Deutsche Bank gaming analyst Andrew Zarnett, in a note to investors published late Sunday night, said Kentucky-based Columbia Sussex is facing disciplinary action in Louisiana and Indiana because the New Jersey Casino Control Commission rejected the company's license renewal application for the Tropicana Atlantic City. Gaming laws in both states allow regulators to take away a company's ability to operate a casino if the company loses its license in another state.

Columbia Sussex operates six hotel-casinos in Nevada, including the Tropicana on the Strip. State gaming regulators said last week they wanted to take a closer look at New Jersey's decision to see if the company has violated any Nevada gaming laws.

Zarnett said the statutes in Louisiana and Indiana "provide us deep concern." He said both states have the ability to pull Columbia's gaming licenses because of the New Jersey decision. In Louisiana, Columbia Sussex operates the Amelia Belle riverboat casino southwest of New Orleans and the Belle of Baton Rouge riverboat casino in Baton Rouge. In Indiana, the company operates the Casino Aztar in Evansville.

On Monday, the company said it is selling Casino Aztar and has already signed a contract to sell the Horizon, a riverboat casino in Vicksburg, Miss.

Word of the sales came as the company made a crucial $46 million interest payment Monday on its credit agreement and said it was working on reaching a deal with its lenders that would prevent it from filing for bankruptcy.

The sale of all three properties is "expected to be sufficient to pay Tropicana's outstanding senior debt," the company said in a statement. "Any remaining proceeds will be reinvested in the company's business."

Columbia Sussex is a privately held company but has more than $2.4 billion in publicly held debt, much of it coming from its $2.75 billion purchase of the Aztar Corp., which was completed in January. Last week, the company said it might be forced to file for bankruptcy protection because its bonds might be considered in default. The company filed a lawsuit last week to appeal the New Jersey ruling.

Zarnett didn't think Columbia Sussex will get the matter reversed.

"Overturning the commission's decision will be highly unlikely given the fact the decision rests on the applicant's ability to demonstrate competent business operating ability and character," Zarnett said in an investors note after the ruling.

The Tropicana Atlantic City was put under the control of a trustee, and gaming regulators are formulating a process for selling the 2,129-room hotel-casino, New Jersey's largest. Zarnett said bond holders are concerned because Columbia Sussex won't have any input in the sale.

"Many details remain unclear as we are now in virgin territory," Zarnett said.

According to Zarnett, the Tropicana Atlantic City accounted for almost 40 percent of Columbia Sussex's cash flow in the 12 months that ended Sept. 30. Operations at the Belle of Baton Rouge provided approximately 13 percent of the company's cash flow during the same time frame while Casino Aztar was responsible for 12 percent.

It was unknown Monday what action gaming authorities in Louisiana and Indiana might take. An e-mail to a spokeswoman for the Louisiana Gaming Control Board went unanswered. A spokesman for the Indiana Gaming Commission declined to comment.

Nevada gaming regulators plan to review the transcripts of Columbia Sussex's multiple hearings in front of the New Jersey Division of Gaming Enforcement and the ruling by the commission. Gaming Control Board member Mark Clayton said Monday the agency needs to determine if Columbia Sussex violated foreign gaming provisions of Nevada's Gaming Control Act.

The leadership of Culinary Local 226 believes New Jersey's actions should cost the company its gaming licenses in Las Vegas. The union represents workers at the Tropicana, the only union-represented hotel-casino on the Strip that has not reached a new collective bargaining agreement with the labor organization. A negotiating session has been scheduled for Jan. 10.

"I think perjury would be a reason to revoke a gaming license," Culinary Secretary-Treasurer D. Taylor said Monday. "The real question is what the Gaming Control Board is going to do here. Doesn't what happened in New Jersey have ramifications here?"

Last week, Control Board Chairman Dennis Neilander said gaming agents had stepped up their presence in Nevada casinos operated by Columbia Sussex, but internal audits had not found any "material violations" of Nevada gaming regulations.

In addition to the Tropicana, the company owns The Westin, River Palms and Tropicana Express in Laughlin and the MontBleu and Horizon in Lake Tahoe.

New Jersey gaming authorities took away Columbia Sussex's license, saying the company failed to meet the state's strict licensing requirements. Commissioners said the company showed "a lack of business ability, a lack of financial responsibility and lack of good character, honesty and integrity."

It was the second time in the 29-year history of legalized gambling in New Jersey that the commission has denied a license.

The Associated Press contributed to this report. Contact reporter Howard Stutz at hstutz@reviewjournal.com or (702) 477-3871.