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Best of Howard Stutz

Gaming Guru

Howard Stutz
 

Baltimore has high hopes for new Caesars casino

7 June 2014

BALTIMORE -- If General Manager Chad Barnhill needs a case study to follow when the $442 million Horseshoe Casino Baltimore opens this summer, he can look a few states to the west.

In the past two years, Caesars Entertainment Corp., in partnership with Detroit-based Rock Gaming, opened the Horseshoe Casino Cleveland and the Horseshoe Casino Cincinnati.

The companies are bringing that same urban gaming concept to Maryland with a 122,000-square-foot free-standing casino.

Like its counterparts in Ohio, the Horseshoe Baltimore won’t have a hotel and is seen as a tool for revitalizing a postindustrial inner city.

In 2012, Baltimore-based Under Armour, a sports equipment manufacturer, moved its corporate headquarters to a south Baltimore location that was once a Procter &Gamble soap manufacturing plant.

Caesars will follow suit in the building repurposing: The Horseshoe site was once a chemical factory.

“It restores an old area and brings in another attraction that adds to the destination,” said Dominick Murray, secretary of Maryland’s Business and Economic Development Department.

Caesars expects to benefit from the old factory area’s proximity to the city’s sports stadiums and other attractions, such as the Inner Harbor.

For Barnhill, a 20-year Caesars veteran, the operating model is mindful of the company’s Harrah’s New Orleans at the edge of the French Quarter, or the Horseshoe Hammond, about 18 miles from Chicago.

“Much like we did in New Orleans, we have opportunity to capture everything this great city has to offer,” Barnhill said. “We look at the location and the demographics. By offering great hospitality, we believe we are set up to be very successful.”

The Horseshoe Baltimore will include 2,500 video lottery terminals, 100 table games, and a 25-table World Series of Poker-branded poker room. The property will also have a Horseshoe-themed Jack Binion’s Steakhouse and a dining area featuring outlets from popular local restaurants. Specialty restaurants — one from television personality Guy Fieri, the other co-managed by celebrity chefs Johnny Besh and Aaron Sanchez — are planned.

Entertainment venues include a casino center bar and an outdoor plaza area.

And considering the urban location, the property’s 3,500-space parking garage is considered another draw. The Horseshoe is marketing that to season ticket holders of the National Football League’s Baltimore Ravens, who play in nearby MT&T Bank Stadium.

Barnhill said Caesars “is perfectly comfortable” competing in the regional market with Maryland Live!, only 15 miles south in a suburban area. He said the casino will tap into its Total Rewards player loyalty network for customers.

“We’re addressing the urban demand for more entertainment,” Barnhill said.

But success in Baltimore could come at the expense of the company’s Harrah’s Philadelphia, and take a toll on the company’s Atlantic City properties.

Stifel Nicolaus Capital Markets gaming analyst Steven Wieczynski, who is based in Baltimore, said the new Horseshoe could slice into Caesars’ Atlantic City business, which now attracts Maryland customers. The Boardwalk’s gaming revenue has fallen by than 50 percent since 2006 because of competition from neighboring states.

“All you have to do is look at Atlantic City revenues and realize that when new gaming supply is added, it’s not driving new demand,” Wieczynski said. “It just means people are staying closer to their homes. Over time, gaming operators will have to spend more on marketing and promotions in order to retain their best customers.”

Barnhill said the company’s database in the area was large enough that it wouldn’t hurt the business of other Caesars’ casinos.