Industries to Watch Flashback: Monday Casino Shutdown Far From Shocking
The number of casino operations in Atlantic City and among nearby cities newer to the industry have increasingly threatened the solvency of gaming operations operating in a precarious cash position, especially in the traditional New Jersey gambling hub. Midnight on Monday marked the first major shutdown associated with that very glut, which was outlined by NACM’s Industries to Watch feature last February.
The Atlantic Club Casino, a gaming and hotel property formerly owned by the Hilton family, shuttered its operations permanently after selling off pieces of its assets post-bankruptcy to companies like Tropicana and Caesar’s Entertainment. Neither plans to resurrect gaming at the location, which was the farthest property south among nearly a dozen casinos that dot the famous Atlantic City Boardwalk. The demand simply doesn’t necessitate more supply thanks not just to an ongoing slow rebound from last decade’s recession and financial crisis, but simply the presence of too many players in the game.
Atlantic City casinos and hotels have continued to lose market share, especially in the winter months, as several East Coast states within driving distance have legalized gambling. For example, there are now six fully operational casinos within a 5- to 10-minute drive off the stretch of Interstate 95 between Washington, DC and Philadelphia, with at least two more set to open within the next year.
Patrick Spargur, ICCE, credit & collections manager with Bally Technologies Inc., suggested in an interview last February that shutdowns, liquidation and/or restructures should not be seen as anomalies for those on involved in East Coast, especially Atlantic City, operations, but rather, perhaps as a sign of things to come as the market shakes out.
“Analysts I follow say, in Atlantic City alone, three to five properties need to be either shut down or converted into boutique hotels,” he noted last year. And the situation really hasn’t improved in significant fashion.
- Brian Shappell, CBA, CICP, NACM staff writer