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September 18, 2014

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Caesars’ CEO says Atlantic City has too many casinos

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Mel Evans / AP

The Revel casino is seen Thursday, Feb. 14, 2013, in Atlantic City.

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In this Feb. 14, 2013, file photo, the Atlantic Club Casino Hotel is seen in Atlantic City, N.J. On Jan. 12, 2014, customers and employees spent a final few hours at the casino, which closed after midnight.

ATLANTIC CITY — The CEO of Caesars Entertainment says Atlantic City has too many casinos and one or more of them needs to close.

During an earnings conference call on Wednesday, Gary Loveman said that Atlantic City has been the biggest problem for his global casino company for the last several years and that one option is to reduce capacity. But what he didn't specify — and what Caesars would not clarify afterward — was whether one of its four Atlantic City casinos should close or whether it might seek to buy one of the seven casinos owned by other companies and put it out of business, like it did in January with The Atlantic Club Casino Hotel.

"There's much too much capacity in Atlantic City currently," Loveman said. "We've experienced that as the largest provider. So we are looking at all of our options to continue to reduce the cost of doing business here."

Caesars Entertainment and Tropicana Entertainment made a joint bid on the Atlantic Club when it was in bankruptcy court, stripped it of assets including slot machines and other equipment and shut it down on Jan. 13.

Caesars Entertainment continues to struggle with a mountainous debt load of $23 billion and is taking numerous steps to whittle that down, including selling off assets. It recently sold the Claridge hotel tower of its Bally's Atlantic City property to a Florida company and sold the Atlantic City Country Club to a private buyer. It also is closing a casino in Tunica, Mississippi.

Company spokesman Gary Thompson said Thursday that Caesars would first look to sell one of its Atlantic City casinos before deciding to close it. But he stressed that such a course is only one of many options.

He also said a new convention center the company is building in Atlantic City should help invigorate the market by increasing midweek visits, which are typically slow.

Options abound for either course of action the company might pursue in Atlantic City. The Showboat Casino Hotel took in the lowest amount of money last year among the company's four New jersey casinos at $225 million, a decline of more than 14 percent, and would appear the most likely of the four to be sold or shut down.

But other companies' casinos did even worse and could become targets for purchase and closure. Revel Casino Hotel is seeking a buyer as it tries to avoid a second bankruptcy filing. Resorts Casino Hotel, Trump Plaza Hotel and Casino and the Golden Nugget Atlantic City all took in less money last year than any of the Caesars casinos. A proposed sale of Trump Plaza for $20 million fell through last year.

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