Caesars Considers Closing New Jersey Casino
With land-based casino revenue in Atlantic City continuing to underperform, Caesars Entertainment may look at shutting down one of its four New Jersey casinos.
Caesars, Harrah’s, Showboat and Bally’s are the company’s four brick and mortar gaming properties on the Eastern seaboard and all had a dismal 2013 that saw revenue drop in Atlantic City for a seventh consecutive year. As a cost-cutting measure, one of them may be shuttered, the Press of Atlantic City reported.
Without naming which of the four is under the most scrutiny, Caesars CEO Gary Loveman mentioned during an earnings conference call that the company is
looking at all of our options with regard to New Jersey operations and a desire
to reduce the cost of doing business here.
Bally’s took the biggest hit in last year’s revenue numbers, dropping 17% from the year before. The Showboat was not far behind with a 14% decline. But the decrease was not limited to only Caesars’ properties, as the Atlantic City gaming industry collectively reported its lowest revenue in 25 years, taking in only $2.86 billion.
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Gambling expansion in nearby states, Pennsylvania in particular, has been the main reason for New Jersey’s revenue slump. The enactment of online gambling legislation in New Jersey last year was done partly to offset those losses.[geolink href=”https://www.usafriendlypokersites.com/pennsylvania-online-gambling-study-proves-positive/”]Pennsylvania released an extensive gambling study[/geolink] on Wednesday in which it was admitted that Keystone State gaming revenues benefited greatly by drawing gamblers from other states such as Delaware, West Virginia and New Jersey. The Garden State has considered opening a casino in the northern region of the state in order to keep some of its residents from hopping the border in order to gamble.
However, Governor Chris Christie has vowed to hold off expanding land-based gambling to other areas of the state until 2016 to permit Atlantic City an opportunity to right its ship in terms of falling revenue.
Despite the closing of the Atlantic Club earlier this year that reduced New Jersey’s casinos to 11, it appears that the market remains over-saturated. Following a bankruptcy auction, Caesars and Tropicana acquired the Atlantic Club late last year only to strip it for parts and lock the doors. Caesars holds the deed to the property, but has yet to reveal its plans for that location.
Loveman cites the opening of the Revel Casino Hotel in April 2012 as perhaps a bad idea that did nothing to help the market, instead taking business from existing casinos.
Only two of Caesars’ four casinos have been issued permits from state gaming regulators to operate online poker and gambling sites. Caesar’s and Bally’s are licensed for Internet gambling, while Showboat and Harrah’s are not.