Caesars boss: More Atlantic City casinos should close
"Too much capacity," says Loveman.
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.
"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."