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Article about Atlantic City Caesars and Eldorado Deal

Discussion in 'Casino Industry & Development' started by oghuman, Aug 19, 2019.

  1. oghuman

    oghuman VIP Whale

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  2. Wallew

    Wallew High-Roller

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    Decent article but nothing earth shattering. It’s pretty much what everyone here has been saying. The fact that CET put no money into their properties has hurt them.

    I know everyone says sell Bally’s because it’s the most worn of the properties but I say sell harrahs to mlife( let them have the backside of the island)and dump all of the money into Caesars/ Bally’s and create one Caesars palace east.

    Make it a true destination worthy of the name Caesars palace. No one can argue that it isn’t the best piece of property in AC. It’s center boardwalk, right at the base of the expressway as you come on the island and it’s also the closest property to the outlets and convention center. The combined property would have 6 towers of rooms, 4 separate gaming floors, the second largest poker room in AC, finally has a real sports book, 7 restaurants, 2 buffets, multiple bars, multiple quick eat places, two spas, two pools two beach bars and the 2 best diamond lounges in the entire CET atmosphere.

    If they want to stay relevant in AC it’s put up or shut up time.
     
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  3. user3657

    user3657 VIP Whale

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    Just let AC die already.
     
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  4. Burnsie

    Burnsie High-Roller

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    Don't sell Harrah's—it's the best CET property in AC!

    Lots of logistical problems with merging Bally's into a mega-Caesars. It would be awesome, but I don't see it happening.

    They both already suffer from the clunkiness of absorbing previous hotels/structures into their own architecture so you're constantly going up and down escalators and steps getting between the two hotels and even within each hotel.They don't have a simple walk-through connection like, for example, Eldorado and Silver Legacy in Reno. It would take massive construction work to give it any sense of unity.
     
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  5. Wallew

    Wallew High-Roller

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    Harrahs is the nicest of the CET properties currently but compared to Borgata, Hard Rock and Oceans it’s not really that nice. Also now that the Tropicana is in the CET mix, it is by far the best El-CET casino.

    Would combining Bally’s and Caesars be a large undertaking? Yes but it could be done and I don’t think it would be all that hard. Here would be my game plan( I’ve been in hospital/ medical construction for 20 years so I have a pretty good understanding of complex construction projects)

    1) address the fluidity of the large property. I would build a sky bridge from the balcony at the end of the park place( where the escalators go down into the WWW). The bridge would cross the original sportsbook area and land in the area of the old www buffet. From there blow a hall through the conference room and you would end up right in the upstairs casino at Caesars. It would be an easy 150 yard, one level walk from from the park place balcony to the Caesars casino floor.

    While we are addressing access. How about building a walkway from Caesars through one of their parking garages that would drop you right at the outlets. You could probably get the outlets to chip in on this project. Create a safe climate controlled path from the boardwalk to the outlets and make everyone pass through your casino at the same time.

    2) to coincide with the new walkway between the properties I would convert the now shuttered www buffet to a new bar. The bar would be large in size, have lots of bar top VP and have live music 7 days a week year round. During the off season mid week you could just have local cover bands but it would have live music 7 days a week. It could do things like Jazz night, blues night and a karaoke night. These properties need a bar that offers more than just a place to sit and get a drink.

    3) next we will address room upgrades. The Bally’s towers are the worst so Dennis or Bally’s tower needs to be fully refurbished. One then the next. When the Bally’s tower rooms have been redone move onto the forum tower at Caesars next.

    4)Casino floor remodels. Because you have 4 casino floors just do each one 1/2 at a time. Since you are doing the Bally’s rooms first I would attack the park place casino first also. During this remodel I would put a new bar somewhere on the casino floor. This bar would also have lots of bar top vp.

    5) CET has lots of performers under contract to perform in Vegas. I would start having all of those acts come to AC once a year or so for a week or two stint. Could you imagine if Caesars AC actually had acts/ performers that people would be interested to see.

    I know it’s just a pipe dream and it will never happen but it seems like a pretty simple plan to me.
     
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  6. VegasBJ

    VegasBJ VIP Whale

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    Wallew,

    you're hired!!
     
