Caesars focusing capital reinvestment on Harrah’s
Despite dealing with bankruptcy restructuring, Caesars has spent some $200 million in renovations and upgrades to its three Atlantic City properties during the past three years. But the bankruptcy restructuring has taken its toll, forcing Caesars to play favorites among those sites.
Most of the recent updates and upgrades have been to Harrah’s, one of the largest and best-performing New Jersey casinos. According to the Press of AC, since 2008, Caesars has spent more money on capital improvements to Harrah’s ($215 million) than to its eponymous casino and Bally’s combined ($176 million).
With Caesars’ bankruptcy reorganization now approved by the Casino Control Commission, the state is hoping the Harrah’s upgrade spirit will spread to the company’s other two properties.
The Press of AC reports that an attorney general’s filing on the bankruptcy reorganization states:
“The relatively low level of capital expenditures is, in the division’s view, one reason that the net revenues from Caesars AC and Bally’s remain well below historical levels. In the Division opinion, the projected capital expenditures for 2017 and 2018 would not be sufficient to address past deficiencies and provide a much-needed boost to their competitive positions.”
For an idea of what the parent company might have planned for Caesars and Bally’s, one simply needs to look at what Caesars has been doing across town at Harrah’s.
What’s new at Harrah’s Casino NJ?
In its latest round of enhancements, Caesars spent $30 million on the following:
- Several new restaurants;
- An overhaul its pool and nightclub, which has been rebranded as The Pool After Dark;
- Renovations and upgrades to 450 hotel rooms.
The $30 million of improvements are in addition to the $125 million Caesars spent on updating and increasing the size of the Harrah’s Waterfront Conference Center. The company completed the conference center project in late 2015. It doubled the property’s meeting space, giving Harrah’s the city’s largest conference space (in a casino).
Explained Bally’s and Caesars President Kevin Ortzman and Harrah’s Regional President Rick Mazer in a joint statement:
“Building on the highly-successful openings of the Wild Wild West at Bally’s and our $125 million Waterfront Conference Center at Harrah’s Resort, we are excited to complete our master-plan enhancement project just in time for summer, and debut our finely-appointed Bayview rooms and suites, three world-class dining experiences and an upgraded nightlife experience at Harrah’s Resort.
“Atlantic City, with its iconic beach and world-famous Boardwalk, has been a mainstay summer destination for decades, and our resorts – Bally’s, Caesars and Harrah’s – are committed to offering guests first-class, Vegas-style experiences – without the flight.”
The latest updates included adding several new dining options.
- C. Burger Co., which offers a modern take on classic and signature burgers and also features an extensive craft beer menu and creative, one-of-a-kind “adult” milkshakes;
- Coastal Craft Kitchen + Bar, designed to encourage the ultimate social experience with shared plates and a lively, weekend boozy-brunch scene;
- Veracruz, a restaurant inspired by Mexican and Spanish street fare. It includes classic Spanish paellas, tuna tartare nachos, and a wide variety of margaritas, sangrias, and Spanish and Latin American wines; and
- Guy’s Sammich Joint, a first-of-its-kind, quick-service concept created by Food Network personality, restaurateur, and author Guy Fieri.
New pool area
Another integral part of the project was an overhaul of the Harrah’s pool-by-day and club-by-night.
According to a press release from Caesars, the pool area now features:
“… a glass-enclosed heated dome, upgraded cabanas and bungalows, a new elevated stage and DJ area, dance floor, and massive LED walls for celebrity performances.
The venue’s second floor balcony offers first-class cocktail service and gaming paired with energetic cage dancers, all with 180-degree aerial views of electric scene below. Recent A-list celebrity appearances include Paris Hilton, DJ Pauly D, Nick Cannon, Amber Rose, and countless others.”
The Pool After Dark is the fourth bar/lounge/club at Harrah’s and joins the existing:
- #BarWithNoName at Harrah’s Resort, a new lobby bar. It offers a relaxed, casual environment for hotel guests to grab a specialty drink or classic cocktail;
- Eden Lounge at Harrah’s Resort, revealing a laid-back side of Atlantic City nightlife. It features daily live entertainment with no cover charge; and
- X Bar at Harrah’s Resort, located in the middle of all the action on the casino floor.
Caesars also renovated and updated 450 rooms in the Bayview Tower.
Caesars hired the Las Vegas-based design firm Marnell Companies to re-design the 600-square-foot rooms.
According to the press release, “Bayview rooms… now feature rich hues of lavender and blue accent colors, contrasting white and gray tones, and contemporary furniture — including a vanity dressing area.”
“Freshly-appointed, modern bathrooms offer oversized showers, while select rooms also include luxurious baths and signature amenities,” the release noted.
Author’s note: I attended a conference at Harrah’s, stayed in one of the renovated Bayview rooms, attended a function at the pool, and ate several of the restaurants in May. I was impressed all around, specifically with the room and the meeting facility.
Sport Analytics & Data’s FastPick game is about as close to traditional sports betting as one can legally get without falling outside of the parameters of “fantasy sports.”
