It’s been rumored for months, but last week’s announcement that the Showboat casino in Atlantic City would close down at the end of the summer still hit hard. Caesars Entertainment, the owner of Showboat, last week sent “WARN” letters to Showboat employees telling them of the shutdown. These letters are a legal federal requirement for any company that contemplates ceasing operations.
The news came just a week after the adjacent Revel casino sent the same kind of letter to its employees, setting August 15 as a possible closing date. But there’s a greater possibility that Revel will remain open since its ownership is actively searching for a buyer. Caesars has been looking for a Showboat buyer for more than two years, but after failing to sell the casino to Penn National Gaming and Churchill Downs, there were few options left for the failing property.
In a statement, Caesars Entertainment Chairman and CEO Gary Loveman said it was a “difficult decision.”
“While we regret the impact that this decision will have on our Showboat associates, we believe this is a necessary step to help stabilize our business in Atlantic City and support the viability of our remaining operations in the vicinity,” he said. “Since 2006, revenue in Atlantic City has declined by more than $3 billion and competition in the city has increased. The dynamic in Atlantic City has led us to the difficult but necessary decision to close Showboat.
“We sincerely appreciate the service, dedication and professionalism shown by the employees of the Showboat over the years to provide our customers with incredible experiences.”
Showboat’s 2,100 employees will lose their jobs on August 31. It follows the closure of the Atlantic Club in January when 1,600 people were let go.
Showboat opened 27 years ago, and was originally owned by a consortium of Las Vegas casino operators. Originally containing a 60-lane bowling alley, Showboat’s attempt to recreate a “locals” Las Vegas-style casino was unsuccessful, and the complex was later remodeled into the casino’s buffet. It was sold to Harrah’s Entertainment (now Caesars) in 1998, and contains a House of Blues operation, including restaurants, a showroom and a themed casino area, which includes poker. Caesars took over operations at the House of Blues in 2010, paying the parent company a franchise fee. The addition of the House of Blues gave Showboat an almost schizophrenic feel since its elderly clientele who enjoyed the Mardi Gras theme were shoulder-to-shoulder with the much younger House of Blues crowd later in the day. In May 2003, Showboat added a 544-room tower, giving it a grand total of 1,331 rooms.
Bob McDevitt, the president of Local 54 of UNITE HERE, called the closure a “criminal act.”
“I’m heartbroken and angry, too angry to respond in an effective way,” he claimed.
Caesars played a role in the closure of the Atlantic Club in January. Along with the Tropicana, the company bought the failing property and closed it, stripping out all the casino equipment. The company claimed it was closing the casino to reduce competition. The rumors about Showboat began soon after that since the same logic could be used about at least one of the properties that Caesars already owned.
Atlantic City Mayor Don Guardian held a press conference in front of the construction site of the new Bass Pro Shop, due to open next year, to highlight that the city is in the midst of a “radical change” due to the years of declining gaming revenues.
“Atlantic City is undergoing a massive economic transition,” Guardian said. “We know it is painful for those who are losing their casino jobs. Atlantic City is creating new jobs, building new attractions and diversifying our economy beyond gaming. We have cranes in the air building more retail and more convention space. We have new, non-gaming investments in Atlantic City from private industry and we are seeing results.”
Loveman pointed out that Caesars is quickly developing non-gaming attractions at its remaining properties.
“Caesars is developing a new, state-of-the-art meetings facility adjacent to Harrah’s Atlantic City, and is pursuing other opportunities to stimulate new visitation and growth, including recently overhauling the gaming floor at Bally’s and investing in new dining options throughout the company’s Atlantic City footprint,” Loveman said.
