Shifting Sands in Atlantic City
Ownership of the Sands Casino in Atlantic City will shift to billionaire financier Carl Ichan. In a ruling last week U.S. Bankruptcy Court Judge Judith Wizmur ruled in favor of Ichan's plan to invest $65 million in the Sands Casino which has been in Chapter 11 reorganization since January of 1998.
Ichan had been dueling with Park Place Entertainment for control of the Sands. In her written opinion on Friday July 28th, Wizmur stated Ichan's plan for reorganization give creditors a better recovery and gives the Sands a better capital structure. Ichan said he would keep the existing Sands management and plans on spending $55 million to add a 200 room tower, 20,000 sq. ft of casino space and a 1,500 car parking garage.
Some say Carl Ichan is a corporate raider who preys on troubled companies. Others consider him a financial wizard. Whatever the opinion, he is no stranger to the gaming world. He owns three casinos in Las Vegas. When the Stratosphere opened in 1996 it lost $11 million in the first quarter of operation. It had been floundering until Ichan stepped in to take the helm in 1998. After the acquisition of the Stratosphere, Ichan purchased Arizona Charlie's, a local's casino in the western part of Las Vegas. In June of this year he expanded by opening Arizona Charlie's East on the Boulder Highway in Las Vegas.
The Stratosphere is known for its aggressive promotions to bring business to the casino. It advertises video poker machines with over 100 percent paybacks, some 99% certified slots and favorable rules for table game players. Recently the Stratosphere aimed its sights on the bigger players by increasing the size of the maximum bets for table games players. In the tradition of the late Benny Binion, founder of the Horseshoe Casino, the size of a player's first bet will be the size of their maximum bet. On the other end of the spectrum, the Stratosphere also advertises two-dollar blackjack games 24 hours a day.
It will be interesting to see how Ichan's philosophy will affects the Sands in Atlantic City. He said his first priority is to give the gamblers looser slot machines and better table games odds than those offered by other casinos. "I think we can afford to be quite competitive. We are doing that in Vegas" he said. Obviously we're trying to fight for the players to give them as good of break as we can."
Ichan won't take control of the Sands for 30 - 45 days. He is also trying to acquire the neighboring Claridge Hotel and Casino. He presently owns forty percent of the casino's bonds. Though most bondholders oppose the plan, the Claridge will ask Judge Wizmur to approve the plan at a September 6th hearing.
If Ichan accomplishes his plans for the Sands, his presence should be a welcome addition to the East Coast Gaming market and a breath of fresh air for the players.
Only time will tell!
Until next time, remember:
"Luck comes and goes...Knowledge stays forever."