The Atlantic Club Casino Hotel, which has struggled in recent times, will shut down early in 2014. Founded in 1980 as the Golden Nugget Hotel & Casino, the casino was sold by then owner Steve Wynn and rebranded to the Atlantic City Hilton. The closure of Atlantic Club, which was the sixth casino to open its doors in Atlantic City, means there will be 11 casinos left to operate in Atlantic City.
A deal was finalized on Friday when Judge Gloria M. Burns approved a $23.4 million offer by Tropicana and Caesars Entertainment to buy the Atlantic Club Casino Hotel. The bankrupt casino will close on January 13 after which it will be stripped for parts to use in other casinos.
In a press release, Caesars stated that it “does not intend to resume gaming or hotel operations at the facility, and is evaluating options for the use of the assets, some of which may be used in the company’s other Atlantic City properties.”
According to the bankruptcy court filings, the Tropicana Casino & Resort will spend $8.4 million to acquire Atlantic Club’s customer data and gambling equipment including the slot machines and table games, and Caesars Casino will spend $15 million to acquire the 800-plus-room hotel.
The casino workers union, Local 54, has objected the sale of Atlantic Club, as they are of the opinion that the new buyers should be required to take on the union contract, instead of selling out to its competition. It is easy to see why these concerns were of great concern for the casino’s union. Many of the casino workers have served the company for close to 30 years.
President of Local 54, Bob McDevitt, said he believed the property would be reopened as a non-casino hotel some time in the future, and while the closure of The Atlantic Club was outside of his control, he said “we are going to do everything we can to fight for the workers to get as much as possible in this tragic situation.”
The Atlantic Club Casino was valued at $513 million in 2005, however the casino has really struggled since this appraisal of the company, in what is an extremely dire Atlantic City casino market. This news means The Atlantic Club Hotel has become the first Atlantic City casino to close its doors since 2006 when The Sands was shut down with plans to build a new casino which never opened. Atlantic City gaming revenues peaked at $5 billion in 2006, but it will likely reach only $3 billion this year.
Although the closure of The Atlantic Club is upsetting news for all the casino workers, chairman of the state Casino Control Commission, Matthew Levinson, said “No one likes to see a business close, but we are optimistic that market consolidation will result in a stronger and healthier hotel and casino industry in Atlantic City.” You have to wonder if other struggling AC casinos will follow suit.
Analysts have believed for some time that there were too many casinos trying to capture the shrinking Atlantic City casino market. The market really suffered once brick-and-mortar casinos in Pennsylvania opened only 6 years ago, and for the first time, now has more casinos than Atlantic City.
A deal was actually set up with online poker giant PokerStars, whose intentions were to purchase the casino in its bid to enter the New Jersey online gambling market, but this deal was closed over issues concerning the online poker site’s founder, Isai Scheinberg, who is still under federal indictment following the Black Friday fiasco, a day in April 2011 when the three largest online poker sites in the world were shut down by the US Department of Justice.