Tropicana, Caesars to Buy and Shutter Atlantic Club Casino
Yesterday we reported that the bankrupt Atlantic City casino the Atlantic Club Casino Hotel had yet to find a winning bidder at auction.
Today the news is different, with abc.com announcing that Tropicana Entertainment and Caesars Entertainment will be teaming up to purchase – and promptly close down – the ailing land-based property.
ABC says the Atlantic Club will shut its doors on January 13.
Purchase price of $23.4 million
The final sale price of $23.4 million is more than the Atlantic Club was slated to get had PokerStars, the online poker giant which attempted – and failed – to purchase the casino, completed its deal to take over the Atlantic Club for $15 million. That transaction fell apart this past spring, with the Atlantic Club canceling the purchase contract and pocketing $11 million in the process.
As for the new sale, a judge must approve the plan this coming Monday.
Michael Frawley, the Atlantic Club’s Chief Operating Officer was quoted as saying on Friday, “First and foremost I would like to express my profound admiration and respect for the employees of this company. The events of the last few months have evoked an array of emotions, and through it all, the employees of the Atlantic Club have remained consummate professionals.”
“It is because of these outstanding individuals that we were able to build considerable momentum over the last year. Unfortunately our pace was unsustainable in the extremely challenging Atlantic City gaming market,” Frawley continued.
Of the dozen land-based casinos in the New Jersey gaming mecca of Atlantic City, the Atlantic Club, which was originally development back in the early 1980’s by none other than Steve Wynn (before he went out to Nevada and redefined the idea of a casino resort), was among the worst-performing.
In recent years, it had been rebranded as a downmarket locals casino, adopting a rather forlorn motto, “a casino for the rest of us.”
Employees to be let go
As for those employees, all 1,659 of them will soon find themselves without a job.
According to an article in the Las Vegas Review-Journal, the two companies plan to divide the Atlantic Club’s assets, with Caesars Entertainment retaining the property while Tropicana Entertainment will be receiving the table game equipment and slot machines.
Reports are that both companies are interested in reducing competition in the marketplace, with ABC remarking that Caesars may utilize the property as a hotel sans casino.
The Atlantic Club filed for Chapter 11 bankruptcy protection last month. It was the second of the twelve Atlantic City properties to file bankruptcy this year.
In the spring, Atlantic City’s newest casino, Revel, a $2.4 billion project which opened to great fanfare in early 2012, quickly entered and exited from bankruptcy after arranging a debt for equity swap with its creditors.
More recently, Revel officials have not ruled out a sale of the property.
“When we look at how quickly can we make Revel competitive in the marketplace … we would be remiss if we didn’t look for opportunities to potentially partner with folks, to do affiliation marketing programs with other casino companies, (the) potential of a joint venture partnership, (the) potential of a sale of the asset — any number of things that we’re exploring right now,” Revel’s President Scott Kreeger said earlier this month.
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