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  7. jr7110

    jr7110 VIP Whale

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    It seems like a good plan on paper, but the casinos in Atlantic City haven't exactly been cash cows, thanks to all of the competition from the Wind Creek (formerly Sands) in Bethlehem, PA among several others. Atlantic City is not Vegas. The main season for Atlantic City tourism is in the short summer months, and even though you will always find plenty of people there, the East Coast weather and extremely seedy location will always prevent Atlantic City from becoming anything close to what Las Vegas is. Even the plan you propose will probably cost hundreds of millions of dollars and I can't see them sinking that much money into a project when the destination doesn't warrant it. I don't think they would ever recoup that large investment, so they will probably leave things as is. As for the outlets chipping in, I don't think those outlets are doing well enough to make that kind of investment either.
     
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  8. LVRaiders

    LVRaiders Low-Roller

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    The CET properties in AC are forgettable to me
     
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  9. spdandpwr

    spdandpwr VIP Whale

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    I wouldn't be opposed to shuttering it and having folks go to Trop and Harrah's instead...why split your money four ways? That whole coast line should be developed for commercial use (i.e. condos, rental units, whole foods market, and corporate offices). That in tandem with a bigger airport could make AC a destination city.
     
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  10. alexm

    alexm Low-Roller

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    @Wallew is spot on with this. Having literally just returned, the thoughts are fresh in my brain as well. There is no way ED is closing Caesars as they are taking on the Caesars name so that has to stay. Since it is completely connected to Ballys internally, it's hard for me to fathom them selling Ballys off because both proximity and connectivity would make for too much competition, so on the whole that property stays intact. I think you can do a really nice reno in one tower a decent reno in one tower and leave your best tower intact as your lowest tier rooms (Ballys specifically). This gives you much better options as you now have high to low dollar rooms on each property. (Ocean Centurion Forum for Caesars and Garden, Dennis and Ballys for Ballys). Then you have tropicana, Caesars and Ballys as a good community block, there is no competition between them. Change shuttle route from Harrah's to Tropicana and you drive people to your premier property while making improvements at your lower properties. Tropicana is the nicest property in the CET/ED group in AC so that is a big up for them. Ditch Harrah's to Mlife to keep any influx of competition away from your properties.

    As to better access to the outlets, I agree completely and I think the outlets would definitley subsidize. They are constantly busy including on weekdays in the winter. They get a huge draw from the high population of Asian gamblers and tourists who frequent Caesars.

    Of course the other option for El Dorado is to sell off the whole Caesars Bally block, rebrand tropicana as Caesars and then invest big into Harrahs.
     
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  11. alexm

    alexm Low-Roller

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    Unfortunately the area that you are talking about being developed for condos would never generate the revenue because as a whole the city is seedy, so why invest in a condo there instead of in cape may. AC can't be a destination city with the problems 5 blocks off the boardwalk. Even for as nice as it is on the boardwalk.

    4 is too many, but 2 feels like too few. 3 is the right number I think for a property and brand that size.
     
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  12. Gino

    Gino "The King of Inappropriate."

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    The Airport is a major factor holding AC back imo.
     
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  13. sinnerman

    sinnerman High-Roller

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    AC is definitely moving in the right direction, with Hard Rock and Ocean opening there, Borgata doing great. Hopefully with CET / Eldorado pumping a little more capital that way, it will be in good shape. I have always had a good time in AC, not as good as Vegas, but a lot easier to get to (for me).
     
    Last edited: Aug 20, 2019
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  14. Wallew

    Wallew High-Roller

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    Don’t compare AC to Las Vegas. I wish that comparison would just not be used anymore.

    AC can be a close to home destination for the tri state area. It’s a 1 hour drive from Philadelphia( 6th largest city in the US and 2 hours from NYC( largest city in the US). It’s also in a state that has almost 10 million people. That’s one hell local pool of potential customers.

    I also think there needs to be more incentives to bring new businesses to AC. I think the focus needs to emphasize the boardwalk and outlet area, then push out from there.

    It would also be nice if more of the tax money that comes out of the casinos could get reinvested in AC instead of going into Trenton’s pet projects.
     
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  15. EastCoastVegasFan!

    EastCoastVegasFan! VIP Whale

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    I like this idea!
     
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  16. hammie

    hammie VIP Whale

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    A couple things, there are 38 million people within 150 miles of Atlantic City, this market was all about customers driving or arriving by bus. I just don’t see the airport expanding service to a point where it would be meaningful, plus it’s being managed by the Port Authority of NY and NJ and that agency has way bigger fish to fry at this time.

    Don’t forget, Tropicana’s property is owned by GLPI (Gaming and Leisure Properties), a REIT and is leased to Eldorado. Bally’s and Caesars property is owned by VICI, a CET spin-off REIT. Harrah’s property was never spun off to VICI and is owned by CET. So would it make sense for Eldorado to sell Tropicana?

