Atlantic City Now Loses The Showboat CasinoJune 27, 2014 1:13 pm
New Jersey may have pushed for online gambling in order to prop up its shrinking gambling market, but the situation continues to decline in Atlantic City. Six months ago the Atlantic Club Casino Hotel closed its doors at a loss of 1,600 jobs, while recently we learned AC’s $2.5 billion resort Revel has filed for Chapter 11 protection putting a further 3,140 jobs at risk.
If all that wasn’t bad enough, now Caesars Entertainment’s Showboat Hotel and Casino has announced it intends to also shut shop, in the process adding another 2,100 people to the local unemployment queue. Nevertheless, the signs were all there in May when Caesars Entertainment chief executive officer Gary Loveman said during a conference call:
“These markets can reach points when no new supply is indeed the right answer. In some cases reducing supply is the right answer.”
Atlantic City’s casino market has been contracting since reaching a peak of $5.21 billion in 2006 and last year revenues plunged below the $3 billion mark for the first time, as competition from neighbouring Pennsylvania, Maryland, and Delaware bit ever deeper into its business. Initially, Gov. Christie had touted online gambling as a possible cure for AC’s woes but so far revenues have proven but a tenth of his original $1 billion forecast, with igaming revenues, too, starting to trend downwards over the past couple of months.
Likewise, the Showboat Hotel has also seen its revenues plunge in recent years and in Q1 2014 reported a 77% fall in gross operating profit to $2 million, compared to the $8.5 million taken in Q1 2013. So far this year, the Showboat has reported a 16% decline in revenues compared to the same period last year.
Caesars owns four Atlantic City casinos, and as well as being its poorest-performing premises,The Showboat Casino is also ranked seventh out of AC’s 11 casinos. However, the news of its imminent closure was received with alarm by Unite HERE Local 54, the union representing the casino workers, with its president Bob McDevitt, commenting:
“I know that the workers are getting issued WARN Act notices tomorrow. We were notified by the company today and we began notifying the workers immediately..Caesars closing a casino which remains profitable with positive [earnings] is a criminal act committed on the people of Atlantic City.”
The property is located at 801 Boardwalk and when it opened 27 years ago was known as the Showboat Casino, Hotel and Bowling Center, offering at the time gambling as well as a 60-lane bowling complex.