The lack of improvements at both Atlantic City casinos is due to bankruptcy issues that the parent company has recently suffered.
US.- A report released by the Division of Gaming Enforcement from New Jersey showed that the lack of capital improvements at Bally’s Atlantic City and Caesars Atlantic City has harmed the properties’ revenue as they’re below historic levels.
In the last 9 years Caesars and Bally’s have spent a combined US$176 million on improvements at the two properties, significantly less than other properties that belong to Caesars, as Press of Atlantic City reported. Other resorts of the brand, like Harrah’s Resort and Borgata Hotel Casino & Spa spent USS$215 million and US$207 million respectively, each more than what the other two destined to capital improvements, together.
Earlier this month, the Casino Control Commission (CCC) from New Jersey approved Caesar’s restructuring plan that allows the company to lease the operations of its facilities to a new company. The reorganisation establishes that Caesars split the entity into a real estate trust and an operating company, which would give away its operations to a different operator.
Eric Hession, chief financial officer for Caesars Entertainment, said during a recent hearing: “In the first few years, I suspect that there was not any impact. As the years went on, capital was a lot tighter. Bally’s and Caesars likely received less capital during that time.” It is estimated that the facilities won’t receive much money to improve the facilities in 2017: Caesars has budgeted US$2 million, whilst Bally’s reported US$4.4 million, and in 2018 the number will increase to US$5 million for both facilities. “We are in the process of putting our capital plan together for the next couple of years. Suites at Caesars are on that list, and we are looking at a block of 100 rooms at Bally’s for 2018/2019,” the official added.
Moreover, chairman and CEO of the CCC Matthew B. Levinson said that it’s hard to see how the business can grow in the competitive market with a bare minimum of capital investment. “The company has made significant investment in recent years in the Harrah’s Conference Center and other improvements to keep that property attractive and competitive. This is the kind of investment that is needed, and we look forward to tangible evidence of Caesars’ ongoing commitment to the Atlantic City market at all of its properties,” he added.