Judge Approves Sale, Closure of Atlantic Club Casino
The fate of the long-struggling Atlantic Club Casino Hotel in Atlantic City has been determined.
A federal judge in New Jersey yesterday approved the sale of the property, a seaside fixture dating back to the early 1980′s, to Tropicana Entertainment and Caesars Entertainment, reported the Press of Atlantic City.
Tropicana and Caesars will shutter the Atlantic Club, a property originally developed by Steve Wynn, on January 13, leaving the casino’s 1,600 employees out of work.
Another bidding company tried to thwart sale
At Monday’s hearing that saw dozens of Atlantic Club employees in attendance, another company that had placed what turned out to be a higher bid than that placed by Tropicana and Caesars attempted to stop the sale of the Atlantic Club.
A lawyer arguing on behalf of Sobe Holdings told the judge that it also would have shut down the casino, however it planned to keep the Atlantic Club operating as a non-casino hotel. According to the Press of Atlantic City, the Atlantic Club has about 800 hotel rooms.
Sobe Holdings bid $24 million in last week’s auction; the partnership between Caesars Entertainment and Tropicana Entertainment submitted a winning bid of $23.4 million.
Caesars’ fiscal woes cited, also union objections
Sobe Holdings’ lawyer, David Braverman, asked the judge to allow rebidding on the property, pointing to Caesars’ well-documented financial woes as a reason to deem the company an unqualified buyer. The judge did not grant this request.
Another issue addressed yesterday had to do with the objections to the sale by the Atlantic Club’s employee unions, mostly notably the union representing about 50 percent of the casino resort’s staff, UNITE HERE Local 54.
It was noted at the hearing that a deal has been struck with the union, which will result in a $1,500 severance for each employee currently working at the Atlantic Club.
Latest in a long string of problems for struggling gambling center
The confirmation that the Atlantic Club, once one of the best-performing casinos in the city and now among the worst of the dozen land-based properties in the seaside resort town, would close in less than a month is only the latest bad news for the long-flagging New Jersey gambling economy.
For years Atlantic City has hemorrhaged tourists as gamblers have instead chosen to patronize newer casinos in nearby states.
Pennsylvania has been the chief competition for Atlantic City, with such properties as Philadelphia’s SugarHouse Casino, which opened in 2010, proving a big draw due to newer, more modern facilities and amenities.
In an effort to turn around revenues that have been on a steady annual decline since peaking back in 2006, earlier this year New Jersey became the third state to pass online gambling legislation. It was also the third state to see the launch of its real money gambling web sites.
Six sites went live in a “soft play” mode on November 21, with the full-scale opening taking place five days later on November 26. A month into the nascent New Jersey Internet betting market, by most accounts early problems with geolocation and depositing are continuing to improve.
Some problems stemming from bank processing are expected to be rectified only with time as more financial institutions adjust policies to allow for the handling of iGaming-related transactions.
Whether New Jersey’s brand-new online betting market has the potential to have the positive impact that some analysts, New Jersey Governor Chris Christie, and others have predicted remains to be seen. One thing is for certain, though, and that is that it is too late to save the Atlantic Club.
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