Atlantic City Looks Grim; Las Vegas Starts to Grin

29 August 2014Printer Friendly VersionPost a CommentTell a Friend about this Article

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The Revel casino in Atlantic City announced on August 15 that it will be closing its doors on Sept. 10, over a week earlier than previously planned.  The casino, which had been seen as a last hope for the ailing Atlantic City casino industry, only stayed open for a little over two years. Despite a bankruptcy filing and a rebranding attempt, Revel was unable to stave off the onslaught from new competitors in neighboring Pennsylvania. Over 3000 casino and hotel workers will lose their jobs as a result of the closing.


The closure of Revel will bring the total number of planned Atlantic City casino closings for 2014 to four, representing a whopping one-third reduction in properties. The other three closures include the Atlantic Club, Caesars Entertainment's planned closing of the Showboat at the end of August, and the Trump Plaza's scheduled closure for Sept. 16. 


Unsurprisingly, this massive downsizing of the Atlantic City casino industry has put significant pressure on New Jersey Governor Chris Christie.  Casino workers turned up in great numbers at the governor's most recent summer town hall in Ocean City on August 14. Christie told the crowd that he couldn't force the casinos to stay open, but he announced that he will be organizing a summit on Sept. 8, which will include labor, political, and business leaders. The meeting will attempt to address the impact of competition from neighboring states on Atlantic City. 


This year's casino closures are having broader implications for Atlantic City's economy. Moody's Investors Service downgraded the city's general obligation bonds to junk status last month.  Investors have criticized Atlantic City for relying too heavily on gaming revenue, rather than diversifying to include more nightlife and special events. 


Meanwhile, the sun is shining brightly out in the desert of Las Vegas, where casinos are reveling in a recovery. As reported in a previous article, ‘business is booming’, with Sin City on a record-setting pace so far this year.     


And the city's prospects have continued to shine brighter, with Crown Resorts Ltd. announcing plans for a new Las Vegas Strip project on Aug. 4. Crown will be partnering with Andrew Pascal, former president of Wynn Las Vegas. The two have purchased a 35-acre parcel of land on the strip for $280M. The vacant site is the former location of the New Frontier casino.


The same parcel of land and the New Frontier casino had previously been purchased in 2007 by two Israeli companies. They paid a record-setting $1.24B and demolished the New Frontier, planning to build a $5B hotel-casino in its place. But the project fell through when the recession started.


While the Crown project is still in its infancy, another new Las Vegas Strip casino will be celebrating its grand opening on Aug. 23. The SLS Las Vegas, located at the corner of Las Vegas Boulevard and Sahara Avenue, will be taking over the building of the legendary Rat Pack casino, the Sahara.  All 1600 rooms of the original casino have been renovated and the new casino features 10 restaurants and three night clubs.



 



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