Atlantic City Casino Business Looking GrimA pair of newspaper reports over the weekend reveals that the Atlantic City casino market is undergoing extraordinary strains. On Saturday, The New York Times reported that the Showboat, with 1,300 rooms and 2,100 employees, would close on August 31st. This follows the closing of Atlantic Club in January and the announcement last week that Revel, the town's newest casino, was filing for bankruptcy protection for the second time in two years. The main reason for the closings is the oversaturation of the Northeast with casinos, including Foxwoods and Mohegan Sun in Connecticut, and Parx Casino in Pennsylvania. The Associated Press noted that gambling revenues have dropped from $5.2 billion in 2006 to $2.86 last year. The AP also quoted the city's mayor, Don Guardian, as saying that it was all part of a necessary process of change: "'Although it is sad today, it's part of the transition that Atlantic City needs to have,' he said Friday, hours after the Showboat shutdown was announced. 'There is pain as we go through this transition, but it's critical for Atlantic City to realize we are no longer the monopoly of gaming on the East Coast. If you build more and more casinos and don't increase the amount of people coming to them, you're sharing that wealth. We're just going through a very difficult time.'" The AP also quotes Fitch Ratings who suggests that the closings are in fact good news: "'The closure makes financial sense for Caesars and is a positive for the oversupplied Atlantic City market,' the company wrote in a note to investors. 'Showboat has about $50 million in labor costs and pays about $15 million in property tax (although Caesars is appealing Showboat's $625 million assessed value). Caesars will likely recapture most of the Showboat customers at its three other resorts in Atlantic City.'" However, the Times article also includes the following quote from Fitch: "'It's possible we'll see one or two more closings,'" said Alex Bumazhny, a casino analyst at Fitch Ratings...'There's definitely room for consolidation. People recognize that Atlantic City won't disappear, but the declines aren't over yet.'" Links to both stories can be found below. 
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