Caesars’ Scuttles Struggling Atlantic City Showboat

Caesars announces closure of the Showboat Casino Hotel in Atlantic City as part of consolidation process

The gambling news in the US is not getting any better. When the Atlantic Club closed in January due to bankruptcy it was bought by Caesars Entertainment and Tropicana Entertainment, but didn’t reopen. They stripped it for parts and didn’t need the competition with their other establishments. Sadly now one of those self same establishments is to close it’s doors for good.

The Showboat Casino Hotel sits at the northern end of the Broadwalk in Atlantic CIty and in the first quarter of this year made a gross profit of some two million dollars, which doesn’t sound all that bad, until you realize they made eight point five million dollars in the same quarter last year.

Caesars has said the Mardi Gras themed Casino, and associated House of Blues, will remain open until the 31st of August whereupon the 2,100 staff will be assisted in finding other positions with the group that still owns three casinos in Atlantic City.

CEO Gary Loveman said it had been a “difficult decision” but one that was entirely necessary to protect the company’s position in Atlantic City in the long term. In evidence he pointed out that whilst competition in Atlantic City had increased revenues since 2006 had declined by some $3 billion.

Mardi Gras Goes To Ground

“While we regret the impact that this decision will have on our Showboat associates, we believe this is a necessary step to help stabilize our business in Atlantic City and support the viability of our remaining operations in the vicinity.” He said.

Showboat Sinks In Atlantic City
 
• 16% decline leaves few options

• US gambling laws may hamper recovery

• Broadwalk loses landmark

A situation underlined by the claims of Revel, another of the big Atlantic City players, who say if a buyer isn’t found soon they too will be closing. Atlantic City, it would seem, is having a hard time keeping up with the competition from online sportsbooks in the US and the rise of Macau and other eastern destinations.

As a major owner of gambling real estate in the city Loveman is all too aware of the impact this will have and sought to allay fears. “Caesars is developing a new, state-of-the-art meetings facility adjacent to Harrah’s Atlantic City, and is pursuing other opportunities to stimulate new visitation and growth,” he said.”

“This will include overhauling the gaming floor at Bally’s and investing in new dining options throughout the company’s Atlantic City footprint, We sincerely appreciate the service, dedication and professionalism shown by the employees of the Showboat over the years to provide our customers with incredible experiences.”

Atlantic city slumps

It remains to be seen if this is a sign of further consolidation amongst the fierce competition for dwindling revenues in Atlantic City. With only 10 major casinos left some are wondering how long it can remain a gambling hub in a global gambling market.

Thus far this year the Showboat has taken in some $66.2 million which made it 7th in the list of 11 casinos in Atlantic City, a decline of a lamentable 16% from the same period the year before, a slide that could neither be ignored nor cured.

Local union leaders described the closing of a profitable casino a “criminal act” and the president of the Unite-HERE casino worker’s union said he was “heartbroken” and “too angry to respond in an effective way.”

Unfortunately it would seem the Showboat Casino Hotel has floundered on the rocks of economic uncertainty and becomes just the latest victim of global trends and contracting local markets hampered by the strict US gambling laws. Whether these markets in the US, and indeed elsewhere, will recover over time is debatable, the competition isn’t giving them much hope.