By David Madden
ATLANTIC CITY, N.J. (CBS) -— The old Atlantic City Hilton is shutting down next month, as part of a plan to sell the facility through federal bankruptcy court.
The Atlantic Club Casino-Hotel in Atlantic City says it will close on January 13th, reducing the number of casinos in the struggling gambling resort to eleven.
It will be the first Atlantic City casino to close since the Sands shut down in 2006 to make way for a new casino project that never got built.
Two companies with casinos in Atlantic City — Tropicana Entertainment and Caesars Entertainment — will pay a combined $23.4 million for the business.
According to bankruptcy filings made this afternoon, Tropicana will take the slot machines and table games for $8.4 million, while Caesars will get the property and its more than 800 hotel rooms for $15 million.
A judge must approve the buyers at a hearing on Monday.
“First and foremost, I would like to express my profound admiration and respect for the employees of this company,” said Michael Frawley, chief operating officer of the Atlantic Club. “The events of the last few months have evoked an array of emotions, and through it all, the employees of the Atlantic Club have remained consummate professionals. It is because of these outstanding individuals that we were able to build considerable momentum over the last year. Unfortunately our pace was unsustainable in the extremely challenging Atlantic City gaming market.”
He said the casino will operate normally until the January 13th closing date. There were 1,659 employees at the casino-hotel as of November 13th.
A Caesars spokesman could not immediately say what the company’s plans for the property are. It is to meet with New Jersey gambling regulators within three days to determine what approvals will be necessary in order to end gambling on the premises.
The New Jersey state Division of Gaming Enforcement declined to comment until after Monday’s bankruptcy court hearing.
The court filings seem to indicate that Caesars may utilize the hotel portion of the property as a non-casino hotel. It already owns four casinos in Atlantic City — Caesars, Harrah’s, Bally’s, and the Showboat — and hotel rooms for gamblers are at a premium on weekends.
The Atlantic Club thus became the first Atlantic City casino to fall victim to the insidious downward spiral the resort has found itself in since the advent of casinos in neighboring Pennsylvania that began in late 2006.
Atlantic City’s casino revenues reached a high of $5.2 billion that year, and will likely fall below $3 billion this year.
Analysts have long said Atlantic City has more casinos than the now-diminished market can bear.
Another struggling casino, Revel, could be headed for a second bankruptcy filing, or could be sold to new owners soon.
Half of the 12 casinos currently operating in Atlantic City have filed for bankruptcy in the last six years.
The Atlantic Club was formerly known as The Atlantic City Hilton, and before that as the original Golden Nugget in Atlantic City, not to be confused with the former Trump Marina casino that now carries the Golden Nugget name at the opposite end of town.
It struggled to compete against newer, bigger casinos here and in Pennsylvania. For the past two years, it turned its focus to low-rollers and local residents, offering cut-rate prices to attract those unable or unwilling to afford the pricier casinos.