the result of distaste for Fletcher, who, along with 13 associates, was indicted in 2006 for alleged violations of state hiring laws. Fletcher pardoned his associates and reached a deal with prosecutors to have the charges against him dropped.
William Yung III has placed a huge bet that newly elected Gov. Steve Beshear will be able to get the state’s long-standing prohibition against casinos lifted.