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Thread: Caesars Says It Will Close Showboat

  1. #1
    http://abcnews.go.com/US/wireStory/a...ugust-24330775



    Casino contraction hit Atlantic City again Friday, as the parent company of the Showboat Casino Hotel announced it will close the Mardi Gras-themed casino on Aug. 31

    Caesars Entertainment told The Associated Press on Friday morning the company will shutter the poorest-performing of its four Atlantic City casinos.

    CEO Gary Loveman said in a statement that the "difficult decision" is necessary to protect the rest of its business in Atlantic City, where it currently owns four of the 11 casinos.

    "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. "Since 2006, revenue in Atlantic City has declined by more than $3 billion and competition in the city has increased. The dynamic in Atlantic City has led us to the difficult but necessary decision to close Showboat.

    "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," he said.

    The closing will also shutter the casino's House Of Blues, one of New Jersey's most popular concert venues.

    It will be the second casino to close this year in the nation's third-largest gambling market. The Atlantic Club closed in January, taken down in a bankruptcy sale by Caesars Entertainment and Tropicana Entertainment, who stripped it for parts and closed it to reduce competition.

    And, Revel Casino Hotel has warned it might shut down if a buyer can't be found in bankruptcy court.

    Bob McDevitt, president of Local 54 of the Unite-HERE casino workers' union, said he planned to spend the next few days talking with Showboat employees.

    "I'm heartbroken and angry, too angry to respond in an effective way," he said.

    Thursday night, when he revealed that Caesars planned to issue warning notices to Showboat workers that the casino might close, McDevitt called the company's threat to close a profitable casino "a criminal act."

    Caesars said the Showboat will remain fully operational until Aug. 31. Guests with reservations after that date will be assisted in finding new accommodations, Loveman said.

    He also said the company will work with the casino's more than 2,100 workers to help them find jobs with other casinos Caesars Entertainment owns in New Jersey and elsewhere.

    In addition to the Showboat, Caesars Entertainment owns Harrah's Resort Atlantic City, which ranks second to the Borgata in the amount of money won from gamblers each month, Caesars Atlantic City, and Bally's Atlantic City. It also owns a casino in neighboring Pennsylvania.

    Perhaps sensitive to criticism over the shutdown, Loveman said Caesars remains the largest casino owner in Atlantic City and is working to improve the resort.

    "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, including recently overhauling the gaming floor at Bally's and investing in new dining options throughout the company's Atlantic City footprint," Loveman said.

    The company has not yet determined what will become of the Showboat property and land at the northern end of the Boardwalk, next to Revel.

  2. #2
    As bad as AC has been in recent years, the 20%+ loss in gaming revenues from last year is stunning. CET goes from bad shape to worse.

  3. #3
    That's too bad. I've stayed at the Showboat numerous times over the years. It was a bit far away from the rest of the action, but it was always easier to score comps there. I hoped the Revel next door would have revitalized that end of the Boardwalk, but it looks like nothing will do that now. I guess the Trump Taj Mahal will benefit.

  4. #4
    Originally Posted by redietz View Post
    CET goes from bad shape to worse.
    I wonder if in some twisted way, the closing of this property and the spin-offs of Caesars wholly-owned properties into these new "special partnerships" that are being created might actually help CET survive? It is clear that this company is in trouble... serious trouble. They could be shuffling the cards to protect as much as they can in a bankruptcy, or they might be really trying to raise money to prevent one.

    There is certainly a lot to be concerned about.

  5. #5
    People much smarter than me have speculated that the private equity firms that have invested as "partners" in CET are just waiting for CET to hit bankruptcy and sell off various properties like Rio and Planet Hollywood, which then would be snatched by private equity (AKA NY real estate dudes) without CET ties at bargain rates. The implication is that the "investments" by private equity are mainly to steer the CET decision-making. Is that even possible?

  6. #6
    But no one wants the Rio.

    I edited this to expand my thoughts:

    About a year ago I had dinner with a top executive at CET and we talked about The Rio. It is a property that they want to sell -- but they really can't. The reason why they can't sell The Rio is that anyone who wants to buy The Rio would be buying it because of the business that is linked to the WSOP. But Caesars would not keep the WSOP at The Rio -- it would be moved.

    Caesars Palace, for example, not only has many large ballrooms, but it also has a large convention center that is pretty much unused. The convention center is behind the pools. Last time I was in it was for a giant New Year's Eve event.

    So without the WSOP, the value of The Rio is actually low -- and many gaming/hotel/casino companies have passed on the idea of buying The Rio unless the WSOP stayed there.

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