Atlantic City may soon get a new non-casino hotel in what was a former casino hotel.
Developer Bart Blatstein says his company is on pace the re-open 852 rooms at the Showboat casino Hotel, which closed in 2014, by July 8. Blatstein is not reopening the casino at the property.
An official announcement on the re-opening – including consumer information on reservations – will be made after the July 4 holiday.
“My team has done a wonderful job,” Blatstein told the Press of Atlantic City. “The place looks great.” It was important to me to get the hotel open.”
The 852 hotel rooms would make the property the largest non-casino hotel in New Jersey, but still only represent about two-thirds of Showboat’s total room supply. The property’s casino will not reopen in July.
Showboat recently hired 200 new employees at a local job fair for the opening.
Meanwhile, Glen Straub, owner of the neighboring former Revel casino made no new announcements about an opening date for that property. Straub had hoped to re-open some of the property last month, but has been bogged down by applications for building and casino permits.
Straub intends to re-open a casino at the property – though later in the summer – but has gotten into a licensing dispute with the state Division of Gaming Enforcement. Straub says he wants to lease out the casino portion of the property to an unnamed casino operator and feels he doesn’t need a casino license since he won’t be running the casino. The DGE disagrees, but did acknowledge that Straub may not need a full operator’s license, but ruled he does need to be licensed in some form.
However, analysts last week reported that the re-opening of a casino at Revel could hurt the city’s slowly stabilizing casino market.
The city already faces the threat of New Jersey voters approving the construction of two new casinos in the northern part of the state. A ballot question on the plan will be voted on in November.
Adding another Atlantic City casino into the mix would just increase the dilution of the state’s casino market, analysts say.
“The market has been right sized,” Colin Mansfield, associate director of the U.S. Corporate Finance group at Fitch Ratings told the Press of Atlantic City. “But any more competition in the city would take shares from the existing properties.”
Since four resort casinos closed in 2014 – including Revel and Showboat – casino revenue for the eight remaining casinos has been rising, and most have seen an increase in profits, even though total revenue for the city declined with fewer casinos.
Most analysts feel the downsizing was appropriate for a market facing steep competition from out-of-state casinos. A re-opened Revel would reverse that trend.
“When you have contracting demand and increased supply, that is not a good thing,” Andrew Zarnett, a managing director at Deutsche Bank Securities, where he also serves as the company’s gaming, lodging and leisure high-yield debt analyst told the Press. “Over the last 10 years, gaming revenues have dropped by 50 percent, but that number is close to 60 percent with inflation.”
The city, however, would benefit from increased hotel room capacity, officials said, but absorbing new casino space won’t help.
“There seems to be enough gaming,” said Steve Callender, general manager of Tropicana Atlantic City. “If you look at the gaming numbers, everyone seems to be doing well now. We are right sized from a casino standpoint.”
