Gaming companies have been under severe pressure, and the Wall Street Journal reports after hours tonight that Tropicana Entertainment LLC is filing for bankruptcy protection.

Kentucky-based Tropicana — with a small casino kingdom that includes the famed Tropicana Resort & Casino in Las Vegas and a host of small regional casinos — missed an interest payment Friday on a $1.32 billion loan with lender Credit Suisse Group, said two people familiar with the matter. Tropicana isn’t expected to make the payment, these people said. Missing the payment terminates a forebearance agreement the company had with bondholders, putting further pressure on the gambling company (WSJ.com).

The Business Courier of Cincinnati had a story on the Cincinnati-based firm last week, laying out the company’s struggles with bondholders to force the firm into bankruptcy to gain access to the lucrative land under the Tropicana in Las Vegas. The company’s press release regarding the filing and pending reorganization.

EDIT

NY Times article: Economic Troubles Affect the Vegas Strip

“We’re heading into the worst economic crisis in a half century or more.” Robert Reich’s Blog

My post in January, What Should I Do in a Recession?, has been by far the most popular post this year. In it, I highlighted some steps you and I can take as the recession approached:

• Aggressively reduce debt
• Find one-three additional revenue streams
• Prepare your resume for August 2008 and June 2009
• Make the switch if you’re thinking about it
• Celebrate life
• Acquire opportunistically
• Wait a bit longer, then spend on advertising and marketing
• Don’t shrink away at work
• Hold off on toys
• Take the losses

As we’ve gone from a fear of recession to living in the midst of one, here are a few small and big ideas to make certain you emerge from the end of this downturn in decent shape. Some of these may seem flippant and irrelevant, yet many of these can be very powerful as catalysts toward lifestyle change.

1. Set a cost-cutting goal with your entire family I’ve decided a fairly ambiguous one to tackle that will involve everyone is our home energy bill (electricity and gas). It is ambiguous as our older two boys (12 and 10 years old) have never seen an electric bill nor can they easily see their actions turn into cash. There are many things they can be involved in to reduce our energy consumption, many things we all can do. Our goal will be a 10% reduction for the next billing cycle. If they can do it, I’ll split the 10% between our two oldest boys.
2. Measure your costs If you haven’t looked at your year-to-date costs, then do so. We use Quicken, which makes it much easier. Look at where your money is going at an aggregate level with an item-by-item scrutiny.
3. Set a cost-reduction goal for Q2 If you need to look at last year’s financials to determine if you have any April-June special costs, then do that. Then set your monthly and quarter goals. Use this business best practice as you set the goals: a target and a stretch goal. The target is a goal that you feel 90% confident that you can reach, while a stretch goal is a level that you know will hurt, will cause lifestlye change, and you feel 40-60% confident that you can reach.
4. Start a Cost Avoidance Bank Find a big bottle you can see and start filling it up anytime someone in the family makes a decision that eliminates an expense item for the day. Examples of expense items can include eating out, a car trip somewhere that is foregone (a previously irrelevant cost that has now become very tangible and easy to measure), or some regular activity that is skipped or eliminated. Take the amount of money saved each day or couple days, put the actual cash in the bank, and record it with a graph.
5. Celebrate small wins One of the toughest parts of change on a big scale is momentum, especially if the goal is ambitious and forward looking. Set a goal for this week or next, and have something that you delight in that you and your family will receive if you achieve your interim goal.
6. Save ten hours of wasted time next week This is such a tough one for me to even contemplate, but it means moving minutes and hours away from leisure things and putting them toward productive actions (whatever they may be). Try to simply estimate what activities take your discretionary time and find ten hours starting Monday for the next week. It will be painful yet eye-opening.
7. Strengthen your network This is even tougher for me than #6 as I absolutely hate what I consider traditional networking (e.g., networking meetings, phone calls, etc). Having said that, take specific actions to add to your network and strengthen your existing list of contacts. Build a database, set goals of contacting 1-5 people a day/week, call someone from outside of your company for a drink/coffee/meal.
8. Use your cash If you have cash or can get your hands on it, you have a powerful bargaining weapon in your personal and professional life. Use it. Pay upfront for 10-25% discounts, as well as negotiating better products and services. Pay upfront for longer-term services if you have confidence the provider will be around.
9. Build your cash On the flipside of this, work hard to build a liquid cash reserve to give you the flexibility to make good decisions, avoiding choices based on desparation.
10. Appraise your assets If you haven’t already, take valuables like jewelry to a trusted jeweler and have them appraised. Catalog your items in a spreadsheet or in your financial software. Look at your insurance and be certain your possessions are protected.
11. Protect your assets Assume that burglary will increase in your neighborhood, because it will. Get whatever devices you need then create new habits to protect your most valuable items.
12. Liquidate your assets One of the hottest new ways to do this is the Gold Party. You invite a local jeweler to your home and invite friends to bring gold jewelry (especially if you or your significant other has gifts from previous relationships), and the jeweler buys you and your friends’ stuff. With gold at $917/ounce, it doesn’t take much to add up to an extra $500 or $1k.