    Since legal gambling started in 1978, the industry has generated over $13 Billion in tax revenue up to 2016. The current debate regarding casino redevelopment funds is to spend $10 million on refurbishing part of Boardwalk Hall for Board of Education offices. The figure works out to be almost 2x the cost per square foot of doing similar work in Manhattan.
     
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  17. jr7110

    jr7110 VIP Whale

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    First of all, it was New Jersey's then Governor Chris Christie who started it all by saying he was going to make Atlantic City the "East Coast Vegas" (which of course never came to fruition):

    https://www.nj.com/news/2010/07/gov_christie_pledges_to_take_o.html

    You can't ask people not to compare the two destinations. There are very valid reasons for comparing the two destinations. When I am a member of a Players Club (MLife for example) and my rate of earning tier credits and express comps is crap in Atlantic City vs Vegas, or when it's cheaper to book airfare and stay in Vegas than book a few nights at The Borgata, you better believe I am going to make the comparison. I live in New York City and have been to Atlantic City many times, but the only property I really like there is The Borgata. In Vegas there are numerous properties I like and would stay and play at - plus I get much more value for my money there.

    While you refer to the massive local pool of potential customers, the fact is that most of them are not coming. Atlantic City earnings are way down. Take a look at this article from May:

    https://whyy.org/articles/atlantic-city-casino-earnings-way-down-amid-more-competition/targetText=The%20casinos%20collectively%20reported%20an,the%20Atlantic%20City%20casino%20industry.

    People are choosing to go to Foxwoods or Mohegan Sun (the exact same travel time from New York to Atlantic City, except in the opposite direction). There is Resorts World in Queens and Empire City in Yonkers (which is, incidentally, now an Mlife property). And Wind Creek in Bethlehem, PA (which is faster to get to from NYC than Atlantic City).

    There is very limited bus service to Atlantic City from NYC. There used to be numerous bus lines that would leave from the Port Authority in NYC and you would get food vouchers and free play etc. They have all gone out of business except one - Greyhound. There used to be a train called Aces that ran from 2009 to 2011 and went out of business as well because people were just not riding it. People in New Jersey and surrounding states have cars because there is no other way of getting around. A lot of New York City residents don't own cars because they are a headache to own and park in the city, and mass transit and Uber is readily available and much more convenient. So while all of the millions of people technically do live in the tri-state area, not all of them gamble and not all of them will end up heading to Atlantic City (or any other gambling destination for that matter).

    The outlets aren't any great bargain - like any outlet, they are hit and miss, and I was never impressed by the selection whenever I have browsed in those stores. The Pier Shops at Caesars (which were rebranded as The Playground four years ago) are even worse, because they were higher end stores like Gucci that all went out of business and left because the money just wasn't coming in. Now there are a handful of stores in there with only Tommy Bahamas and Victoria's Secret as the recognizable name brands.

    I get what you are saying about creating incentives to bring more business in, but they tried that with The Pier Shops and failed. Most of the businesses on The Boardwalk close up shop for the winter and are only open during the summer months.

    I don't see how a huge building project is going to lure more people in when they are barely able to keep things afloat as it is.
     
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  18. Wallew

    Wallew High-Roller

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    We get it. You are not a fan of AC, except Borgata. Everyone is entitled to their opinion. Their are still lots of people that do enjoy AC. Why does it seem that it is usually the Borgata fan club that are always outspoken saying” AC sucks and everything about it is terrible except Borgata”

    This is a thread about CET/El Dorado specifically and what will happen with their current properties. Also what will happen with them moving forward and how can they improve their standing in AC.
     
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  19. jr7110

    jr7110 VIP Whale

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    I never said "AC sucks" - those are your words. In fact, I would go more often if I felt that the value was comparable to what I can get in Vegas, but every time I have gone there I have had a great time.

    If you actually read what I wrote, I was explaining why no one is going to sink money into a place that is struggling - they are not making enough money to warrant any of the projects you proposed to lure people in. How you got "AC sucks" out of that I have no idea.

    As for what the thread is about, I was replying directly to the ideas you posted, so my replies have all been 100% on topic.
     
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  20. Wallew

    Wallew High-Roller

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    Lets keep this civil. That means me too.

    Any other predictions for what the CET/ El Dorado merger will mean for the Atlantic City properties?