Caesars Entertainment, which operates the Caesars, Bally’s and Harrah’s casinos in Atlantic City, is already expecting to lose customers when the Hard Rock Hotel & Casino opens next year. “We believe the introduction of new competition in some of the regional markets, particularly in Atlantic City, will negatively impact our results in the second half of the year,” Eric Hession, chief financial officer, told investors earlier this month.
In fact, Caesars’ Atlantic City properties have been losing market share for the last few years, a Route 40 analysis shows. The three Caesars’ properties still take the biggest chunk of revenue from Atlantic City’s seven remaining casino hotels, but their market share has been declining even as competition along the Boardwalk has decreased with four casinos closing. Each of the Caesars’ properties has seen a slight increase in revenue since 2015, but when analyzed on a market-share basis, each venue is losing customers (see table and charts below).
Caesars and Bally’s on the Boardwalk.
The former Revel, set to reopen this summer as Ocean Resort Casino, will add to the pressure. “We also anticipate additional competition in Atlantic City as the Hard Rock (formerly the Taj Mahal) is anticipated to open in the summer of 2018 and the Revel casino is anticipated to reopen at some point in the near future. Both openings will add competition and will negatively impact our Atlantic City operations,” Caesars’ executives warned in a separate filing to the Securities and Exchange Commission.
While Caesars’ marina property Harrah’s in particular has benefited from hefty investment in recent years – including a new conference center, paid for with $45 million in public funds – its market share has slipped the most. Through the third quarter of last year (the most recently-available numbers), Harrah’s had just under 16 percent of all money spent inside Atlantic City casinos. In 2015, that figure was almost 18 percent. In 2016, some Harrah’s customers appeared to move to Borgata and Golden Nugget, which saw a slight bump in market share. For the three quarters through 2017, however, the marina district appears to have lost out slightly to Tropicana and Resorts, which have both managed to hold onto customers won over from the shuttered Taj Mahal, Trump Plaza, Showboat and Revel. Caesars and Bally’s have also lost market share in the last two years.
Harrah’s Renovation
Still, Caesars’ executives are planning to spend money this year remodeling Harrah’s in Atlantic City. The hotel renovation will be the company’s biggest spend in Atlantic City since the Waterfront Conference Center was completed in 2015. The exact spending figures have not been released, but the company’s year-end filing reveals plans to invest $675 million to $850 million in its own businesses next year, including some amount for remodeling Harrah’s Atlantic City, Bally’s Las Vegas, Flamingo Las Vegas, and Horseshoe South Indiana. A spokesman for the company did not immediately respond to a request for details on the refit.
Separately, the company has high hopes for the approval of sports betting in Atlantic City. “We think it will benefit our casinos in New Jersey,” CFO Hession told investors on the quarterly call. “We know for example that here in Las Vegas, some of our top days are the Super Bowl and NCAA weekend and some other sporting event days and we think that that will help Atlantic City. People will want to go to Atlantic City on the weekends to watch football and bet in our sports books which will become potentially larger components of the property,” he said.
Caesars Entertainment, which emerged from bankruptcy in October last year, employs about 3,500 Unite Here Local 54 members in Atlantic City under a contract through 2020, according to a financial filing.
| 2017 through Q3 ($ mln) | Q1-3 2017 Market Share (%) | 2016 Full Year ($ mln) | 2016 Market Share (%) | 2015 Full Year ($ mln) | 2015 Market Share (%) | |
|---|---|---|---|---|---|---|
| Bally's | 92 | 9.19 | 303 | 9.20 | 299 | 9.29 |
| Borgata | 320 | 31.97 | 1,071 | 32.52 | 1,037 | 32.20 |
| Caesars | 125 | 12.49 | 414 | 12.57 | 423 | 13.14 |
| Golden Nugget | 88 | 8.79 | 295 | 8.96 | 279 | 8.66 |
| Harrah's | 159 | 15.88 | 554 | 16.82 | 569 | 17.67 |
| Resorts Casino | 72 | 7.19 | 220 | 6.68 | 207 | 6.43 |
| Tropicana | 145 | 14.49 | 436 | 13.24 | 406 | 12.61 |
Data from the New Jersey Division of Gaming Enforcement.
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Maybe try reducing your resort fees….they are more expensive than Las Vegas & you keep raising them.
In the end smart money is BETTING SHOWBOAT OPENS A CASINO OPERATING UNDER THE CEASERS BANNER WHILE THE REST OF THE PROPERTY IS OPERATED BY BLATTSTIEN
Caesars was the cause of the City’s downturn in the economy. They bought Claridge, shut it down with a no casino clause in the deed. Went to Atlantic Club, used Icahn as a partner and shut that down, added a No casino clause. It still sits empty. Icahn got the better deal, got machinery and players lists. Knockout number three got them caught (with their proverbial hand in the cookie jar) shuttering a profitable casino (1.5 million a month net) to sell to a college. 3 casinos, 8000 jobs, all gone due to Caesars Entertainment being greedy and trying to make Atlantic City a company town. Paybacks are on their way. Called a late recession here, really had nothing to do with recession, only greed. And the state turned a blind eye until the debacle between the college and Taj Mahal. Shameful!!
They raped Bally’s by taking all there high rollers closed the buffet, stopped the entertainment like boxing and closed the showroom and moved the shows to Harrahs they got the ideas for the Pool at Harrahs from Bally’s once great Spa and the new convention they got from seeing Bally’s meeting rooms. They even took out the coat check because if you put your coat away your staying and they won’t you to walk to Caesars. I could go on with more things they have done but you get the picture. This company thinks they know better but they do not. It shame because people’s lively hoods hang on them succeeding