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Atlantic City Gaming Industry Shrinks as Casinos Consolidate

30 January 2001

ATLANTIC CITY, New Jersey-- Jan. 30, 2001 -- As reported by the Atlantic City Press Plus: "The local gaming industry is shrinking as it grows.

"...While the number of casinos has remained constant at 12, big companies are buying smaller ones. In the past three years, Showboat and Caesars have become part of Harrah's Entertainment Inc. and Park Place Entertainment Corp., respectively.

"This year, Claridge likely will become part of either Park Place or GB Holdings, parent company of Sands, as the result of a bankruptcy-court duel.

"..For both the buyer and seller of the casinos, consolidation brings undisputed financial benefits. For gamblers, independent casinos and perhaps the city as a whole,

"...Bigger companies also use their volume purchasing power to negotiate lower prices for goods and services. Most of these savings, say executives, occur on a national scale.

"...Companies can cross-market their other casinos here, promoting entertainment, restaurants or other amenities not found at their host property. Bally's, for instance, has a renowned spa but no showroom; it can dispatch customers to Caesars for that.

"Harmony. Fewer companies means that it's more likely the industry as a whole can agree on issues.

"... If cash incentives diminish as companies get bigger, customers are getting a worse deal. This could be most noticeable for bus customers, who account for about one-third of the casinos' visitors. They're used to getting from $10 to $25 in cash per trip, plus food coupons and other deals..."

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