Atlantic City’s casinos have been in trouble for some time now and hopes that legalising online gambling with partnerships between licensed online casino operators and the city’s land based casinos would improve the situation have not so far materialised. Until January 2013, Atlantic City had 12 land based casinos but the Atlantic Club Hotel Casino closure brought this number down to 11. Of the remaining 11 casinos, six have reported losses in the first quarter of this year and the Revel Casino Resort has recently declared itself bankrupt for the second time in its short history and it is now up for sale. Against this background, Caesars Entertainment has announced that it will be closing the Showboat Atlantic City Hotel and Casino.
Caesars to reduce its presence in Atlantic City
In May, a Caesars’ spokesperson claimed that the company was trying to reduce the cost of operating its casinos in Atlantic City and that one way of doing this was to reduce the number of casinos it operates. The company has informed the Showboat Casino Hotel’s almost 2000 workers that the casino hotel will cease operations at the end of August 2014. The Showboat has been open since 1987 and in the last ten years it had greatly increased its capacity with over 1 300 hotel rooms and a casino of almost 12 000 square metres offering the full range of table games including blackjack, baccarat and roulette and also over 2 500 slot machines.
Profitable but still to close
The irony of the situation facing the showboat is that it made an operating profit of almost 2 million dollars in the first quarter of this year but this needs to be compared to the profit for the same time last year which was 8 and a half million dollars. With a 77 per cent loss, Caesar’s entertainment has decided that the Showboat Hotel and Casino is to suffer the same fate as the Atlantic Club Casino Hotel which it closed down in January 2013 shortly after the company bought it. If Atlantic City’s Revel Casino Resort, which is now going through bankruptcy proceedings does not find a buyer by August, it will also close so that may reduce the number of casinos remaining in the city to just nine. Revel employs just under 4 000 full and part time workers and the Showboat has 2 100 workers so the closures will be a huge blow for the city’s gambling industry.