$270m Atlantic City Casino Land Sold For $30.6m

$270m Atlantic City Casino Land Sold For $30.6mGaming and hospitality company Pinnacle Entertainment had high hopes for Atlantic City and originally planned to build a $2 billion casino in the renowned east coast gambling resort. Those ambitions have now been shelved after Pinnacle Entertainment announced it is selling the site it originally paid $270 million for in 2006 for just $30.6 million.
The 20-acre plot of land originally was the site of the 532 roomed Sands Casino Hotel, which once boasted such entertainers as Frank Sinatra, Sammy Davis Jr  and Bob Dylan. However, over time Sands was eclipsed by Atlantic City’s other casinos and after falling into bankruptcy was eventually bought by Pinnacle Atlantic City in 2006.
Moving ahead with its plan, Pinnacle demolished the casino in 2007, but by 2010 officially announced it was no longer considering building a casino and was seeking  to sell the land, instead. Commenting on the company’s decision to sell the land, Pinnacle wrote in its filing: “Since that time, we actively marketed the Atlantic City operations. However, events and circumstances beyond our control extended the period to complete the sale of these operations beyond one year.”
Unfortunately, the difficulties faced by Pinnacle Entertainment in Atlantic City are typical of those encountered by other gambling businesses over the past few years. In 2006, Atlantic City’s gambling market was a robust industry worth more than $5 billion but has since steadily declined to just $3.1 billion last year.
The massively reduced sale price of Pinnacle’s land is representative of the distressed state of Atlantic City’s casinos industry as a whole, which has seen properties selling for just a fraction of their original prices. Recently, for instance, the $210 million Trump Plaza Hotel sold for a mere $20 million, while PokerStars is currently arranging to buy the Atlantic Club Casino Hotel for $50 million, which had sold in 1987 for  $440.

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