High stakes in Kentucky casino push

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 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. Columbia Sussex formerly owned the Tropicana Casino & Resort in Atlantic City.

"I make no apologies for helping get Steve Beshear elected," Yung told the Associated Press in an interview last 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 as many as 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 casino proposals over the last 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, contending he is using his riches to buy his way into a 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.

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 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 by unionized workers when the company began cutting jobs to bring staffing levels at the Tropicana in line with those at similar casinos.