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US – Caesars considering Atlantic City sale

By - 12 May 2014

Caesars Entertainment, the largest operator of casinos in Atlantic City, is looking at how it can lessen the impact its New Jersey properties have on its results, with options believed to include selling and even shutting one of the East Coast properties down.

Caesars’ CEO Gary Loveman said: “There’s much too much capacity in Atlantic City currently. We’ve experienced that as the largest provider. All the businesses in A.C. are under tremendous pressure. We are looking at all of our options to reduce the cost of doing business here.”

With its first-quarter loss widening to US$ 386.4m from US$ 217.6m, Caesars has already said it will close a venue in Tunica, Mississippi, which according to Mr. Loveman could set a precedent for other struggling markets including Atlantic City.
“These markets can reach points when no new supply is indeed the right answer,” he explained. “In some cases reducing supply is the right answer.”

Caesars operates four casinos in Atlantic City; Caesars, Bally’s, Harrah’s and Showboat.

It has already taken steps to reduce costs, such as reducing restaurant hours. It has also offloaded the Claridge hotel tower at Bally’s Atlantic City to a Florida company and sold the Atlantic City Country Club to a private buyer.
Caesars’ spokesman Gary Thompson added that Caesars would initially try to sell one of its Atlantic City properties before potentially closing it if there was no interest. He believes that a new convention centre being built by Caesars will invigorate the market by increasing midweek visits.

The Showboat brought in the lowest revenues last year with its $225m representing a decline of more than 14 per cent. Any sale though could face competition from other sales. Revel is seeking a buyer as it tries to avoid a second bankruptcy filing whilst a proposed sale of Trump Plaza for $20m failed last year.

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