After Atlantic Club sale, who's next in A.C.?

The Atlantic Club Casino Hotel will close Jan. 13. A bankruptcy court judge approved its sale Monday.
The Atlantic Club Casino Hotel will close Jan. 13. A bankruptcy court judge approved its sale Monday. (WAYNE PARRY / AP)
Posted: December 25, 2013

When the Atlantic Club Casino Hotel closes next month, under a bankruptcy sale approved Monday, it will be the first victim of a slump that has seen Atlantic City's gambling revenue fall to an expected total of less than $3 billion this year from $5.2 billion in 2006.

Will others follow the Atlantic Club out of business, as Atlantic City continues losing gamblers to the spread of casinos throughout the Northeastern United States?

"Everybody speculates that," said Frank Fantini, publisher of Fantini's Gaming Report. "We know that Trump has been trying to sell the Plaza for some time, and that hasn't quite happened. I certainly think it's possible that somebody like the Plaza could close. Resorts could close."

Resorts and Trump Plaza were among five casinos offered Monday as choices in an online poll by   Global Gaming Business about which Atlantic City property could be next to close. The others were Bally's, Revel, and Showboat.

The sale of the Atlantic Club to Tropicana Atlantic City Corp. and Caesars Entertainment Operating Co. for $23.57 million marks a new bottom in the value of an Atlantic City casino.

The previous low was $31.5 million for Resorts Casino Hotel in 2010.

Atlantic Club was valued at $513 million when it was sold to the current owner, Colony Capital L.L.C., in 2005.

Under the plan approved Monday, Atlantic Club will close Jan. 13, putting 1,600 employees out of work.

"It's not lost on me that a lot of people are losing their jobs. It's a sad thing," U.S. Bankruptcy Judge Gloria M. Burns said before approving the sale.

Tropicana agreed to pay $8.57 million for Atlantic Club's customer database, slot machines, and other casino equipment. Caesars is buying the real estate for $15 million.

Caesars said Saturday it did not intend to resume gaming or hotel operations at the property.

Atlantic Club was opened by Steve Wynn as the Golden Nugget in 1980.

Burns overruled objections by an attorney for Sobe Holdings L.L.C., whose $24.49 million bid topped the combined bid of Tropicana and Caesars, but was rejected on concern that Sobe might not be able to close the deal.

Sobe's attorney, David L. Braverman of Braverman Kaskey P.C. in Philadelphia, countered that the debt-laden Caesars was not a qualified bidder.

"They can't close," he said, arguing that Caesars' debt agreements should have precluded the deal.

Caesars has more than $20 billion in debt.

Burns said Sobe should have raised such issues last week during the two-day auction.


hbrubaker@phillynews.com

215-854-4651 @InqBrubaker

comments powered by Disqus
|
|
|
|
|