Caesars claims the closing of Showboat, its poorest performing casino hotel, will allow for growth and expansion of its three remaining properties, Bally’s Atlantic City, Caesars Atlantic City and Harrah’s Resort Atlantic City.
Showboat’s closing also marks the end of its House of Blues, a 2,400 capacity concert hall that served as a popular New Jersey venue for major performers since 2005.
Despite receiving the lowest capital investment of Caesar’s Atlantic City properties in the last two years, Showboat earned a gross operating profit of $2 million in the first quarter of this year. Caesars, Atlantic City’s largest casino-entertainment operator, invested $5.6 million last year renovating the casino floor of Bally’s, and is scheduled to open a $126 million conference center adjacent to its Harrah’s Resort Atlantic City.
Approximately 2,100 employees will be laid off.
"While we regret the impact that this decision will have on our Showboat associates, we believe this is a necessary step to help stabilize our business in Atlantic City and support the viability of our remaining operations in the vicinity," said Gary Loveman, CEO of Caesars Entertainment Corporation, in a statement. The corporation holds $24 billion in debt from a 2008 buyout.
New competition in neighboring states, such as Pennsylvania, Delaware, Maryland and New York, require a shift in the identity of the third largest gambling destination in the United States. Atlantic City Mayor Don Guardian claims Caesars, the city’s largest taxpayer, is responding to this evolving identity of Atlantic City.
“There is a pain as we get through this transition, but it’s critical that Atlantic City realizes that we’re no longer the monopoly on the East Coast for gaming,” Guardian said to KWY’s Cleve Bryan.
Showboat is the second Atlantic City casino to close in 2014, as the Atlantic Club Casino shuttered its doors in January. Neighbor casino Revel may soon become the third, claiming it will close by September 1 unless it can find a buyer. The privately owned casino is in bankruptcy court for the second time in two years.