Wednesday, February 10, 2016

Business

Caesars boss: More Atlantic City casinos should close

"Too much capacity," says Loveman.

Caesars boss: More Atlantic City casinos should close

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Caesars CEO Gary Loveman (inset) says more Atlantic City casinos must close so the rest can survive. (AP Photos)
Caesars CEO Gary Loveman (inset) says more Atlantic City casinos must close so the rest can survive. (AP Photos)

Caesars Entertainment is the biggest casino operator in Atlantic City, and CEO Gary Loveman at yesterday's quarterly investor conference call warned that some of the surviving gambling halls down there will have to close.

Loveman's company runs the Bally's, Casears, Harrah's Resort and Showboat casinos in Atlantic City, which suffered a 14% drop in net revenue this winter vs. last, which Loveman blames not just on all the snow, but also on the growing competition from betting halls in Pennsylvania and elsewhere in the Northeast (you can read and search a transcript of the call at Financial Times' SeekingAlpha site here). Said Loveman:

"A.C. has been the biggest problem the company has faced in the last several years. The business at A.C., all the businesses in A.C., are in tremendous pressure. When the Revel joined the market, as you all know, it didn’t do anything to grow it, instead it just took a portion of the existing level of activity. 

"There is too much capacity in Atlantic City currently, such that the returns to existing capacity are under great pressure, and we have experienced that as the largest provider.

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"So we’re looking at all of our options to continue to reduce the cost of doing business here, options to reduce capacity. You’ve seen just with the closure of the Atlantic Club, some moving in that direction, and it's possible with the continuing trends and you will see more of that. I think that’s the normal self-correcting, healing, that you would like to see in a market like this."

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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