Gary Loveman, Chairman and Chief Executive Officer of Caesars Entertainment, announced with regret the closing down of Caesars’ Showboat Casino in Atlantic City, NJ. CEO Loveman is aware that the shutting down of the hotel casino will adversely affect the company’s Showboat associates. Yet it is a decision that they have been constrained to make in order to keep the company’s business stable as well as support the viability of their remaining casino operations in Atlantic City namely Harrah’s, Caesar’s and Bally’s.
Caesars attributes the decision to close, to the unrelenting decline of business levels in Atlantic City plus the high-property tax imposed by the city government. The gambling capital of New Jersey started experiencing revenue decline in 2006 by as much as $3 billion, aggravated by the increased competition brought on by new players in neighboring states.
Actually, Caesars’ Showboat is the second hotel casino business to close, to which Atlantic Club Casino became the first. Revel Hotel on the other hand, has sought protection against bankruptcy proceedings for the second time, and many expect that the high-end complex will end-up with the same fate.
The Showboat Casino traces its roots to the 1950s Las Vegas casino that first appeared in Nevada’s desert. In 1985, the original Showboat owners explored new horizons by building the Ocean Showboat, on the Atlantic City Boardwalk property leased from Resorts International. Originally, the Showboat resembled the structure of an ocean liner, considered at that time as one of the most ambitious hotel casino project.
In 1998, Harrah’s Entertainment, known today as Caesars Entertainment, acquired the 516-room Showboat casino property in Atlantic City, which has taken on a new theme as a Mardi-Gras attraction. Touted as the largest of the Showboat properties, it occupies 12 acres of Atlantic City’s Boardwalk along the eastern end.
Its casino gaming floor measures 97,000 square feet, featuring more than 3,600 slot machines. The hotel has a nine-storey parking garage accommodating 2,000 cars, shuttle buses, and valet parking services. In 1996, the Atlantic City operations accounted for more than $370 million of Showboat’s entire net revenue of $433 million.
Apparently, encouraged by the robust results of the Atlantic City Showboat operation, Caesars constructed in 2003 the $90 million Orleans Tower, which housed 544 rooms as additions to the Atlantic City Showboat Casino. In 2005, Showboat forged a partnership with House of Blues Entertainment, which added the Caesars casino to its roster of venues for live music entertainment and restaurants. The House of Blues founded by Dan Aykroyd of the 1980 Blues Brothers movie, and Isaac Tigret of Hard Rock Café, will also close with the closing of the Atlantic City Showboat.
In 2007, the casino company renovated its Bourbon Tower. The company did not foresee that its business operations would be affected by the weakening economic conditions not only in New Jersey but also on a nationwide level. As a result, the Atlantic City Showboat failed to achieve the expected revenue from the expansion project.
The rest is history, as the Atlantic City Showboat casino is set to close on August 31, 2014 but will honor all reservations for room and event accommodations.
