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Gambling News: Atlantic City Hit Hard By Recession, Sands Exec Quits

Written by:
Guest
Published on:
Mar/16/2009
Atlantic City

Gambling news is not good for Atlantic City.  Once considered "recession proof", this latest bust to the national economy has proven that not to be the case.

Atlantic City it seems is just as mismanaged as other facets of our economy.

Aggregate revenue plunged 19.2 percent in February from a year earlier, the sharpest decline in the 30 years since gambling was legalized in the city, according to the New Jersey Casino Control Commission.

Three of the city's casinos, those operated by Trump Entertainment, are in bankruptcy following a court filing by Trump on Feb. 17. Two new resorts planned by Pinnacle and MGM Mirage have been scrapped because financing is unavailable in the tight credit market. On March 6, Pinnacle said it was seeking a buyer for the beachfront land where it had hoped to build a $1.5 billion resort. Revel Entertainment is moving ahead with plans to build a $2 billion resort but the project has been delayed because of difficulty securing financing.

Michael Pollock, managing director of consulting firm Spectrum Gaming Group, said Atlantic City was experiencing an unprecedented downturn but that doesn't mean its fortunes won't improve. Projects like Revel, which combine gambling, entertainment and hotel accommodation, are crucial to Atlantic City's future, Pollock said. That formula has been followed by the city's newest resort, the Borgata, which has fared better than its competitors. Even after the economy recovers, some of Atlantic City's traditional visitors will be lost permanently to other states, Pollock said. But development that attracts people other than gamblers could help restore the city's fortunes. Jeff Vasser, president of the Atlantic City Convention & Visitors Authority, said the city is adding restaurants, spas and entertainment venues to diversify its economic base.

...Sands Director Quits:  Cites COO Dismissal

Las Vegas Sands Corp said on Friday James Purcell resigned from the casino operator's board this week due to a disagreement over the way William Weidner was dismissed from the posts of president, chief operating officer and director. Sands, which is controlled by billionaire Sheldon Adelson, said earlier this week that Weidner, a nearly 14-year veteran of the company, resigned several days after the board informed him his employment would be terminated. Analysts have questioned whether Senior Vice President Robert Goldstein and Bradley Stone, head of global operations and construction, will follow Weidner out the door given that the three were hired together by Adelson in 1995 and had worked together for several years before that. A spokesman for Sands said Stone and Goldstein were not immediately available for comment.

....Crown Casino Hits 7 Week High

Australian billionaire James Packer's casino firm, Crown Ltd (CWN.AX), may turn its attentions back home after a series of failed offshore moves, with rival Tabcorp Holdings Ltd's (TAH.AX) Sydney casino its main target.

Crown shares hit a 7-week high after it exited a purchasing agreement with Cannery Casino Resorts last week as casinos in Nevada struggle amid skyrocketing unemployment and house foreclosures.

Crown could turn its sights to Tabcorp, prizing the Star City casino in Sydney, which is about to undergo a A$475 million ($312.5 million) facelift, analysts said.

That could see Crown team up with lottery operator Tatts Group (TTS.AX), they added.

"Because Crown successfully extracted itself from Cannery, it's now got a balance sheet. People are doing the maths and ruminations on where it could go, and the standard way of splitting it all up is that Crown gets Star City (casino), Tatts takes some of the wagering and perhaps someone else takes some of the Queensland casinos," said CommSec gaming analyst Craig Shepherd.

"The difficulty would be getting across the gulf of multiple (price) expectations. The gap would be very large. I'm sure the buyers wouldn't be looking to pay much and I'm sure Tabcorp would be looking to take a lot," he said.

Analysts say any buyer would have to pay more than Tabcorp's current A$6.33 per share, less than half their worth a year ago.

Shares in both Tatts and Tabcorp plummeted after the Victoria state government unexpectedly decided almost a year ago against renewing slot machine licenses after 2012. Australia is home to around a fifth of the world's slot machines and the gaming business accounts for more than 40 percent of those companies' revenues.

Gambling911.com Staff

 

 

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