My brother, a Ph.D. Economist at Baylor, sent me to Intrade. This site is a prediction market, where buyers and sellers can bid on the likelihood for certain events to occur. Currently, the US will go into recession in 2008 is trading at 73 (meaning there is a 73% likelihood that this will occur). Note the definition of recession given: For expiry purposes, a recession is defined as two successive quarters of negative real GDP growth.

I’ll let more knowledgeable folks get into the nitty gritty of what’s going on, why we’re in this mess, how long will it last, and what happens at the other end. In my view, we’re going to see a few things in 2008:

>> The dollar won’t gain significant strength vs the Euro and major Asian currencies
>> Oil prices are going to stay in the $80-120 range
>> Price increases are going to continue to be commonplace in the consumer marketplace, especially tied to scarce recources (stagflation condition)
>> The housing and sub-prime crisis hasn’t shoved fully through the economy

So what do you and I do during these times? Here are a few ideas to consider.

1. Aggressively reduce debt Take a good, hard look at your short-term liabilities, including credit cards. Set aggressive goals to cut your expenditures, increase your savings and available credit, and work hard to eliminate any debt with high interest rates.
2. Find one-three additional revenue streams This could be a side business, a part-time position, selling of stuff that you can produce or obtain (excluding theft). Start building now in the event that you need to ratchet up one or more of these sources quickly.
3. Prepare your resume for August 2008 and June 2009 This isn’t a typing and formatting exercise. What do you want it to look like after the first half of this year? What can you get done over the next eighteen months? Be prepared as companies will accelerate layoffs under the earnings pressures to come. If your company is struggling, now is a great time to start networking. It is always easier to find a job when you have one.
4. Make the switch if you’re thinking about it Have you been pondering taking a new path in your career, say switching to being and educator or heading to Healthcare? Figure out how to start back into educating yourself as soon as possible so that you’re ready with new skills in 1-3 years.
5. Celebrate life While you cut costs, find fewer better things to do with your time and resources. Cook and over-the-top gourmet meal once a month. Take only one big trip but make it the best one ever. Take on a new hobby that interests someone else important to you. Shut off your computer two days a week when you aren’t working. Use this time as a time to energize the health of your relationships and yourself.
6. Acquire opportunistically There will be deals to be had, so find some resources to take advantage of them. This means that you’ll have to spend more time being sure you know whatever it is that you’re focused on (so that you know when the deals are great or when you’re the sucker). This year will be a year of the buyer for many, many things if you have the resources deploy. Find some resources to deploy and get after.
7. Wait a bit longer, then spend on advertising and marketing These are the prime areas to cut in most businesses, which means these are the prime times to get great deals as well as to stand out in whatever industry you are in. If you are in the advertising and marketing industry, this will be a time where ROI and creativity will be king.
8. Don’t shrink away at work Benjamin Franklin, in his autobiography, said that he carried a large package across the streets in the morning then returned with it in the afternoon. The purpose was to give the impression that he was a hard worker. Now is the time to be a hard worker. Take on more responsibility and don’t quibble about whether you should be paid for it. Become indispensable and visible. Make absolutely sure that whatever you do is contributing directly to the success of your company. Find cost savings each month, no matter how trivial. Run with growth ideas.
9. Hold off on toys Even if the next plasma screen or iPhone looks enticing, just say no. Liquidity is more important than being cool.
10. Take the losses Sell whatever you were going to sell at the best price you can get. It won’t get any better later.
Bonus for parents Teach your kids what’s important in life Don’t let this be a time that breaks your family apart or tears down your marriage. Show your kids how irrelevant things are, how unimportant what everyone else has is to your self-worth, how important intimacy and involvement are in the lives of your family. Use this time as a time of rebirth for your loved ones rather than a time of tremendous stress.

2008 is going to suck, make no mistake. You can navigate through this if you start now!