When Caesars Entertainment made a discreet donation to the pro-casino campaign in New York State, we should have known that something was up. Sure enough, state Sen. John Bonacic (R) says Caesars is interested in a Sullivan County casino. Then again, Bonacic says Boyd Gaming, MGM Resorts International, Las Vegas Sands and Foxwoods Resort Casino are all in the hunt, too, among others — and there are only four casino licenses to go around. Even high tax rates on slots, perhaps as much as 45%, are no deterrent. (Foxwoods has already identified a site, Grossinger’s.) Unlike any of those companies, Caesars is heavily invested in both Atlantic City and Philadelphia, but logic like that never stopped Gary Loveman before. Also, “the company has plenty of cash from its asset sales and the Las Vegas operations to make strategic investments in the future,” writes The Motley Fool. So it could roll the money from its recent Claridge Hotel and Macao sales into an Empire State play. An existing racino, Tioga Downs, isn’t even waiting for a license to break ground on an expansion, so confident is it.
Some would say that Atlantic City operators (of which Caesars is the biggest) should be preparing for the worst. Analyst Chad Mollman says the resort town should be “very concerned” about its long-term viability. Others are gloomier still. Caesars in particular “lost $761 million in the third quarter, largely because of a massive write-down of Atlantic City assets,” CNBC reports.
Caesars is pure genius compared to Colony Capital, whose reign of error at the Atlantic Club Hotel reached a new nadir, as it filed for bankruptcy. The ACH’s grind-joint marketing strategy wasn’t successful enough to stay ahead of debt service. It’s speculated that whatever a bankruptcy-court sale brings, it will be the lowest-ever casino price paid on the Boardwalk. Well done, Tom Barrack! You overpaid for the ex-Atlantic City Hilton and parlayed it into virtually nothing! (Less than nothing, actually: $15 million in assets vs. $50 million in liabilities.) Colony revealed that it had dangled the property in front of 120 buyers and none of them wanted it. Maybe they’re sorry now that they screwed Rational Group on its attempted purchase … no, probably not. If one counts the three times each of Donald Trump‘s casinos entered Chapter 11, there have been more casino bankruptcies in Atlantic City (15) than there are casinos.
Pinnacle Entertainment took a big Boardwalk write-down last quarter, after selling the old Sands Casino site for $29.5 million — less than half the assessed value of the land. Then-CEO Dan Lee paid $270 million for the land in 2006, when Atlantic City was at its zenith. It’s been a dramatic reversal of fortune … in more senses than one
Isn’t Bader Field still empty? Oh, they’ve got an abandoned stadium! Another general aviation field lost to real estate speculation. I remember when the property was the next big thing in A.C.