April 08--Caesars Entertainment Corp. last year slashed the value of three Atlantic City casinos by 89 percent, recording $2.2 billion in impairment charges, according to documents released Monday by the New Jersey Division of Gaming Enforcement.
Over the last two years, the Las Vegas company cut the value of Showboat, the smallest of its Atlantic City operations, by 94 percent. Caesars Entertainment's other New Jersey casinos are Bally's AC, Caesars, and Harrah's.
Saverio R. Scheri III, president and chief executive of WhiteSand Gaming L.L.C., a consulting firm with offices in Atlantic City, Las Vegas, and overseas, said the write-downs were not surprising amid Caesars' recent financial maneuvers designed to salvage the company that has struggled under more than $20 billion in debt.
"You can smell the desperation," Scheri said.
Caesars announced in late March that it will close a casino in Tunica, Miss., this summer. The company also recently announced a plan to sell four casinos in Las Vegas and New Orleans in a bid to shield them from current creditors in a bankruptcy.
Caesars Entertainment's four Atlantic City casinos recorded $1.18 billion in revenue in 2013, down 10 percent from $1.31 billion in 2012. Operating profits were $239.21 million in 2013, down 25 percent from $318.2 million.
The company could not be reached for comment.
The overall financial results for the 12 casinos that operated in Atlantic City last year were ugly.
Five of them had operating losses for the year.
Borgata and Tropicana were the only operators to post gains in operating profits. They were also among the three casinos that were open for all of 2012 and 2013 and posted gains in net revenue from one year to the next.
The third, Atlantic Club, deserves an asterisk.
Atlantic Club recorded $112 million in revenue, up 8 percent, but was closed in January after being sold to Caesars and Tropicana in a bankruptcy auction for $23.57 million.
Total operating profits for the industry fell for the seventh straight year -- even excluding Revel, which had an operating loss of $130.24 million on net revenue of $189.71 million.
From 2000 through 2007, Atlantic City's casino industry had aggregate operating profits of more than $1 billion each year.
Last year, that figure was $235.27 million.
Beyond the casino floor, results weren't much better. Revenue from hotel rooms totaled $517.67 million, down slightly from $519.41 million in 2012.
Food and beverage sales fell 5.3 percent to $521.64 million from $550.5 million. Revenue from shows, spas, and casino-owned retailers fell 1.6 percent to $190.11 million from $193.12 million.