eNews Story Updates: Spanish Tech Bankruptcy Made Official, Another Gaming Shutdown

Two high profile stories in the latest edition of eNews saw some significant developments this week. As noted in “Spanish Scandal Highlights Risk of Overrelying on Financials," Gowex, a provider of Internet hotspots internationally, was ready to file for bankruptcy. That filing became official Monday and is being handled by the law firm Velez & Urbina. The insolvency comes in the wake of an admission by its chairman that financials for the Spanish company had been falsified for roughly four years. The Gowex scandal started when a group of high-level investors, operating as Gotham City Research LLC, outed the company, challenging its financials and abilities to generate the profits it claimed. Gotham City, while controversial, read between the lines, in essence.

Meanwhile, oversupply in the US gaming industry, especially in the northern half of the Eastern Seaboard, was again documented in “Industries to Watch: More Gaming Troubles.” Since then, Trump Plaza, a centrally located gaming operation on Atlantic City’s famed Boardwalk for decades, shockingly announced it would be closing permanently this fall.

Sources within the industry previously noted in NACM publications that at least three to five casinos would need to close in the US Northeast by 2015, primarily in Atlantic City, NJ, for the existing properties to have a realistic chance of success. Since those assertions, voiced in early 2013:
  • Atlantic City’s Revel entered bankruptcy twice and was still scrambling for a buyer this July, with the possibility of a full closure looming less than two years after its glitzy opening.
  • Revel's neighbor, Showboat, announced it will cease operations at the end of August so that its parent company (Caesar’s Entertainment Group) can concentrate on its three other properties in the city.
  • The closure of Atlantic Club, a former Hilton-owned gaming operation located less than a mile away from the two previously mentioned casinos, was completed this spring.

- Brian Shappell, CBA, CICP, NACM staff writer

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