FastPick made its online debut at Resorts Casino in Atlantic City last week. According to the Associated Press, Resorts plans on adding betting kiosks throughout its NJ casino in time for football season.
The launch of FastPick has been in the works for several months. As Dustin Gouker of Legal Sports Report noted, by launching before New Jersey passes a fantasy sports bill, FastPick will be able to operate uninterrupted during the licensing process.
“Had the platform not launched before [Gov. Chris Christie] signed [the bill] … it would have delayed the launch until after Resorts procured a fantasy sports license,” Gouker wrote. “The launch allows FastPick/Resorts to operate without interruption… [and] take action on the upcoming NFL season.”
What is FastPick?
FastPick is a parlay-style DFS game that diverges from traditional daily fantasy sports contests in two key ways:
- Users do not assemble a team of players but rather choose players in a slate of head-to-head matchups.
- FastPick is played against the house, not against other DFS players.
Here’s how it works.
FastPick players choose anywhere from three to 10 head-to-head matchups. Like parlay betting in traditional sports books, the more matchups a player selects, the higher the payout for a winning ticket.
Once the parameters of the wager are made, the next step is to choose one of two pre-selected players from each matchup. The player not chosen by the customer is assigned to the casino. If a customer’s player earns more points than the casino’s player, the customer wins that matchup. If a customer beats the casino in all of their selected matchups, they will win money.
The maximum payout is $100,000, which can be won on a $200 bet with a 10-player parlay.
A precursor to legal sports betting?
With sports betting limited to Nevada, and multiple states challenging the federal prohibition, products like FastPick are inevitable.
Daily fantasy sports first sprang into being to take advantage of a fantasy sports carveout in the Unlawful Internet Gambling Enforcement Act of 2006. Now that states are legalizing daily fantasy sports, DFS companies are growing more emboldened. And now land-based casinos are looking to explore opportunities in the space.
New DFS products are further pushing the envelope and trying to blur the line between DFS and sports betting.
It’s unclear how players will receive games like FastPick. But the bigger question is whether these products can thrive in a casino environment if sports betting is legalized, which is looking more and more possible by the day.
Once the surrender is completed, he’d consider selling the Taj Mahal (if the market improves) with a deed restriction in place that would prevent the new owners from reopening it as a casino, unless they paid Icahn’s company a yet-unspecified fee.
“We are not looking to sell it, not at today’s prices,” Icahn told the AP. “I made my fortune buying things cheap.”
By going this route, Icahn could sell the property to a non-casino investor, or sell it and receive a (likely bloated) fee to cancel the deed restriction.
Or you could choose Door #2…
Of course, Icahn could reopen the property himself, if New Jersey Governor Chris Christie decides to veto a bill passed by the legislature designed to prevent Icahn from reopening the Taj with a union contract more favorable to him, or perhaps as a non-union property.
Icahn didn’t rule out the possibility of reopening the Taj himself if Christie vetoes the bill, telling the AP he’s not sure if he’ll reopen the property or not.
That being said, the legislature easily passed the measure, and the anti-union Christie is on his way out the door and no longer has the type of sway over the legislature he once possessed.
“Essentially what we’re trying to do is prevent casino owners from manipulating the licensing system and abusing rank and file casino workers,” said Assemblyman John Burzichelli in a statement, after it was passed by the Senate (29-6) and the Assembly (60-17).
“Given Atlantic City’s struggles, the last thing we want to see is a casino owner taking advantage of bankruptcy laws and pocketing a license or, even worse, stripping workers of benefits and denying them a fair wage because they couldn’t come to the table and strike an agreement,” Burzichelli added.
Icahn didn’t mince words when it came to New Jersey Senate President Steve Sweeney, a union official and the driving force behind the bill that would strip Icahn of the Taj Mahal casino license for five years if he reopened it without first reaching an agreement with the union.
“When a guy like Sweeney goes after someone who saved the Tropicana and 3,000 jobs when no one else would, who would invest in New Jersey?” Icahn, who also owns the Tropicana, said in the AP interview. “The worst thing about New Jersey is they have Sweeney as head of the Senate. The best thing about New Jersey is they didn’t make him governor.”
Icahn’s roller coaster ride with the Taj
The Taj is apparently trying dethrone Revel as the zaniest casino story in Atlantic City history.
Things started out innocuously enough when Icahn rescued the flailing property from bankruptcy, with the promise of investing some $100 million into the dilapidated casino.
The union, Local 54 UNITE-HERE casino workers’ union, wanted pension and health care cuts that were approved by the bankruptcy court reinstated. The problem being — the labor agreement changes were one of the conditions Icahn demanded to purchase the Taj.
Before the doors were even locked, speculation about the next chapter in the life of the Taj Mahal began, with the possibility Icahn reopening it in the spring as a non-union property causing Sweeney and the legislature to spring into action with their bill.
And here we are, at the beginning of 2017 with the future of the Trump Taj Mahal anyone’s guess.
Image credit: Roman Tiraspolsky / Shutterstock.com