Another devastating blow is on the cards for Atlantic City, as workers at the Showboat receive notices warning the casino may close in two months, a legal requirement ahead of a business foreclosure. It comes as operator Caesars Entertainment looks to streamline its business in the dwindling gambling town.
Operating for more than 27 years, the property has reported shrinking revenue amid a glut of casinos and weak consumer spending. For the first quarter of the year, the facility has taken $66.2m from gamblers, down almost 16pc from the same 2013 period and ranking it seventh out of Atlantic City’s eleven casinos. More than 2,000 employees would be out of work should the facility close, indicated a union representing the casino workers.
“We were notified earlier today from Caesars that they’re issuing WARN Act notices to Showboat employees tomorrow [June 27],” commented Bob McDevitt, Unite HERE Local 54 President, “and we started notifying our members. For a company like Caesars to shut down a profitable casino with positive profitability is a crime against the entire community in Atlantic City.”
But Caesars, which owns four casinos in Atlantic City, warned just last month that it is looking at ways to reduce capacity in the struggling market. “We are looking at all of our options to reduce the cost of doing business here,” explained CEO Gary Loveman, after reporting this year’s company-wide first quarter loss. “These markets can reach points when no new supply is the right answer. In some cases, reducing supply is the right answer.”
The Las Vegas-based casino operator and largest in the US, reported that its first quarter loss widened to $386.4m from $217.6m during the same 2013 period. Caesars has been avidly restructuring its finances over the past year and announced in March that it would close another property in Mississippi.
If the Showboat closes, it would be the second so far this year, after Atlantic Club Casino shut its doors in January, putting more than 1,600 employees out of work. Revel Casino Hotel is also on the verge of closure and filed for its second chapter 11 bankruptcy protection last week.
Showboat Atlantic City – Website: ShowboatAC.com