(Adds Atlantic City mayor quote, background on gaming in U.S.)
By Barbara Goldberg and Sruthi Ramakrishnan
June 27 Caesars Entertainment Corp.'s
decision to close its Showboat casino makes it the second
gambling house shuttered in what New Jersey Governor Chris
Christie had called a crucial year for the future of gambling in
Debt-strapped casino operator Caesars said it would shut the
Showboat in August because of falling revenue and high property
tax in Atlantic City. It will be the second to close this year,
after the Atlantic Club Casino Hotel closed its doors in
The closure will reduce to 10 the number of casinos in the
Jersey Shore city, down from 12 last year, when Christie said he
would consider allowing casinos to be built elsewhere in New
Jersey, possibly in the Meadowlands, if the sagging gambling
industry failed to show signs of revival in 2014.
Revenue from Atlantic City has declined by more than $3
billion since 2006 as competition has grown, Caesars Chief
Executive Gary Loveman said in a statement.
With more states embracing legalized gambling, including
online gambling, customers and revenues are being stretched in
Atlantic City and elsewhere in the United States, said Jeff
Guaracino, chief strategy officer of the Atlantic City Alliance.
"What you have here is a gaming issue nationally. This isn't
an Atlantic City issue, (it's) the rapid expansion of gaming in
the United States, yet gaming revenues have not be able to keep
up," Guaracino said.
Delaware's Senate this week approved a nearly $10 million
financial bailout for the state's three casinos. In Tunica,
Mississippi, Caesar's closed its Harrah's Casino Tunica this
month after a county-wide decline in gambling tax revenues from
$47.3 million in 2006 to $28.3 million in 2013.
Amid the nation's shifting gambling tableau, Atlantic City
is finding new footing to attract different kinds of tourist
dollars, with Caesar's building a conference and convention
center and large-scale retailers such as Bass Pro Shops moving
"Atlantic City is creating new jobs, building new
attractions and diversifying our economy beyond just gaming,"
said Mayor Don Guardian.
Caesar's brought the Mardi Gras-themed Showboat property
into its fold when it bought Showboat Inc for about $512 million
in 1998. It also took on about $635 million of Showboat debt in
Caesars said on Friday it would provide preference to the
displaced Showboat employees for available positions at its
other three properties in the city. The company had about 68,000
employees at the end of last year.
The company operates 40 casinos in the United States and 14
outside the country, according to its website.
The 108,900-square foot Showboat property has 1,330 hotel
rooms and suites.
In May, Caesars reported a 14 percent drop in revenue and
$50.2 million loss from operations from the city in the first
Overall, revenue dropped 2 percent to $2.1 billion for the
company. Atlantic City accounted for 15 percent of the total.
The company has $23 billion in debt, and is likely to enter
into a restructuring agreement with bondholders within a year,
Loveman said on Thursday.
Caesars' shares were little changed at $17.61 on the Nasdaq
(Editing by Bill Trott)