Showboat, 1987-2014; Paris, 1999-????

Showboat_Atlantic_CityIn the end, the Showboat Atlantic City had a good run of it, lasting almost three decades on the Boardwalk. It succumbed, in part, to wounds inflicted by owner Caesars Entertainment, which cut into its customer base by building Harrah’s Philadelphia and, toward the end, shifting its priority to a New York State casino. A few years of that attitude and, the next thing you know, Showboat security is yelling, “Go home! We’re closed” at taxi drivers.

As 27-year Showboat veteran Arnoldo Leggi said between card tricks, “I opened this place, and now I’m going to close it. I’m not feeling too good about it.” Retiree Art Pote, who lives at Trump Taj Mahal, could afford to be sanguine about the whole matter. “This I call a shakeout. It’s not a disaster. We just cannot support 12 casinos. It could be the beginning of a better day.”

Loveman fluffyTry telling that to a newly unemployed Showboat worker. Caesars did what it could to mitigate the damage, finding new jobs for nearly a quarter of the Showboat workforce. Others had to make do with a thank-you letter from Gary Loveman. If they can afford to hang on until jobs open up elsewhere, Fitch Rating sees a silver lining in this month’s dark clouds. It forecasts no casino closings in 2015. Better still, most of Showboat’s, Revel‘s and Trump Plaza‘s revenue will stay in Atlantic City.

The most immediate benefits will flow to Borgata, Harrah’s Resort and the Golden Nugget, Fitch predicts. But it also sees a trickle-down from which Bally’s, Caesars Palace and Trump Taj all benefit: “Most of the closings are at the ends of the Boardwalk, leaving a cluster of remaining casinos (including Taj Mahal, Caesars and Bally’s) that should see a sizable lift in business from the closures.” Fitch also noted that the state’s 9.25% gaming tax left casinos with more money to spend on promotional allowances.

As for the near term, “It’s going to hurt, but the ones that remain will do better,” Pote told the New York Times. We’ll see if Mr. Pote is so sanguine if the sharks start circling the Taj. Unlike many, he is a fan of the business plan of Revel, slated to close tomorrow: “They had a great idea, but the economy was just terrible.”

Frequent Revel customer Andrew Tannenbaum had his own take on what did in the megaresort: “Compared to other casinos, this was a lot revel_0606nicer. There wasn’t the riff-raff here. But I think they overspent, went overboard and got in over their heads. When the Borgata opened, that should have been the last of the high-end casinos for Atlantic City.” Of course, Borgata was supposed to begin a new era of spending for Atlantic City, inspiring a fresh wave of resorts. All it ended up doing was redistributing market share in the city, mostly to Boyd Gaming‘s benefit. Once Pennsylvania legalized casinos, the handwriting should have been on the wall for any casino product at the shore.

* Following in the footsteps of many other writers, the New York Times (somewhat belatedly) looks into the gun-tourism craze here in Las Learning.jpgVegas. The Times‘ coverage coincides with a tragic shooting-range accident in Arizona. The incident proves, if nothing else, that putting an Uzi in the hands of a nine-year-old is probably a bad idea, one that will give the child nightmares for years.

Compared to restaurant, show and nightclub tabs on the Strip, gun ranges offer a value proposition, which is why this cottage industry has grown like crazy. Adrenaline surges are an unspoken part of the compact between Las Vegas and tourists, and few Sin City experiences pack the jolt that handling exotic firearms does.

* Speaking of value propositions, Caesars just celebrated the 15th anniversary of Paris-Las Vegas, the last Strip casino constructed for less than $1 billion (depending on whether you count SLS Las Vegas or not). Then-Hilton Gaming took a thrifty approach, building Paris contiguously with Bally’s Las Vegas, piggybacking onto the latter’s physical plant. The result was not without its flaws, such as the awkwardly configured showroom, but it did gangbusters business right out of the gate and deserves to remembered as the end of an era in Las Vegas, one in which investors could expect a high return on their money.

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