Atlantic City Must Now Turn the Page as Showboat Officially Closes
Atlantic City residents probably felt as if they awoke on Sunday to find that what they thought was a vivid nightmare was in fact their reality. The hypothetical situation they dreaded started to become a reality on the Sunday of Labor Day Weekend, when the Showboat Casino in Atlantic City closed its doors for the first time in its 27-year existence.
By 2 PM staff started prepping for the close; by 3 PM the casino was empty; and at 4 PM the Showboat Casino was officially closed according to the Press of AC. Longtime customers, current employees, ex-employees, and even some people that were both customer and employee, said their final farewells to the Mardi Gras themed casino that many thought of as a home away from home.
A handwritten sign on the door, noticed by the Press of AC, summed up the general malaise quite poignantly: “Goodbye Showboat. Thank you Showboat employees. You’re the best!! You deserve better!!”
It was a funeral-like atmosphere, and that atmosphere is likely to continue over the next few weeks.
The Showboat’s closing on the Sunday before Labor Day of all days seemed almost as if it was mocking the residents of the city, as the Showboat is just one of three AC casinos slated to close in the coming weeks. Closings that will cost the city thousands of jobs and take many out of the labor force.
The Press of AC cited Caesars CEO Gary Loveman as saying, 400 of the Showboat’s 2,000 employees will be moved to other Caesars casinos in Atlantic City, leaving some 1,600 people headed for the unemployment rolls.
2014: The year of contraction in AC
Unfortunately the contraction in Atlantic City had to happen.
The Showboat is the second of four closures expected in 2014.
In January the Atlantic Club was closed after Caesars and the Tropicana (who were awarded the winning bid on the bankrupt property back in December of 2013) more or less looted the property of any usable assets and then shuttered the doors.
The 1,200 employees of the city’s oldest casino certainly had their lives upended, but the real pinch didn’t happen until a blistering series of events that led to the announced closing of the Showboat, the Trump Plaza, and the Revel. The Atlantic Club was merely the appetizer.
The Revel is of course the most surprising closure of the group (although the around break-even Showboat also shocked many), as the $2.4 billion monstrosity opened its doors in 2012 and was supposed to reinvent gaming in Atlantic City. Unfortunately the casino hasn’t managed to have a single profitable month in its short existence, despite already going through bankruptcy restructuring once already, the casino was still losing over $20 million per month, with no reasonable chance to turn things around.
With over 3,000 employees, and with the state having invested some $600 million to complete the project (in exchange for a significant percentage of the Revel casino’s expected revenue) the failure of the Revel is a major blow to New Jersey on several different levels.
The hope is the city can now reinvent itself behind the remaining casinos (which should see an uptick in revenue after 25% of the city’s casinos closed in 2014) and perhaps with a new outlook as a family-friendly vacation town instead of simply being the East Coast gambling destination.
Rising from the ashes
On the bright side, the closing of these properties should be a huge boost for the remaining properties in Atlantic City —Trump Taj Mahal, Borgata, Caesars, Harrah’s, Bally’s, Tropicana, Golden Nugget, and Resorts— who not only have less competition, but are also starting to see the fruits of their online gambling labors.
Perhaps these additional revenues will lead to a hiring spree?
With that being said, most analysts feel further contraction is necessary, and the Revel, which opened just two years ago, is a beautiful property that is unlikely to be demolished or refitted as something other than a casino.
The current situation in Atlantic City wasn’t exactly unexpected, but the abruptness with which several of these properties made the decision to close their doors within weeks of one another has left the city reeling and their future uncertain.
The city, and the state for that matter, must now decide how to move forward, and whether Atlantic City’s gambling monopoly will continue, or if the state will open up casino expansion to other locales such as the Meadowlands Racetrack in Northern New Jersey.
