Gambling Establishments Shut Down in Atlantic City

July 15, 2014

Atlantic City has seen a spate of a lot of gambling establishments shutting down or filing for bankruptcy in the past few weeks. Showboat and Revel are two such establishments which have faced this predicament. The news regarding both the establishments was not unexpected, but has nevertheless caused ripples of unease in the city for hard core poker players.

Threat of bankruptcy

Revel has filed for Chapter 11 bankruptcy for the second time since it opened. Chapter 11 bankruptcy is different from Chapter 7 because in the former, you are seeking the court’s intervention to deal with the outstanding debts while you try and organize your finances, allowing you to payoff the debts you can and re-emerge as a financially stable entity. Chapter 7, however, is giving up on the struggle to stay afloat and where you request for company assets to be sold to pay off what debts can possible be dealt with. Those who file for bankruptcy under chapter 11 but are unable to come up with a good financial plan have to in the end file for chapter 7 bankruptcy.

Showboat on the other hand has already announced that it will be closing down completely in August this year. This however may be a savior for Revel because creditors may be more inclined to buy it and prevent it from closing due to bankruptcy along with a ready made resort next to it. While playing at tables all night has seen an increase in the number enthusiasts, they are still far lesser than the number of people who spend time and resorts. So creditors, especially those who have made unsecured advances to Revel, would be interested in picking up both establishments at low prices than run the risk of losing their investment completely or partially, thanks to the bankruptcy court streamlining the debts.

What it would mean for Atlantic City is that its newest casino may be saved, albeit with the sacrifice of another business. Many other states have been approving these arrangements to attract more tourists so that their state coffers too are filled by the earnings from the casinos and tourists.

Impact the threat of bankruptcy has on the future of Atlantic City

Atlantic City has seen a spate of casinos and gambling businesses shutting down due to heavy losses incurred, one of the earlier ones being the Atlantic Club that shut down last winter. Many tourists who visit the city may find the lack of gaming centers a tad boring. However, New Jersey still offers one of the best tax rates for gambling establishments so these will not be obliterated but may reduce in number. The City has been relying on gamblers increasingly in the recent few years to provide a steady source of income so the shutdown of these businesses is alarming, but not unexpected. Other cities have capitalized on this and the fact that the businesses are not very well run and are offering bright new casinos and nearby hotels to stay in rather than forcing clients to go to lowly establishments.

Business owners however will not hesitate to buy Revel because it is too new and has all the necessary amenities. Now add to it the nearby resort that is closing down and creditors may still hope to recover their debts from the owners of Revel. Debtors who have given money without any security will be especially happy to see this development. The City too would encourage this move to beat competition from other states and to appease the regular poker players so they keep coming and splurging in their City. Though the locales of the two establishments are not world-class, the amenities provided be able to more than make up for the not-so-great location.

Too many bankrupt businesses in one city do not reflect too well in the way the town’s government functions. Though offering tax rebates to casinos, they are not able to keep the players coming at a regular place and the City must think of ways to re-attract them. Rooms which are not well maintained, gaudy or flashy settings, nonchalant attitude of the casino or resort staff just add to the woes. With the holiday season coming up, people will most certainly look for a city where they can get all the benefits of gambling while having a convenient place to stay.

Conclusion

So it remains to be seen if real estate dealer will consider Revel a good buy given its recent construction and the nearby resort that will soon be available. This would not only help the creditors but also let the City attract customers to its beachfront locales to indulge in gambling while offering them a good place to stay, a good way to revive the quickly fading gaming allure of the City.