Just weeks after announcing its bid for one of the four casino licenses in New York, Caesars Entertainment Corp.'s CEO said on a conference call that the company wouldn't rule out closing some of its New Jersey properties.
(Bloomberg) -- Caesars Entertainment Corp., the largest operator of casinos in Atlantic City, New Jersey, is looking for ways to reduce capacity in the struggling market, including closing properties.
"We are looking at all of our options to reduce the cost of doing business here," Chief Executive Officer Gary Loveman said Wednesday on a conference call after reporting a wider first-quarter loss. "All the businesses in A.C. are under tremendous pressure."
This comes just weeks after the casino operator announced it was placing a $1 million bid for one of four available gaming licenses in New York.
Caesars has been struggling to remain solvent amid a glut of casinos and weak consumer spending, following a 2008 leveraged buyout that left the company with about $23 billion in debt. The company said in March it would close a property in Tunica, Miss. That move may set a precedent for other markets like Atlantic City, Mr. Loveman said.
"These markets can reach points when no new supply is indeed the right answer," Mr. Loveman said. "In some cases reducing supply is the right answer."
The company owns four casinos in Atlantic City—Caesars, Bally's, Harrah's and Showboat. Mr. Loveman didn't say specifically that a casino would close. The company has already taken steps to cut costs, such as reducing restaurant hours, according to a spokesman.
Las Vegas-based Caesars, the largest owner of casinos in the U.S., rose 14% to $21.18 at the close in New York after unveiling plans Tuesday to refinance debt. The shares have lost 1.7% this year.
The Atlantic Club, formerly the Atlantic City Hilton, closed in January, a trend Mr. Loveman expects to continue.
"That's the normal, self-correcting healing that you'd like to see in a market like this," Mr. Loveman said.